BEFORE THE MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

Transcription

1 BEFORE THE MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13 th Floor, Cuffe Parade, Mumbai Case No.1 of 1999 IN THE MATTER OF Revision of tariff application to various categories of consumers of Maharashtra State Electricity Board with effect from Shri P.Subrahmanyam, Chairman Shri Venkat Chary, Member, Shri Jayant Deo, Member. Date of Order: April 28, O R D E R The Commission, after taking into consideration all the objections, responses of the MSEB, issues raised during public hearings, subsequent rejoinders and all other relevant materials, hereby makes the following tariff order. The following is the framework used by the Commission in evolving the tariff policy and declaring the tariff order and tariff schedule. (1) The MSEB should recover its fixed costs through fixed charges and variable costs through variable charges, and, as a matter of principle, all consumers should be subjected to a two-part tariff regime. Currently, most of the consumers do not come under this regime and are unaware that charges payable by them cover a certain portion of each of these costs. Therefore, in categories where this regime is being introduced for the first time, care has been taken to ensure that the fixed part of the tariff is nominal, to create awareness. The Commission expects that this fixed charge would gradually increase to substantially cover the actual fixed costs incurred by the MSEB and the variable charge would change to reflect the variable cost. 1

2 (2) The Commission expects the two-part tariff system to be fully implemented over a period of 3-5 years. (3) Minimum charges have been withdrawn. (4) The Commission intends to create a separate category of single bulb consumers. The creation of this category has been postponed by one year due to absence of requisite data. The Commission hereby directs the MSEB to collect the data to enable the Commission to introduce this category in the next tariff order. (5) The concept of seasonal consumers has been removed. All such consumers will be billed at the rates applicable to the category to which they belong. (6) Cross-subsidy will be eliminated gradually over a period of 5 years for all categories of consumers and tariff for all categories will be progressively increased or decreased, as the case may be, to reflect the average cost of supply. (7) The Commission has initiated rationalisation of tariff categories by merging HT mines with HT industrial, merging SP-I and SP-II, merging power looms with LTP-G and reducing the domestic slabs from five to four. (8) The Commission intends to create a separate category of consumers to be named Public Institutions. This category will cover consumers like Zilla Parishads, Religious places, Govt. and Municipal hospitals. Due to non-availability of sufficient data, the Commission is not in a position to introduce this immediately and will do so during the next tariff process. The Commission directs the MSEB to make available this data by 30 th September (9) The Commission would like the MSEB to provide the data regarding number of Software Technology Parks in the State in due course so that these consumers can be given supply at the average cost of supply plus a small margin. (10) Billing data submitted by the MSEB revealed that more than 50% of metered consumers are being billed on the basis of either average or minimum charge. The MSEB should immediately review the meter reading process and submit to the Commission its report of action taken to improve the metering and billing efficiency. The Commission directs that all consumers will be required to pay tariff on the basis of metered consumption. This requires the MSEB to embark on a meter installation programme so that all consumers would be metered within a period of 3 years. The Commission hereby directs the MSEB to prepare a Master Metering Plan (MMP) within a period of 3 months and submit it to the Commission for its approval. The Commission will issue guidelines for the preparation of MMP in the detailed tariff 2

3 order to follow. In cases where the flat rate tariff is being levied, the MSEB will continue to bill at such rates as the Commission determines till such time the meters are installed. (11) The MSEB is hereby directed to release all new connections on a metered basis only. (12) The Commission has introduced the Time of Day (TOD) tariff for HT industrial (HTP - I & HTP - II) consumers. The Commission intends to use the TOD tariff as a critical tool for Demand Side Management. The Commission expects HT industrial consumers to avail of this facility by shifting consumption from peak period to off peak period. This will not only benefit the industrial consumers but also help the MSEB in flattening the load curve. The Commission also intends to review definition of billing demand, so as to enable the consumer to shift his consumption to non-peak hours. The Commission hereby directs the MSEB to install TOD meters for all HT industrial consumers by September 2000 and, for all other HT consumers except Railways, by December The MSEB must furnish quarterly to the Commission information regarding the population of TOD meters and the data obtained from these meters. The Commission intends to progressively expand the TOD tariff to encompass all categories consuming more than 300 units per month. (13) The Commission has decided to give incentive to all HTP-I and HTP-II consumers availing of TOD tariff and having power factor above 0.95 by providing a rebate of 1% of the energy bill for every 1% improvement in the power factor. (14) The Commission directs that the 10 paise surcharge applicable to consumers situated within the districts of Thane, Raigad and Mumbai Suburban (area served by the MSEB) having contract demand of 1 MVA or more, should be abolished. (15) The Commission is of the opinion that it is essential for the MSEB to improve its receivables management. In order to assist the MSEB to reduce its receivables, the Commission hereby directs the MSEB to publish, every quarter, the names and addresses of the 10 biggest defaulters in each category, in each billing unit, in the local newspaper and file a report enclosing a copy of such news clippings with the Commission. (16) The Commission would also like to make certain recommendations to the MSEB in order to improve the cash collection process. The MSEB may consider rounding off adjustment of the bills to the nearest ten Rupees instead of one Rupee as at present. This will help reduce the collection time at the cash collection centers. The MSEB may also consider putting up more cash collection centers. 3

4 (17) The Commission broadly agrees with the recommendations of the Rajadhyaksha Committee and directs the MSEB to implement the decisions approved by the Govt. in this regard in the next 2-3 years. (18) The Commission has noticed major lacunae in the management information system of the MSEB. The Commission understands that these lacunae are primarily due to the fact that the present MIS is not subjected to such stringent data requirement. But, in future, the MSEB will be required to submit accurate and timely information to the Commission. The Commission suggests that the MSEB should strengthen its MIS and directs the MSEB to ensure that the EDP formats dovetail with regulatory requirements. (19) The MSEB could not satisfy the Commission on the norms used for estimation of consumption by unmetered or flat rate consumers. The Commission hereby directs the MSEB to develop a system to estimate with reasonable accuracy the norms for estimation of consumption, T & D loss and targeting of T & D loss. The MSEB should prepare a proposal and submit it to the Commission before end June 2000 for its approval. (20) The T&D loss computed by the Commission, after incorporating the revised norms for LT agricultural consumption, results in an estimate of 31.87%. The Commission hereby directs the MSEB to take all necessary steps to reduce the T & D loss below 26.89% and has accordingly disallowed all losses in excess of this target. The Commission has assumed that the MSEB will earn atleast the average realization for reduction of every kilowatthour of loss. Achieving the targeted T&D loss of 26.89% will fetch Rs 600 crores of additional revenue for the MSEB. (21) The Commission has disallowed certain expenses of the MSEB. In particular, the Commission has disallowed Rs. 409 crores in respect of generation and power purchase. The Commission is not entirely satisfied by the evidence given by the representatives of the MSEB from time to time on the merit order desptaching and the purchase of power from different sources including the DPC and the NTPC. Therefore, the Commission intends to keep the issue of the merit order despatch and purchase of power from different sources under continuous review throughout the year (22) Further, the MSEB had requested approval for Rs crore as employee expenses but the Commission has disallowed employee expenses to the tune of Rs. 100 crore for the purpose of tariff determination. The MSEB is free to increase the 4

5 salaries of its employees in line with the Fifth Pay Commission report and earn the higher amount through efficiency improvements for which adequate scope exists. (23) The MSEB has claimed a surplus of 4.5% of net fixed assets but has not produced the Gazette Notification as required under Section 59 (1) of the Electricity (Supply) Act, Therefore, the Commission has limited the MSEB s surplus to 3%. (24) Fuel Cost Adjustment [FCA] charge will be made applicable to all categories of consumers. The MSEB will submit to the Commission data related to FCA every quarter starting July The FCA shall not be charged by the MSEB without the prior approval of the Commission. The Commission will then prescribe the methodology for charging the FCA. (25) The Commission directs the MSEB to submit the full and complete information relating to the prudency of the capital expenditure incurred during the last five financial years. (26) The Commission directs the MSEB that henceforth all employees should wear name badges for easy identification of staff dealing with the public. (27) The MSEB should release new connections within a stipulated period. In case of a delay beyond the stipulated period, the consumer should be informed of the reasons for the same and the likely date of new connection. This tariff order shall come into force with immediate effect. The Maharashtra Electricity Regulatory Commission, in exercise of the powers vested in it, under Section 29 of the Electricity Regulatory Commissions Act, 1998 and all other powers enabling it in this behalf, determines the tariff for supply of electricity by the Maharashtra State Electricity Board for retail distribution as under; 5

6 Summary of Expenses Approved by the Commission for (Figures in Rs. Crores) MSEB Proposal MERC Remarks Approval Generation of Power 3,540 3,387 Based on the Commission's targets for generation. Purchase of Power 3,798 3,542 Based on the Commission's approval of power purchase. Repairs & Maintenance Employee costs 1,519 1,419 Additional expenses arising out of implementation of 5th Pay Commission may be recovered through efficiency improvement. Admin & Gen. Expenses Depreciation 1,294 1,293 Token deduction of Rs. 1 Crore for non-submission of information to the Commission to ascertain the prudency of the capital investment during last five years. Interest Charges 1,239 1,127 Interest on investment in DPC has been disallowed. Also token reduction of Rs. 1 crore for non-submission of information to allow the Commission to ascertain the prudency of the capital expenditure investment. Token reduction for working capital on account of poor receivables management. Provision for doubtful debts Other debits Cost of recovery from agricultural consumers has been disallowed. Total Expenses Allowed 12,733 12,071 Note : All expenses have been shown net of capitalization 6

7 Summary of Energy Balance Figures in Million Units Description MSEB Proposal MERC Approval 42,120 Generation 42,705 43,583 14,768 Power Purchase 16,435 15,657 56,888 Total Energy Requirement 59,140 59,240 38,760 Sales 42,782 41,112 Improvement in T & D loss over , % T & D loss as % of available energy 27.66% 26.89% Summary of Revenue Statement for Year Figures in Rs. Crores Existing Tariff Description MSEB Proposal MERC Approval 10,703 Revenue from sale of power 12,721 11, Miscellaneous Revenue Other Income Additional Revenue from T&D loss reduction ,137 Total Revenue (Rs. Crores) 13,155 12,360 12,733 Total Expenses 12,733 12,071-1,596 Surplus Tariff Increase in Rs. Crore 2, Tariff Hike in % 18.85% 4.58% 2.60 Average Realisation (Rs./ unit) Average Cost of Supply (Rs./Unit)

8 Summary of LT Tariff for the year Proposed Category of Consumers Demand Charge (Rs/KVA/month) Rs/HP/month Energy Charge Ps/U Domestic (LD 1) 0-30 Units Rs. 20 per service connection for single phase; Units Rs. 50 per service connection for three phase; Units Additional Fixed charge of Rs. 50 per 10 KW 300 Above 300 units load or part thereof above 10 KW load shall be 460 payable. Non Domestic (LD 2) Units Rs. 50 per service connection for single phase; Units Rs. 100 per service connection for three phase; 460 Above 200 units Additional Fixed Charge of Rs. 100 per 10 KW 600 load or part thereof above 10 KW load shall be payable. General Motive Power (LTP-G) Units Rs. 60 per HP per month; Units Optional MD based tariff will be available at Rs Units 220 /KVA/ month above Units (only balance 360 Units) Powerloom Flat Rate* Public Water Supply Urban P. W Schemes For Connected Load 0-67 HP For Connected Load > 67 HP Rural P. W Schemes Flat Rate Tariff (Rs/HP/month) Grampanchayat 88 0 'C' class Municipal Councils ** Metered Tariff

9 Proposed Category of Consumers Demand Charge (Rs/KVA/month) Rs/HP/month Energy Charge Ps/U Agriculture Flat Rate Tariff (Rs/HP/month) For Load upto 5 HP 75 0 For Load more than 5 HP upto 7.5 HP 92 0 For Load more than 7.5 HP upto 10 HP For Load more than 10 HP ** Metered Tariff Street Light Tariff Grampanchayat & C Class MC "A" & "B" Class Municipal Council Municipal Corporation Areas Poultry Farms Notes: *: Flat rate tariff for power loom category will be applicable during the intervening period till the meters are installed. Thereafter, they will be billed at the rates applicable for LTP-G category. **: Flat rate tariff shall be applicable till the time, meters are installed. FCA shall be applicable to all categories of consumers. The methodology for charging FCA shall be determined by the Commission on a quarterly basis. 9

10 Summary of HT Tariff for the year Proposed Category of Consumers Demand Charge (Rs/KVA/month ) Rs/HP/month Energy Charge Ps/U HTP I (Industrial - BMR/PMR) Base Tariff TOD Tariff 2200 hrs 0600 hrs hrs 0900 hrs hrs 1200 hrs hrs 1800 hrs hrs 2200 hrs 0 60 HTP II (Industrial Others) Base Tariff TOD Tariff 2200 hrs 0600 hrs hrs 0900 hrs hrs 1200 hrs hrs 1800 hrs hrs 2200 hrs 0 60 HTP III (PWW-BMR/PMR) HTP IV (PWW-Others) HTP - V (Railway Traction) HTP VI Residential Complex Commercial Complex HTP VII (Agriculture) Flat Rate Tariff (Rs/HP/month)*** Metered Tariff HTP VIII Poultry Layers & Broilers HTP IX (TEC) SP-I Agri (HT/LT) HighTech, Cold Staorage Mula Pravara Electric Co-op Soc Inter State Sale Note: ***: Flat rate tariff shall be applicable till the time meters are installed. FCA shall be applicable to all categories of consumers. The methodology for charging FCA shall be determined by the Commission on a quarterly basis. (Venkat Chary) (Jayant Deo) (P. Subrahmanyam) Member Member Chairman 10 (Amitabh Rajan) Secretary