TARIFF ORDER True-up of ARR of FY 2012-13, Review of ARR of FY 2013-14 and Determination of Aggregate Revenue Requirement & Retail Tariff for FY 2014-15, Petition no.120/2013 For Electricity Department, Dadra & Nagar Haveli & DNH Power Distribution Corporation Limited JOINT ELECTRICITY REGULATORY COMMISSION For the State of Goa and Union Territories 2nd Floor, HSIIDC Office Complex, Vanijya Nikunj Udyog Vihar, Phase-V, Gurgaon-122 016 (Haryana) Phone: 0124-2342852 Fax: 0124-2342853 Website: www.jercuts.gov.in 5th May 2014 JERC Order on ARR & Tariff Petition for ED- Dadra & Nagar Haveli for FY 2014-15 Contents 1. INTRODUCTION .................................................................................................................................. 14 1.1 JERC Formation.................................................................................................................................. 14 1.2 Electricity Department, UT of Dadra and Nagar Haveli .................................................................... 14 1.3 Notification of Transfer Scheme, Unbundling of ED-DHN and formation of DNHPDCL ............... 14 1.4 Filing of Petition ................................................................................................................................. 17 1.5 Admission of Petition ......................................................................................................................... 17 1.6 Interaction with the petitioner ............................................................................................................. 18 1.7 Critical Issues leading to submission of revised petition by the petitioner......................................... 21 1.8 Public hearing process ........................................................................................................................ 24 1.9 Notice for public hearing .................................................................................................................... 24 1.10 Adherence to Model Code of Conduct ............................................................................................... 26 2. BRIEF SUMMARY OF ARR & TARIFF PETITION ..................................................................... 28 2.1 Introduction ......................................................................................................................................... 28 2.2 Petition Summary for ARR for FY 2014-15, Review of FY 2013-14 and True-up of FY 2012-13 .. 28 2.3 Summary of the Tariff Proposal for FY 2014-15 ............................................................................... 31 2.4 Prayer to the Commission ................................................................................................................... 32 3. APPROACH OF THE ORDER FOR DETERMINATION OF ARR & TARIFF FOR FY 2014- 15 33 3.1 Introduction ......................................................................................................................................... 33 3.2 Approach for True-up of FY 2012-13 and Review of FY 2013-14 .................................................... 33 3.3 Approach for Determination of ARR & Retail Tariff for FY 2014-15 .............................................. 34 4. SUMMARY OF OBJECTIONS RAISED, PETITIONER’s RESPONSE AND COMMISSION’S VIEWS .......................................................................................................................................................... 36 4.1 Public response to the Petition ............................................................................................................ 36 4.2 Public Hearing .................................................................................................................................... 36 4.3 Objections/Suggestions, of stakeholders and response of DNHPDCL and Electricity Department, UT of Dadra & Nagar Haveli there to and Commission’s views on petition no. 120/2013, previous year review and True-up ........................................................................................................................................ 37 4.3.1 Allowing Load up to 4000 KVA on 11 kV feeder .......................................................................... 37 4.3.2 Seller/Purchaser’s Role in clearing of Electricity Dues .................................................................. 38 4.3.3 Increase in the Fixed Charges ......................................................................................................... 38 4.3.4 Supervision charge of 15% should only be on the labor component .............................................. 39 4.3.5 Incentive for supply at 220 kV ........................................................................................................ 40 JOINT ELECTRICITY REGULATORY COMMISSION FOR THE STATE OF GOA and UNION TERRITORIES Page 2 JERC Order on ARR & Tariff Petition for ED- Dadra & Nagar Haveli for FY 2014-15 4.3.6 Depreciation .................................................................................................................................... 41 4.3.7 Return on Equity ............................................................................................................................. 43 4.3.8 Contingent Liability ........................................................................................................................ 44 4.3.9 Bad and Doubtful Debts .................................................................................................................. 46 4.3.10 Non Tariff Income ........................................................................................................................... 48 4.3.11 Interest on Long Term/ Capital Loans ............................................................................................ 49 4.3.12 T&D Losses..................................................................................................................................... 50 4.3.13 Compliance of Directives ................................................................................................................ 51 5. TRUE-UP OF AGGREGATE REVENUE REQUIREMENT FOR FY 2012-13 ........................... 52 5.1 Preamble ............................................................................................................................................. 52 5.2 True-up and Analysis of performance for FY 2012-13 ...................................................................... 52 5.3 Energy Sales........................................................................................................................................ 53 5.4 Surplus Energy Sale/UI sales .............................................................................................................. 55 5.5 Inter-State Transmission losses........................................................................................................... 56 5.6 Intra-State Transmission and Distribution losses ............................................................................... 57 5.7 Energy Requirement ........................................................................................................................... 59 5.8 Power Purchase Quantum & Cost for FY 2012-13 ............................................................................ 60 5.9 Operation and Maintenance Expenses ................................................................................................ 64 5.10 Capitalization, GFA & Depreciation .................................................................................................. 67 5.11 Interest and Finance Charges .............................................................................................................. 69 5.12 Interest on Working Capital ................................................................................................................ 72 5.13 Interest on Security Deposit ................................................................................................................ 75 5.14 Return on Capital Base/Return on Equity ........................................................................................... 75 5.15 Provision for bad and doubtful debts .................................................................................................. 77 5.16 Non-Tariff Income .............................................................................................................................. 78 5.17 Payment of Contingency liability ....................................................................................................... 80 5.18 Revenue from Sale of Surplus Power ................................................................................................. 81 5.19 Revenue at approved retail tariff of FY 2012-13 ................................................................................ 82 5.20 Aggregate Revenue Requirement and Revenue Surplus/Deficit for true-up of FY 2012-13 ............. 83 6. REVIEW OF ARR FOR FY 2013-14 ................................................................................................. 86 6.1 Background ......................................................................................................................................... 86 6.2 Review for FY 2013-14 ...................................................................................................................... 87