Bihar Electricity Regulatory Commission ANNUAL REPORT ( to )

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2 Bihar Electricity Regulatory Commission Ground Floor, Vidyut Bhawan II Jawahar Lal Nehru Marg Patna ANNUAL REPORT ( to ) 2

3 C O N T E N T S Sl. No. Page No. 1. Message Mission Background Profile of Chairman and Members of the Commission Functions of the State Commission Power Profile of the State of Bihar Activities of the Commission. 17 Framing of Regulations Tariff setting for Bihar State Electricity Board Suo-motu Proceeding No. 1/2006 Proceeding in G.C.No. 1/2006 Anustha Devi Vrs. BSEB Review Petition No. 1/2006 Establishment of Consumer Grievance Redressal Forum 8. Miscellaneous Annual Statement of Accounts Officers and Staff of the Commission Training/Participation in Workshop, Meeting of FOR and FOIR 3

4 MESSAGE This is the first report since its inception which the Commission presents focusing an overall view of its activities for the period from August 2005 to March Though this is only the second year of its functioning, instead of many constraints, limited manpower and infrastructure resources, the Commission has undertaken many important tasks. Majority of the regulations under the Electricity Act, 2003 were framed including the Open Access Regulation which make consumer choice a viable option. A Consumer Grievance Redressal machinery was set up on the behest of the Commission in the State. All efforts were made by the Commission to make the power sector competitive, financially viable and consumer friendly. Justice B.N.P. Singh Chairman 1

5 MISSION STATEMENT The Bihar Electricity Regulatory Commission is committed to fulfil the tasks mandated by the Electricity Act 2003 for creating an efficient and economically viable electricity industry in the State balancing the interest of the stakeholders and also safeguarding the consumer s interest to ensure safe and reliable supply of power at reasonable rates. In discharge of its functions due regard is being given to transparency, accountability and equitability and it safeguards the interest of the State and gives a fair deal to consumers. 2

6 3. BACKGROUND The Bihar Electricity Regulatory Commission ( hereinafter referred to as Commission or BERC) has been established by the Government of Bihar under Section 17 of the Electricity Regulatory Commissions Act,1998 vide Government of Bihar Notification no dated 15th April, The Electricity Regulatory Commissions Act, 1998 along with the Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948 was repealed by Section 185 of the Electricity Act, The first proviso of Section 82 (1) has ensured continuity of the Commission along with that of State Electricity Regulatory Commissions by laying down that the State Regulatory Commission established by the State Govt. under Section 17 of Electricity Regulatory Commissions Act, 1998, and functioning as such immediately before the appointed date shall be the State Commission for the purpose of the Electricity Act, The BERC was constituted in May 2005 after Hon ble Chairman Justice B.N.P. Singh took oath of office on 20 th May, 2005 before His Excellency the Governor of Bihar. The other Members namely Shri B.K. Halder and Shri S.K. Jayaswal took oath of Office on 11 th July and 26 th July, 2005 respectively before His Excellency the Governor of Bihar. The Commission became functional from 15 th August, The Commission is presently located at Vidyut Bhawan-II, Jawahar Lal Nehru Marg (Bailey Road), Patna This report on the working of the Bihar Electricity Regulatory Commission has been prepared as per provision under Section 105 of the Electricity Act, The Electricity Act, 2003 has come into force w.e.f consolidating the laws relating to Generation, Transmission, Distribution and Trading and use of Electricity and for taking measures conducive to the development of Electricity Industry, promoting competition therein, protecting interest of consumers and supply of electricity to all, rationalization of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies. Generation has been delicensed to promote power generation and reduce the gap between demand and supply to the least possible. This Act aims to promote investment through private participation and also to provide the consumers with quality power and service at the reasonable and affordable cost. It also protects the private investors by protecting the investment by grant of return on the investment. It is expected that the competition in power sector will bring better technology, improved service and reduced cost making the electricity cheaper for the end-users. 3

7 4. PROFILE OF CHAIRMAN AND MEMBERS OF THE COMMISSION Justice B.N.P. Singh Chairman Justice B.N.P. Singh joined judicial service on 14th June, After completion of the probation period he was promoted to the rank of Subordinate Judge and on being promoted as Additional District & Sessions Judge in Bihar Superior Judicial Service in the year 1989, he was appointed Special Judge, C.B.I., Vigilance; Special Judge, Essential Commodity Act Cases and Special Judge, Harijan Atrocities Cases and was vested with powers for trial of these cases by the Government of Bihar on recommendation of Hon ble High Court, Patna. He conducted an important enquiry under direction of Hon ble Supreme Court of India at Bhagalpur in the matter of a convict who allegedly had not served the sentence awarded to him. He was appointed District & Sessions Judge, Daltonganj, Palamu in the year Thereafter he was appointed by the Hon ble Chief Justice, Patna High Court, as Registrar, Vigilance. Pursuant thereto he was appointed Registrar General of Patna High Court by the Hon ble Chief Justice of Patna High Court. He was elevated to the Bench of Patna High Court in the year 2001 and on superannuation he was appointed Chairman, Bihar Electricity Regulatory Commission by His Excellency the Governor of Bihar in the year

8 Shri B.K. Halder Member Shri B.K. Halder took oath of the office of Member, Bihar Electricity Regulatory Commission before His Excellency the Governor of Bihar on 11th July, He took voluntary retirement from the Indian Administrative Service. Shri Halder did his Master s Degree from Calcutta University. He successfully completed Management course in Market Economy from Sussex University, United Kingdom. He was Research Fellow in Oxford University, United Kinghdom. He has also successfully completed the ECDL course in Computer Application from Oxford University Computer Centre, U.K. Before joining the Commission he held number of important posts in the Government. He was District Magistrate, CHAPRA, KATIHAR and EAST SINGHBHUM (Jamshedpur). He was Managing Director, Adityapur Industrial Area Development Authority, Jamshedpur, which is famous for the units catering to the requirements of the TATA Steel and TATA Motors (TELCO). During his tenure, maximum number of small, medium and tiny units came into production. During this period he had to interact with the officers of Bihar State Electricity Board for smooth supply of electricity in the industrial area. He was Director of Industry, Government of Bihar for more than three years. He became Divisional Commissioner, North Chotanagpur Division (Hazaribagh) in 1994 and subsequently became Divisional Commissioner, South Chotanagpur Division (Ranchi). While he was Secretary, Department of Personnel and Administrative Reforms, Government of Bihar at Patna he opted for Government of India deputation and joined there as Joint Secretary in the Ministry of Home Affairs. His assignment in the Ministry was very sensitive in nature and he successfully discharged his duties. Even after completion of five years, Government of India wanted to give him another assignment related with the Communal Harmony but State Government did not agree to extend his tenure, so he had to come back and joined again in the post of Secretary, Personnel and Administrative Reforms, Government of Bihar. Within a couple of months he was given the assignment of Home Secretary, Government of Bihar. During his tenure in the Administrative Service, barring a few years, he had to conduct regular meetings and co-ordinate with the senior officers of Bihar State 5

9 Electricity Board to sort out various problems related with power theft, law and order problems due to non-availability of electricity, etc. After joining B.E.R.C. he took keen interest to establish its office and to prepare various Regulations, determination of ARR and Retail Tariff for the year and other activities conducted by the Commission. 6

10 Shri S.K. Jayaswal Member Shri S.K. Jayaswal, formerly of the Central Power Engineering Service, took oath of the office of Member, Bihar Electricity Regulatory Commission before His Excellency the Governor of Bihar on 26th July, 2005 after taking voluntary retirement from Central Government Service. Born on 10th January, 1946, Shri Jayaswal obtained degree in Electrical Engineering from the Bihar College of Engineering, Patna University in the year He joined at Badarpur Thermal Power Project as Technical Officer in the erstwhile Central Water and Power Commission (Power Wing) Government of India on 6th February, 1970 and was involved in erection activities of the Project. Later on, he was selected to the Central Power Engineering Service through Union Public Service Commission as Assistant Director and served in different capacities in the Central Electricity Authority. He has vast experience which spans through Design, Engineering, Testing and Commissioning of protection and control systems of HV/EHV elements, Unit and Switchyard Control Boards, 6.6KV and 415 V switchgears for large thermal power projects; feasibility report / project report, engineering and implementation of small/mini/micro hydro power electric projects; financial and commercial appraisal of power projects for according techno-economic clearance, etc; Between , he worked in the Northern Region Electricity Board and handled operation and monitoring of northern regional electricity grid; grid incident analysis and investigation, etc; He was a Member of an Enquiry Committee for circulating water system failure leading to tripping of generating units at Singrauli STPS of NTPC. During , he worked in the Ministry of Power, Government of India as Director and was responsible for all matters relating to operation of power facilities in the country; allocation of power from central generating stations to State/UTs; cross border exchange of power and energy tariff; guidelines for regulation of power and power trading; coal linkages for utility power stations in the country; etc. He finalized the Disaster and Crisis Management Plan for power sector in the country. He was Member representing the Power Sector on the Central Team deputed by the Government of India for assessment of damages due to natural calamities namely, 7

11 Super Cyclone in Orissa in 1999, Earthquake in Gujrat in 2001 and Tsunami in Andaman and Nicobar Islands in He was a Member of seven member Indian delegation deputed by the Government of India to Pakistan in the year 1998 for holding discussion at Government level regarding exchange of power between the two countries. He was also Member of Indian delegation to Nepal in the years 1998 and 2001 for holding discussion regarding Indo-Nepal power exchange. Shri Jayaswal had undertaken study tour to USA in 1991 for 10 weeks for study in optimizing techniques in Load Despatch Stations under United Nation Fellowship Programme. He also undertook study tours to USA and France in 2001 on Plant Maintenance and Online Predictive Maintenance practices in thermal power stations. He also attended course on promoting policy development and energy market reforms in South Asia under United States Energy Association (USEA) / South Asia Regional Initiative for Energy (SARIE) partnership programme, in Nepal in the year

12 5. FUNCTIONS OF THE STATE COMMISSION (1) The State Commission shall discharge the following functions, namely (a) (b) (c) (d) (e) (f) (g) (h) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the that State: Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers; regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State; facilitate intra-state transmission and wheeling of electricity; issue licences to persons seeking to act as transmission licensees, distribution licensees and electricity traders with respect to their operations within the State; promote congenration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licence; adjudicate upon the disputes between the licensees, and generating companies and to refer any dispute for arbitration; levy fee for the purposes of this Act; specify State Grid Code consistent with the Indian Electricity Grid Code specified with regard to grid standards; (i) (j) specify or enforce standards with respect to quality, continuity and reliability of service by licensees; fix the trading margin in the intra-state trading of electricity, if considered, necessary; and (k) discharge such other functions as may be assigned to it under this Act. 9

13 (2) The State Commission shall advise the State Government on all or any of the following matters, namely :-. (i) (ii) (iii) (iv) promotion of competition, efficiency and economy in activities of the electricity industry; promotion of investment in electricity industry; reorganization and restructuring of electricity industry in the State; matters concerning generation, transmission, distribution and trading of electricity or any other matter referred to the State Commission by State Government. (3) The State Commission shall ensure transparency while exercising its powers and discharging its functions. (4) In discharge of its functions the State Commission shall be guided by the National Electricity Policy, National Electricity Plan and National Tariff Policy notified by Central Government under Section 3 of Electricity Act,

14 6. POWER PROFILE OF THE STATE OF BIHAR A Brief Overview of Bihar State Electricity Board (BSEB) The BSEB is an integrated power utility responsible for generation, transmission and distribution of electricity in the state of Bihar and is yet to be restructured as per Electricity Act, BSEB is the State Transmission Utility and a deemed licensee in the state for electricity distribution under the transitional provision as enjoined in section 172 of the Electricity Act, (i) Generation Generation Capacity The Bihar State Electricity Board has a total installed generation capacity of 540 MW (all thermal). The Bihar State Hydro Electric Power Corporation (BSHPC) has an installed capacity of MW. There has been no addition to thermal capacity over the last two decades, only some small Hydro capacity has been added. BSEB has two coal based thermal power plants. The details of plants are as given in Table below: BSEB Installed Generation Capacity S.N Name of Plant Capacity (MW) 1 Barauni TPS Unit MW Unit-2 Unit-3 15MW each Date of commissioning Have been retired Present status Have been retired Unit-4 50 MW Under shut down since 24/04/96 Unit-5 50 MW Under shut down since 15/03/95 Unit MW Running Unit7 110 MW under deteriorated condition 2 Muzaffarpur TPS 220 MW Unit-1 Unit-2 110MW 110 MW Both units are under shut down since October, 2003 Total capacity

15 Though the installed capacity is 540 MW, most of the units are under shut down for a long period and the actual generation has been very meager i.e. in the range of MW. The Muzaffarpur TPS has been taken over by a joint venture company comprising of NTPC & BSEB having holding of 51% and 49% respectively. The joint venture company shall be taking up the R&M of the units and the units are likely to become operational during the year Capacity available from other sources Besides availability of power from own power plants and BSHPC, the BSEB has allocation from central sector generating stations and other sources as given in Table below. Allocation from central sector power stations as on 15/11/2005 S.N Station Capacity (MW) Share of BSEB (%) Share in (MW) NTPC 1 Farakka TPS Khalgaon TPS Talchar TPS NHPC 4 Rangit HPS Chukka HPS (Bhutan) 336 (270 MW)* Tala (Bhutan) 1020 (867) *capacity allocated to eastern region is 270 Tala Hydro Electric Power Project has a capacity of 1020 MW (6X170MW); share of Eastern Region is 85% (867 MW). As per Ministry of Power Notification dated 7 th July 2006, the share of Bihar in Kahalgaon TPS is withdrawn to the extent power is made available to Bihar from Tala Hydro Electric Power Project, similar to other states in Eastern Region. The allocation from central generating stations is subject to minor adjustment from time to time. In addition, the state draws about 100 MU in a year from Nepal at 132 kv, 33 kv and 11 kv under a bilateral agreement. No new generation capacity is under implementation or execution by the BSEB. 12

16 (ii) Transmission Bihar has a transmission network of 220 kv & 132 kv transmission lines as given in Table below: Transmission Network (As on 31/03/2005) Voltage Transmission lines No. of Sub Total Sub Station Number of (Ckt. / km) Stations capacity (MVA) Transformers *440 kv kv kv * charged at 220 kv The existing transmission system is capable to meet a demand of about 1000 MW. Major investments are required for augmentation of transmission system to meet the future load growth. (iii) Distribution Distribution Network Sub transmission and distribution network in the state is given in Table below: Voltage Distribution Network (as on 31/03/2005) Sub transmission / Distribution lines (CKt km ) No. of Sub Stations Transformer capacity (MVA) 33 kv kv * LT lines * Distribution Transformers About 900 MW of power is distributed through 33 kv, 11 kv & LT Systems. Consumer Profile An overall view of the distribution end of the business, in terms of category-wise number of consumers, their connected load, and the sale of electricity during the Financial Year is given in Table below: 13

17 Consumer Profile ( ) Category No. of consumer / connections (as on 01/04/06) (Estimated) 1. Domestic Connected load (kw) (Estimated) Energy consumption (MU) i) Kutir Jyoti ii) Domestic I (Rural) (unmetered) iii) Domestic II ) Non Domestic i) Non Domestic - I (Rural Unmetered) ii) Non Domestic - II iii) Non Domestic III iv) Non Domestic IV v) Non Domestic - V Irrigation & Agriculture Service i) Unmetered supply ii) IAS I iii) IAS II Metered supply i) IAS I ii) IAS II ) Low Tension Industrial Service i) LTIS I - upto 25 HP ii) LTIS II - 25 to 99 HP iii) LTIS III upto 99 HP Street Lighting, Traffic Lighting and Mast i) SS I (Metered supply) ii) SS-II (Unmetered) iii) SS-III (Unmetered) ) High Tension i) 11 kv HTS I ii) 33 kv HTS II iii) 132 kv (EHT) iv)specified service (Induction furnaces) HTSS 7. Railway Traction (RTS) i) RTS I 25 kv ii) RTS II 132 kv Total The number of consumers and connected load given is stated to be estimated as compilation of data has not been done by the BSEB. 14

18 (iv) Transmission & Distribution (T&D) losses The efficiency improvements in the Board are highly dependant on bringing down the distribution losses. The distribution losses comprise technical and commercial losses. Commercial losses being an euphemission for pilferage as well as inefficiencies due to lack of 100% metering, defective meters and inadequate systems and procedures for meter reading, billing and revenue collection. The reported T&D losses in BSEB system for are at 37%. This is not based on measurement of losses in the system. It is only computed. It is the difference between energy input and energy metered and energy assessed for unmetered category of consumers. The actual distribution loss in the system would be much higher. Power Finance Corporation has also assessed the losses as per instruction of Govt. of India and the assessed loss is much higher than the reported T&D loss. In the absence of any energy audit, it is difficult to estimate reasonably the extent of energy losses, if the energy consumed by metered categories are not measured and unmetered categories are not reasonably assessed. It would also be necessary to segregate the Transmission & Distribution losses and Technical & Commercial losses in order to initiate remedial measures. (v) Demand and Supply Position The state has power shortage both in terms of demand and energy. The state has little generation of its own and has to totally depend on the power allocation from central sector generating stations. The power availability is not adequate to meet the present demand and therefore the demand is restricted to the availability of power. Further high T&D losses also contribute for reduction in the availability restricting power supply further. The details of energy demand and energy met for the BSEB system for the years , & are given in Table below: 15

19 Energy balance (MU) Energy sales (Actuals) (Actuals) (estimated) LT Sales Industrial HT sales Railways Inter state sales under UI charges Total sales T&D losses T&D Loss (%) (34.29) (36.113) 2657 (37.00) Energy requirement Energy met by Own generation Purchase from central Stations & Chukka BSHPC Nepal Addl. Drawl from the system Energy Available

20 7. ACTIVITIES OF THE COMMISSION IN BRIEF (A) Framing of Regulations : Under Section 181 of the Indian Electricity Act, 2003, the State Electricity Regulatory Commission is to make regulations consistent with the Act and Rules generally to carry out the provisions of the Electricity Act, BERC made and notified the following Regulations : Sl.No. Name of Regulation Date of (1) Delegation of Financial Powers Regulation, 2005 (2) Conduct of Business Regulation, 2005 (3) Appointment of Consultant Regulation, 2005 (4) State Advisory Committee Regulation, 2005 (5) Fees, Fines and Charges Regulation, 2006 (6) Open Access Regulation, 2006 Notification 17 Brief Description This deals with delegation of financial powers to Chairman, Members and Secretary of the Commission for exercising financial powers in the functioning of the Commission This Regulation deals with the procedures for conducting business of the Commission, duties and functions of the Secretary, the proceedings of the Commission, Arbitration of disputes, investigation, enquiry, collection of information, review of decision, directions and orders etc This Regulation deals with the terms and conditions for appointment of Consultant by the Commission, which inter-alia includes categorization, fees and other charges, criteria for evaluation of proposals for appointing Consultants (Technical and Financial both). This also includes the way in which individual consultant can be engaged This regulation has been notified in terms of Section 87(1) of the Electricity Act, 2003.This deals with the constitution of State Advisory Committee, who will be Members of the Committee, procedure for convening meeting of the Committee, fees and allowances payable to the Committee members etc This Regulation specifies the fees and various charges to be accompanied with different type of applications which are submitted to the Commission, method of payment of fees and charges. This also deals with the deposit of fines/ charges imposed by the Commission to any generating company, licensee or individual Notified in terms of Section 42 and 181 of the Electricity Act, This describes the procedure for availing non

21 (7) Consumer Grievance Redressal Forum and Electricity Ombudsman Regulation, 2006 (8) Procedure for preferring appeal before the Appellate Authority Regulation, 2006 (9) Levy and collection of fees and charges by SLDC Regulation, 2007 (10) Standard of Performance for distribution licensee Regulation, 2007 discriminatory open access for the use of transmission line or distribution system or associated facilities with such lines or system by any consumer or licensee or a person engaged in generation. This also deals with the functions of the agency involved in this work, the charges, surcharge and additional surcharge payable by open access customer (i) In accordance to Section 42(5) (6) (7) of the Act, this Regulation has been framed which deals with the constitution of Consumer Grievance Redressal Forum by the distribution licensee, working of the Forum, kind of grievances that can be taken up by the Forum, procedure for filing of grievance, grievance handling procedure for the Forum. (ii) It also specifies the conditions for appointment of an Electricity Ombudsman, functions of Ombudsman, procedures for filing application against the order of the Forum before the Electricity Ombudsman etc Framed in terms of Section 126 and Section 127 of the Electricity Act, 2003, this specifies the form and the procedure for prefering appeal by any person aggrieved by final order of an assessing officer appointed under Section 126 of the Electricity Act, 2003 before the Appellate Authority appointed by the State Govt. under Section 127 of the Act and also how the distribution licensee has to report to the Commission about the disposal of appeals Framed in terms of Section 31 of the Electricity Act, 2003, this Regulation describes the method under which generating companies, licensees and long term open access customers requiring long term open access and short term customers requiring short term access shall submit an application to the SLDC, quantum of fee payable by the customers for using the system, its billing and collection procedure etc In accordance with Section 181,57,58 and 59 of the Act, this Regulation specifies the guaranteed and overall standard of performance to be maintained by a distribution licensee in their operation relating to consumer services and also compensation payable by the licensee to the affected consumer, in case of default in providing 18

22 these services within specified time. (11) Tariff Regulation, 2007 Feb.2007 Framed in terms of Section 45(2),61,63 of the Electricity Act, 2003, this Regulation deals with the terms and conditions for determination of tariff for generating companies, transmission licensee and distribution licensee. This specifies various formats in which the generating company, transmission licensee and distribution licensee should furnish information along with the tariff petition to the Commission for determination of the tariff. (12) Transmission Licence Regulation, 2007 Framed in terms of Section 181,15,17, and 18 of the Electricity Act, 2003.This deals with the terms and conditions for grant of transmission licence, procedure for making application for transmission licence, issue of transmission licence, format of transmission licence etc. (B) Tariff Setting for Bihar State Electricity Board One of the main functions of the Commission is determination of tariff for (a) Supply of electricity by a generating company to a distribution licence (b) Transmission of electricity (c) Wheeling of electricity and (d) retail sale of electricity by virtue of the provision of Section 62 of the Electricity Act, The Commission appointed M/s Administrative Staff College of India (ASCI), Hyderabad as a Consultant for providing consultancy services for tariff setting and providing assistance on other allied works including drafting of regulations, etc. In that perspective the Commission has issued Tariff Order for retail sale of electricity by the BSEB on 29th November, The details of Tariff petition/tariff Order are dealt herewith. (i) Tariff Filing by Bihar State Electricity Board The Bihar State Electricity Board, a deemed licensee filed a tariff petition before the Commission on 10 th April, 2006 for acceptance of Aggregate Revenue Requirement (ARR) of Rs crores for the financial year and seeking revision of tariff of electricity for supply to the consumers to meet the aforesaid ARR of 19

23 Rs crores. On scrutiny of the petition it was observed that the petition did not contained necessary supporting data in respect of demand forecast, AT & C losses, power purchase, revenue receipt and expenses, revenue arrears, details of depreciation, interest on loan, audited accounts etc. The Commission communicated its observation and deficiencies in the tariff petition to the Board vide Commission s letter no. 175 dated The Board vide its letter no. 452 dated submitted further data and information to the Commission, the contents of which was discussed with the Board s officials on After discussion, the Board furnished further clarifications to the Commission vide their letter no. 507 dated and 513 dated , revising the Aggregate Revenue Requirement which included State Government assistance of Rs crores in the form of grant as resource gap and reducing the interest amount on State Government s loans and also the revenue receipt from Delayed Payment Surcharge. However, the Board did not remove the deficiencies as noted in the tariff proposal as per revised ARR. Accordingly the Board was asked by the Commission vide its letter no. 222 dated to make available required information based on the submission made by the Board vide their letter dated and which was followed by reminders dated and DO letter dated and The Board instead of making available these information filed a revised petition on August 04, 2006 maintaining the original ARR of Rs crores and revising the tariff upwards. The Commission nevertheless took the revised tariff petition filed on by the Board on record on and marked as Case No. TP-1 of (ii) Publication of Tariff Petition In accordance with the provisions of Section 64 (2) and 64 (3) of the Electricity Act 2003, the Commission with a view to ensure transparency in the process of tariff determination directed the Board to publish the revised tariff petition in an abridged form and the same was published in the newspapers on and was also posted on the website of the Commission and BSEB, inviting objections/ suggestions/ comments from stakeholders and general public. In pursuance thereof, seventeen (17) numbers of consumers/ consumer s organizations submitted their objections/ suggestions/ comments before the Commission within the due date i.e. 18 th September,

24 (iii) BSEB s Response on Objections/Suggestions/Comments Bihar State Electricity Board submitted para-wise response on the objections/ suggestions/comments made by different stakeholders and the consumers, before the Commission on (iv) Public Hearing on Tariff Petition A public notice was published by the Commission on 10 th October, 2006 in the daily newspapers namely Times of India (English), Aaj (Hindi) and Dainik Jagaran (Hindi) for holding public hearings on tariff petition of BSEB on 17 th and 18 th October, The objectors, BSEB and Energy Department, Government of Bihar were informed through letters to participate in the public hearing. Public Hearings were held on 17 th and 18 th October, 2006 in Shrikrishna Memorial Hall, Patna. Besides the objectors who submitted the written objections/ suggestions/ comments on the tariff petition, others who wanted to participate in the hearings were also heard. Public hearing on Tariff petition on BSEB for financial year / 18th Oct. 06 at Patna. 21

25 Public hearing on Tariff petition on BSEB for financial year / 18th Oct. 06 at Patna. Public hearing on Tariff petition on BSEB for financial year / 18th Oct. 06 at Patna. 22

26 Public hearing on Tariff petition on BSEB for financial year / 18th Oct. 06 at Patna. 23

27 (v) Tariff Order The Commission took into consideration the facts, presented by the Board in its various filings, the objections received from the consumer s organizations and general public and response of the Bihar State Electricity Board thereon, and after prudence scrutiny determined the Aggregate Revenue Requirement (ARR) of Rs crores as against Rs crores proposed by the Board. The tariff order was passed by the Commission on in presence of representatives of the Board, Consumers and Press. As the tariff was for FY so it was made effective on the meter reading of onward which was to be billed in the month of December, The proposed and approved ARR is as detailed below : Aggregate Revenue Requirement (ARR) Projected by BSEB and Approved by the Commission (Rs. crore) Sl No. Particulars ARR Projected by BSEB ARR Approved by the Commission A Energy Available (MU) B Energy sales (MU) C T&D loss (%) D Gross Expenditure 1. Generation cost Power purchase cost Employee cost Administrative and General expenses Repair and Maintenance cost Interest and finance charges Depreciation E Less: Interest and other expenses capitalized (-)40.00 (-)40.00 F Other Appropriations Provision for Bad debts and other debts Income tax etc. - - G Net Expenditure H Less: Other income (-) (-) I Aggregate Revenue Requirement (G-H) J Average cost of supply (Rs. / unit)

28 In the tariff petition, BSEB claimed a revenue gap of Rs crores on the existing tariff rate. However after taking into consideration the facts and figures on record, the Commission approved a revenue gap of Rs crores only as detailed below: Revenue Gap (Rs. crore) Sl. No. Item Claimed by BSEB Approved by Commission 1. Aggregate Revenue Requirement Less non-tariff income (-) (-) Revenue Requirement form sale of power Revenue at existing tariff Grant from State Govt. as Resource Gap Surplus (deficit) (4-3-5) ( ) (184.78) Out of Rs crores revenue gap, the Commission decided to convert Rs crores into a Regulatory Asset and to recover balance Rs crores revenue gap through tariff revision. The details of tariff prior to 1 st November 2006, tariff proposed by the BSEB for FY and tariff approved by the Commission w.e.f. 1 st November, 2006 are given in the Table below : 25

29 Sl. No. Tariff prior to 1 st Nov and proposed tariff by BSEB for and tariff approved by the Commission Category Tariff prior to 1 st Nov. 06 Tariff Proposed by BSEB Percenta Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh ge increase proposed by BSEB 1 Kutir Jyoti (KJ) Tariff Approved by the Commission Fixed Charge Energy Charge Rs. kw/hp/m Paise/kwh i) Unmetered Rs.30/PM/ conn Rs.107/ PM/ con Rs. 35/m/conn X ii) Metered 50 P Rs.25/PM/ conn Rs.40/PM per con 2 Domestic-Rural DS-I Upto 2 KW % Rs. 25/m/conn - Rural Rs. 35/m/conn - Urban 120 P/U - Rural 150 P/U - Urban upto 1kW-Rs. 75/m X i) Unmetered Rs.62/PM/ conn Rs.214/PM/ con 1kw to 2kw-Rs. 110/m ii) Metered % First 50U -125 P/U First 200 units 285 P P/U Remaining units 500 P X Above 100U- 40 units/month/ con 170P/U 1 st kw 40U/m 2 nd kw 20U/m 3 Domestic Service (DS-II) All metered 4 Domestic Service (DS-III) Single phase Rs.25/M upto 4 kw Above 4 kw 3 Phase Rs.150/M P/U P/U 301 and Above 280 P/U Rs.70 / M for load upto 1 kw and Rs.40/- for each additional kw. All units 250 P Rs.70/M for load upto 1 kw and Rs.40/- for each additional kw Rs.100/m/kW Rs.100/m/kW units-285 P/unit Above 200 units-500 P/U 40 units PM for 1 st kw 30 units PM for each additional kw units-265 P 301 and above 480 P/U 40 units PM for 1 st kw 30 units PM for each additional kw 157.5% 92% Single Phase Rs. 30/conn/m Three Phase Rs. 180/conn/m X Units Units Units 300 Above 300 Units All Units st kw 400 U/flat/m Addl. kw 20U/flat/m 26

30 Sl. No. Category Tariff prior to 1 st Nov. 06 Tariff Proposed by BSEB Percenta Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh ge increase proposed by BSEB 5 Non-Domestic Services (NDS-I) 6 Non-Domestic Service (NDS-II) 7 Non-Domestic Service (NDS-III) 8 Non-Domestic Service (NDS-IV) Unmetered Rs.95/connection/M Rs.125/kW or part/m Rs.150/kW/M Rs.120/kW/ m Unmetered Rs.214/connection/m Metered Rs.200/kW/M units-400 Above 150 units units-400 P/U above 150 units- 440 P/U 50 units/kw units-190 P/U units-250 P/U Above 300 units-290 P/U 50 units /kw upto 4 kw 100/units/kW for above 4 kw. Rs.200/kW/m Same as NDS-II Metered units-300 P/U Above 200 units 500 P/U 30 units /kw PM units-300 P Above 200 units-500 P/U 50 units/kw/pm Same as NDS-II % Tariff Approved by the Commission Fixed Charge Energy Charge Rs. kw/hp/m Paise/kwh (a) Unmetered i) upto 500 watt - Rs. 105/conn/m ii) Above 0.5kw to 1kw Rs. 120/conn/m iii) Above 1kw - 2kw Rs. 150/conn/m No unit charge 19.5% Rs. 140/kw/m upto 4kw Rs. 170/kw/m Above 4kw 19.5% Covered under NDS - II (b) Metered P/U U 160P/U Above 200U 200P/U upto 500W 30U/m Above 0.5kw upto 1kw 50U/m Above 1kw-70U/m No fixed charge 1-100U- 420P/U U 450P/U Above 200U 480P/U 50U/kw or part thereof per month Same as NDS-II Same as NDS-II 19.5% Covered Under NDS - II 27

31 Sl. No. Category Tariff prior to 1 st Nov. 06 Tariff Proposed by BSEB Percenta Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh Fixed Charges Rs./kW/HP/month Energy Charges Paise / kwh ge increase proposed by BSEB 9 Non-Domestic Service (NDS-V) 10 LT Industry Service LTIS-I 11 LT Industry Service LTIS-II LT Industry Service LTIS-III Street Light Service SS-I Metered Rs.40/kW with minimum of Rs.150 / connection/m Rs.60/HP or part/m Rs.80/HP/M units-200 P/U units-250 P/U Above 300 units-300 P/U All units 390 P/U Rs.200/HP/M 70 units/hp/m All units 410 P/U Rs.250 / HP/M 70 units/h/p/m upto 79HP 100 units/hp/m for 80 HP to 99HP All units 280 P/U Rs.250 / HP/M Rs.485 / kw/m Metered All units P/U Tariff Approved by the Commission Fixed Charge Energy Charge Rs. kw/hp/m Paise/kwh Same as NDS-II Same as NDS-II 16% Separate tariff for Temples, Mosques, Churches, Gurudwaras, etc places of worship and crematorium & burial grounds. Same as per rate of Unmetered supply of SS-II, SS-III All units 285 P/U 80 units/hp/m All units 285 P/U 100 units/hp/m units 430 P/U Above 235 units 535 P/U 235 units/hp/m Rs. 45/kw with min. of Rs. 165/conn/m 1-100U-210P/U U 275P/U Above 200U- 330P/U subject to min. monthly charge of 50U/kW or part thereof % Rs. 65/HP/m All Units 415P/U 70 U/HP/m 28.46% Rs. 85/HP/m All Units-430P/U 100U/HP/m 91.30% Rs. 85/HP/m All Units-300P/U 165U/HP/m All units-535 P/U / PM 84.5% X All Units-300P/U Ground Portayal 160U/kw/m Municipality 220U/kw/m Municipality 280U/kw/m Corp. 28

32 Sl. No. Category Tariff prior to 1 st Nov. 06 Tariff Proposed by BSEB %age Fixed Charges Rs. Energy Charges Paise / Unit Fixed Charges Rs. Energy Charges Paise / U increase propose d 14 Street Light Service SS-II Unmetered Light point wattage For villages & town having population upto 10,000 Population between 10,000 & 1,00,000 For remainin g towns/ cities i) Upto 100 W Rs.55 Rs.60 Rs.65 ii) W Rs.140 Rs.155 Rs.170 iii) W Rs.280 Rs.300 Rs.325 Wattage Population upto 1 lakh Population Above 1 lakh i) for 100 W Rs.160/M Rs.170M ii) upto W Rs.400/PM Rs.500/PM % Tariff approved by the Commission G.P. Nagar Municipal Palika / Municp. Corp. Light point wattage i)upto 100w ii) W iii) w Rs.60/m Rs.65/m Rs. 150/m Rs. 165/m Rs. 300/m Rs. 320/m Above 500W pro-rata will be applicable item (iii) Rs.70/m Rs. 185/m Rs. 360/m 15 Street Light Service (Mast) SS-III Unmetered Wattage Above 250 W Populatio n upto 10,000 Rs.280/ bulb/pm Population between 10,000 and 1,00,000 Rs.300/ bulb/pm Remaini ng towns / cities Rs.325 / bulb/pm Population upto 1 lakh Rs.2000 PM per mast. Population above 1 lakh Rs.2500 PM per mast % Above 250W Upto 500W Rs.300/m Rs. 330/m Rs. 355/m pm Rs.1500/m Rs. 1650/m Rs Above 500W pro-rata will be applicable 16 Irrigation and Agriculture Service IAS-I Minimum Rs. 1000/month/mast Unmetered Upto 10 HP Rs.75/HP/M Above 10 HP- Rs.80/HP PM Metered As per Rural schedule All units at 70 P/U Rs.50/HP/M As per Urban Schedule All units 290/unit Rs.90/HP/M Unmetered Supply Rs.723/HP/M Metered Rs.200/HP/M Metered Upto 200 Units/HP PM 375 P Balance units 535 P 140 units/hp/month % Unmetered Fixed Charge Rural feeder- Rs. 100/HP/m Urban Feeder Rs. 120/HP/m No Energy Charge Metered All Units Rural feeder- 80P/U Urban Feeder 130P/U Rural Rs. 75/HP/m Urban Rs. 120/HP/m No fixed charge 29

33 Sl. No. Category Tariff prior to 1 st Nov. Tariff Proposed by BSEB Percenta ge increase proposed 17 Irrigation and Agriculture Service IAS-II 18 High Tension Service HTS-I 19 High Tension Service HTS-II 20 High Tension Service HTS-III 21 High Tension Specified Service HTSS 22 Railway Traction Service (25 kv) RTS-I 23 Railway Traction Service (132 kv) RTS-II Fixed Charges Rs. Unmetered Rs.350/HP/M Metered Rs.100/connectio n/m Rs.125/kVA /M Rs.115/kVA/M Rs.110/kVA/M Rs.700/kVA/M Rs.140/kVA/M Rs.140/kVA/M Energy Charges Paise / Unit Metered All units 100 P/U All units =422 P Energy charges based on LF of 25% and PF of 0.85% on contract demand All units =416 P/U 30%LF All units = 413 P/U 50%LF All units -120 P/U Rs.1012 per kva of contract demand PM All units = 444 P/U 25%LF All units = 438 P/U 25%LF Fixed Charges Rs. Unmetered Rs.1206/HP/ PM Metered Rs.350/HP PM Rs.500 / kva/m. Rs.700/kVA/M Rs.1390 / kva of contract demand PM. Rs.1000/kVA/M Rs.1755/kVA of contract demand/pm. Rs.900/kVA/M Rs.1552/kVA of contract demand/pm. Rs.300/kVA/M Rs.300/kVA/PM 30 Energy Charges Paise /Unit Metered Upto 200 units-375 P Balance units-535 P 225 Units/HP/M All units 275 P/unit Rs.1040/kVA of contract MD/ per month All units -266 P/U All units-230 P/U All units-225 P/U 2.19% 16.29% 19.89% 25.57% All units-400 P/U 260 units/kva/m 1.56% All units-415 P/U 260 units /kva/ PM (-) 1.07% Tariff approved by the Commission Unmetered Fixed Charge Rural feeder- Rs. 420/HP/m Urban Feeder Rs. 450/HP/m No Energy Charge Demand Charge Rs. 180/kVA/m Monthly minimum 85% of contract Demand Rs. 175/kVA/m 85% of Contract Demand Rs. 170/KVA/m 85% of Contract Demand Rs. 750/kVA/m Rs. 1101/kVA/m Rs. 160/kVA/m 85% of Contract Demand Rs. 160/kVA/m 85% of Contract Demand Metered All Units Rural feeder- 150 P/U Urban Feeder 200 P/U 225 Units/HP/m Energy Charge 420 P/U Monthly minimum charge 30% L.F. 90% P.F. 420 P/U 35% L.F. 90% P.F. 415 P/U 50% L.F. 90% P.F. All Units 135 P/U 444 P/U 25% L.F.90% P.F. 438 P/U 25%L.F. 90% P.F.

34 (vi) Directives given to BSEB in Tariff Order It was observed from the tariff petition of the Board that its operational and financial performance requires considerable improvement at all levels in reducing T&D losses and costs, and also increasing efficiency on part of the licensee, and in order to improve the quality of supply of electricity and service to the consumers in the State significant initiatives are required to be taken by the BSEB. In that perspective the Commission issued 33 directives to the BSEB for improving the quality of services to the consumers, and for increasing the efficiency in the BSEB operations. DIRECTIVES Directive-1: Cent Percent Metering Henceforth no electricity connection will be released to any category of consumer without a meter by the Board. Action plan to be submitted by 31 st March 2007 for cent percent metering. Directive-2: Directive-3: Directive-4 Directive-5: Directive-6: Replacement of Non- Functional / Defective meters Setting up of Independent Third Part Testing Arrangement Efficient Meter Reading, Billing and Collection Meter Reading of HT Services Replacement of old Electromagnetic Meters with Static Meters 31 BSEB shall report the number of nonperforming / defective meters categorywise in the system as on along with an action plan to replace them and the report must be submitted by 31 st January 2007 to the Commission BSEB should put in place an accredited independent third party meter testing arrangement in all districts under its licensed area and also prepare norms for allowing consumers to purchase their own meters duly tested and certified by such third party testing agency so that scope for consumer complaints is minimized and complaints that arise are settled expeditiously to the satisfaction of the consumers without the need for any recourse to consumer forum The collection efficiency shall be improved from the present level of 85% to cent percent as early as possible BSEB shall issue suitable instructions in this regard immediately and the Board shall also review the percentage of checked readings and take action in case of variation between normal meter reading read by meter reader and the check meter reading taken by the officers of the Board. A report on the status of metering, type of meters provided in HT and other high value LT installations along with a programme for replacement of such meters with static meters shall be submitted to the Commission by 31 st January 2007.

35 Directive-7: Directive-8: Reduction of Transmission and Distribution (T&D) Losses Energy Audit and Demand Side Management A long term action plan for reduction of T&D losses for both technical and nontechnical with relevant load flow studies be chalked out and submitted to the Commission by March, The Board should ensure reduction of the T&D losses to 38% during FY and 34% during FY BSEB to replace all such meters and provide correct meters on all feeders from 220KV to 11KV level as well as LT side of the distribution transformer on highest priority The energy audit should be taken up first in all the towns with a population of fifty thousand and above. The first status report on the action taken for energy audit in all the towns should be reported to the Commission by 31 st March, 2007 to issue further directives in this regard, if required. Directive-9: Pilferage of Electricity BSEB to activate the organization to curb the pilferage of power within the premises as per provisions of Indian Electricity Act 2003 and also the Indian Penal Code. A task force is to be constituted in different zones to which the entire licensee area is to be divided to carry out massive raid to arrest pilferage. In case of detection of such theft/pilferage, the concerned authority of the area and personnel attached to them, who have duties to supervise the work, have to be made answerable for punitive action. Those found committing mischief of pilferage should be booked and penal action should visit them Directive-10: Directive-11: Enumeration of Agriculture Pump sets and other Service Connections Assessment of Agricultural Consumption A report on the action taken to get agricultural and other connections enumerated to identify the unauthorized connection and to regularize them shall be placed before the Commission by 30 th June, The BSEB shall come out with an action plan for this job by 31 st March 2007 to be placed before the Commission and pursuant thereto the action taken on the plan shall also be made available to the Commission by 31 st July

36 Directive-12: Directive-13: Directive-14: Directive-15: Regulations of Power Supply to Rural Areas Quality of Power Supply and Service to consumer Management Information System Annual Accounts of the BSEB The supply could be regulated, each 11 kv feeder or a group of feeders can have the supply for a specified hours in a day by rotation. The hours during which power supply would be available shall be notified to the consumers under each feeder. The Board may study the practices being followed in other States and drawout a scheme to regulate power supply to rural areas, particularly, to agricultural pumpsets, and submit such a scheme to the Commission for consideration and approval by 31 st March The Board shall submit its scheme to strengthen the transmission & distribution systems to the Commission by 31st March The Board shall also establish service centres in all the towns to attend to consumer complaints on interruptions to power supply, billing etc in order to improve service to consumers in all major towns to start with. The measures taken by the Board in this regard shall be reported to the Commission by 31 st March The Board to take urgent steps to build a credible and accurate database and management information system with unbundled costs and expenditure of the three businesses of the Board viz. Generation, Transmission and Distribution to make information available on operational and financial issues and get such data updated on monthly basis. Advantage of IT must be taken to institute the MIS. Action must be taken urgently on this and the action taken shall be reported to the Commission by 31 st March, Care must be taken to see that the next tariff petition is supported by an accurate and credible database. The Board shall accord highest priority and ensure that the accounts of the FY , and are duly audited by Accountant General, Bihar by March BSEB should file the ARR tariff petition for the next year supported with audited accounts. Directive-16: Arrears The outstandings from the State Government Departments, Government Undertakings, local bodies and private parties shall be furnished by 31 st January,

37 Directive-17: Collection of Arrears The Board should submit the details of recovery of arrears under the first OTS announced in April '06 and also the recovery under the second OTS scheme in force from October '06 onwards in format given. The first report shall be submitted by 31 st January '07 and the second report after the scheme is over in March 07. Directive-18: Asset Register The Board shall maintain separate asset registers for the 3 business viz. Generation, Transmission and Distribution. If such, registers are available, the same may be submitted to the Commission. In case such registers are not available the same may be got prepared by July, Directive-19: Time of Day (ToD) Tariff Such plan shall be submitted to the Commission along with next tariff petition Directive-20: Directive-21: Directive-22: Directive-23: Directive-24: Directive-25: Recovery of Fuel Price Adjustment from Consumers Paying Monthly Minimum Charges Fuel and Power Purchase Price Adjustment Adjustment of Payment of Current Bills against Delayed Payment Surcharge (DPS) Organizing Operational Circles as Cost Centres Performance of BSEB Generating Stations and their Parameters New Generation Projects 34 The BSEB shall submit a factual report in the matter to the Commission by 31st January A formula is approved by the Commission for adjustment of any increase/decrease in fuel prices and power purchase price. Any adjustments in the Fuel/Power purchase costs, the additional cost to be recovered from consumers or to be refunded shall be got approved by the Commission on furnishing all relevant details and data required to enable proper calculation. The issue shall be examined in detail and a report on the procedure followed shall be submitted to the Commission by 31 st January 2007 in order to enable the Commission to make a study of the issue and issue necessary directions in the matter. The Board to drawout an action plan to organize the cost centers upto division level to make them accountable for their performance and submit it to the Commission by 31st March The Board shall submit a detailed report on the current status of R&M and restoration of generating units at both the power stations along with report on action taken about performance parameters of its generating stations by 31 st January, BSEB to expedite the process of setting up of new generation projects in the State and submit quarterly progress report on the same to the Commission. The first such report shall be submitted in April 2007.

38 Directive-26: Employee Cost As per information made available by the BSEB, the employee cost of BSEB is high which stands at about 40% of the total revenue income from sale of power at existing tariff. It works out to be around 120 paise per kwh of energy sold, whereas, in other states, even where the State Electricity Board has not been restructured, it is of the order of 60 paise per kwh of energy sold. There is no infrastructure in some crucial and important activities whereas there is excess staff in some departments which are not so significant. The BSEB is directed to enforce economy and austerity measures in their operations and take urgent steps to reduce establishment cost by utilizing the existing man-power optimally imposing restrictions on creation of post, introducing revised work load norms and also reducing posts which are not significant BSEB shall set up a committee to suggest and recommend deployment of existing manpower to achieve optimum utilization of available work force. BSEB shall also to identify the surplus staff and deploy them after proper training, in the areas of customer service, such as meter reading, billing and revenue realization, so as to provide better service to the consumers. A report on the action taken may be sent to the Commission by 30th June Directive-27: Energy Conservation All categories of consumers should be well apprised of the newly developed latest energy conservation devices so that the energy conserved can be utilized for more productive purposes and in consonance with direction issued by the Ministry of Power, Government of India, it shall be made mandatory to use ISI mark motor pumpsets, power capacitor, foot/reflex bulbs in all new connections in agriculture sector. Directive-28: Investment Programme A quarterly progress report on major investment works should be furnished regularly to the Commission and the first such report for quarter ending March, 2007 be submitted in April Directive-29: APDRP Scheme The status of implementation of these schemes, amount utilized upto 31st December, 2006, the benefits accrued by way of increase in metered sales, reduction of distribution loss, improvement in quality of supply, revenue etc. shall be reported to the Commission by 31 st March

39 Directive-30: Directive-31: Directive-32: Directive-33: Registered and Effective Consumers Cost of Supply and Cross Subsidy Restrictions on Consumption of Energy SCADA and Data Management The services of consumers which are not live for more than three months should be given notice for clearing the arrears and getting the supply restored within a specified time. If they fail to do so, the connection of these consumers shall be dismantled and action taken to realize the dues. Such services shall be closely monitored by the Board and stringent action under the provisions of the Electricity Act, 2003 against such consumers be taken who are availing supply. The service connections having no dues and not willing to take reconnection should be removed from the books immediately. A report on the action taken shall be sent to the Commission by 31st March, BSEB shall carry out the study to ascertain voltage-wise and consumer categorywise cost of supply for better tariff design and submit the study report to the Commission within a period of six months. The Board shall educate the consumers to cooperate with the Board in restricting the use of electricity by voluntary effort. A report on implementation of SCADA and data management scheme should be submitted by the Board for approval by the Commission by March, (C) Suo-motu Proceeding 1/2006 The State of Bihar has been facing massive shortage of electricity since last few years which can be mainly attributed to insignificant generation of power in the State. The Bihar State Electricity Board (BSEB) is undertaking load shedding in urban, agricultural and industrial conglomeration which has added to the sufferings and miseries of the power consumers which become prominent in the summer season. Demand has outstripped available supply by margin of about MW during peak hours. If the estimated demand supply gap of around MW during peak hours in the summer season is not bridged, then load shedding shall become inevitable which is most inefficient way of rationing scarce resource. The alternate measure is to explore the possibility to avoid frequent load shedding and shutdown. Though he Commission had asked the Bihar State Electricity Board to apprise the Commission about the principles and protocols of the load shedding, the response made by the Board is not only perfunctory but also evasive. Like-wise no new statistics have been made available to the Commission about all zones which enjoy immunity to load shedding. 36

40 Sharing feelings and anxieties of the consumers from prolonged power cuts throughout the State particularly during summer season and also regard been had to some allied issues, the Bihar Electricity Regulatory Commission instituted a Suo Motu proceeding calling upon the BSEB, the Licensee in the State, to apprise the Commission about these issues which include transmission and distribution losses which according to statistic furnished by the Board its was 37.69% during the year As for AT&C losses, its magnitude was as per information received by the Board was 46.38%. That apart the Board in its affidavit acknowledged that these figures made available to the Commission about T&D and AT&C losses were estimated figures as metering at appropriate levels were not being done at present. The Board further acknowledges that since there was no metering, technical and commercial losses could not be segregated and the Commission felt that the whole purpose for asking these information are lost, true picture being not before the Commission about extent of losses suffered by the Board in transmission and distribution system. Since Transmission and distribution losses were exceedingly high, the Commission felt that efficient and co-coordinated action to develop an integrated power system in the State was to be given high priority. (2) Since the pilferage of electricity by various category of consumers by illegal tapings from electric poles, tampering of meter is also causing enormous loss of revenue to the Bihar State Electricity Board, the Commission feels that there is urgent need to launch an extensive drive to remove illegal connection, meter tampering and also to keep constant vigil on them. The Commission with a view to take stock of the situation sought following information :- (i) Whether random periodical raids are being conducted in rural and urban areas and also what had been the result. (ii) Whether there is any plan chalked out by the B.S.E.B. to check pilferage of power in the rural and urban areas. It need not be emphasized that no reform can succeed in the midst of large pilferage on continuing basis. It is a matter of common knowledge that the pilferage of power is to the extent of about 1/3rd of total power either generated and / or procured from other sources. The need of the hour is to totally curb the pilferage of power within the premises of provisions of Indian Electricity Act 2003 and also the Indian Penal Code. It was directed by the Commission that a task force be 37

41 constituted in different zones to which the entire licensee area is to be divided to carry out massive raid to arrest pilferage. It also directed that a foolproof mechanism should be developed to monitor the revenue collection and raising of bills of the consumers as pilferage of power by a set of person makes bonafide consumer vicariously liable to compensate the loss suffered by the licensee as there liability is shifted to them. (3) New Electricity Connection and Replacement of Transformer Assuming that Bihar State Electricity Board must have laid down a time schedule for providing electricity connection against application by new consumers as well as repair / replacement of defective transformers and there being need to have a foolproof mechanism in position to ensure adherence to such time schedule, certain informations were sought from the Bihar State Electricity Board. However, the Commission felt distressed to notice that the statistic made available to the Commission were not encouraging. It was desirable that for breakdown and replacement of transformers a well equipped mobile van should be available at the various power sub-stations to attend the complaints and rectify the snag. If required inbuilt crane in the van to lift the transformer to the post and replace it with new one may be equipped. The statistic made available to the Commission by the Board unmistakably shows that the total application received during nine months from April 2005 to December, 2005 were 1, 02,588 out of which only 72,727 number of applicants were provided with service connection as per time schedule and the rest 29,861 number of applicants were yet to get service connection. The statistic further shows that about 7659 number of applications were pending for more than a year for provision of service connection. Though the authenticity of these statistic in absence of other reliable data cannot be questioned, the correctness of these figures even if it considers to be true shows a horrible picture. Similar was the case about number of defective transformers which remained out of service for more than a year. The Commission reiterated that failure of the licensee to make provision of service connection to an applicant within one month of receipt of application shall be in violation of the mandate of Section 43 of the Electricity Act. As for reasons of high power deficit, one of its causes attributed is unmetered supply of power. Section 55 of the Electricity Act 2003 stipulates that no licensee shall supply electricity after expiry of 2 years from the date of its enactment except through installation of a correct meter. 38

42 One must also be aware that in the matter of meter reading and billing of consumers by the utility, there exists considerable consumer dissatisfaction. As such the Commission felt that there is an imperative need to raise the level of consumer satisfaction. Consumers groups must be actively involved in the entire process and 3rd party arrangement for random checking of meters be introduced. (4) Faced with such power scenario in the State which characterizes prolonged power cuts and shutdown, new avenues are to be explored to ensure equitable distribution of power to all and to avoid the possibility of frequent load shedding. The National Electricity Policy stipulates that there is a significant potential of energy saving through energy efficiency and Demand Side Management (DSM) measures. The Commission accordingly in exercise of power under Section 23 of the Electricity Act, 2003, to ensure regulation of supply, distribution, consumption or use of power, suggested a number of load regulation measures which include all residential and commercial consumers consuming more than 300 units per month to reduce their monthly consumption to a level of 80% of their consumption in the preceding month of the current year. The Commission has not apprised by the Board about follow up measures taken by Board to ensure adherence to the direction issued by the Commission. The Commission yet feels that if one does not have adequate resource to cater to the requirement of vast masses, rationing is the only option in a welfare state where everyone has equal right for use of scarce commodity. Since some of these issues are being monitored through directives contained in the Tariff Order, the Commission has confined itself to these issues. The Commission has also forwarded a road map to the Board to carry out energy audit. These issues are being monitored by the Commission through periodical reports to be submitted by the Board. (D) Proceeding in G.C.No.1/2006 Anustha Devi Vs. Bihar State Electricity Board. The apathy of the Licensee to kindle light in the hamlet of the petitioner led the petitioner to knock the door of the Commission taking recourse to provisions of Section 129 of the Electricity Act, However, the claim of the petitioner was defeated by the licensee on the grounds that there was outstanding arrear in the name of the erstwhile consumer to whom the petitioner had succeeded. The Commission after due hearing felt that the claim of the petitioner could not have been delayed in making provision of electricity supply on untenable grounds which were also unethical particularly when affidavit was shown by the Petitioner that in no way the vender was related to him or she had any trade transaction with him. In Isha 39

43 Marbles case, the claim of Wax Pol Industries and Another was rejected by the Hon'ble Supreme Court as in fact ownership of the firm was transferred to no other entity and the directors of the Company were more or less the same persons. The petitioner was a bonafide purchaser from other and hence liability of a neighbour to pay past arrears of the Board could not have been fastened to her. Though it was brought to the notice of the Commission that during pendency of the proceeding service connection had been provided to the petitioner, the Commission felt that it was not a charity nor philanthropic act of the Licensee as it is obliged under statute to provide electricity connection to the person who approaches it with bonafide claim. (E) Review Petition No. 1/2006 Pursuance to issuance of Tariff Order by Bihar Electricity Regulatory Commission on 29th November, 2006 four set of review petitions purported to be under Section 94 (1[f]) of the Electricity Act, 2003 came to be filed by ARC Welding 440 Vidyut Upbhokta Sangh, Secretary, Bihar Industries Association, President, Patna City Vyapar Mandal and Bihar 440 Vidyut Upbhokta Sangh. The upshot of the grievance of the petitioners is imposition of the AMG/MMG/Fixed charges in the tariff order which is a constraint on the consumers particularly LT and HT consumers, without taking into consideration the inadequate and erratic supply of electricity by the Board. The grievance of the petitioners was unnecessarily loaded with these components. The petitioners moved this Commission to make the Energy Department and Industry Department, Government of Bihar and also Bihar State Electricity Board, all respondents, to make them answerable as to why charges, pursuant to declaration of the Industrial Incentive Policy of the State Government which was duly adopted by the Board was not reflected or incorporated in the tariff proposal submitted to the Commission. The Commission felt that as per provision enjoined under Section 108 of the Electricity Act, 2003 in discharge of its functions, the State Commission shall be guided by such directions in matters of policy involving public interest as the State Government may give to it in writing. Though revised tariff proposal was submitted by the Board, no communication was ever made either by the Government of Bihar or by Bihar State Electricity Board to the Commission about such policy of the State Government. If such communication was not made by the Commission, the Commission cannot be faulted for not incorporating the exemption factor in respect of MMG/AMG in the tariff order. Now the significant question as to 40

44 whether consumer would be left in lurch for no fault on their part. Yet there is remedy and there is light at the end of tunnel and here we may quote the provisions of Section 65 of the Electricity Act, 2003 which enjoins that the State Govt. can grant subsidy to any consumer or class of consumers in the tariff determined by the State Electricity Regulatory Commission under Section 62 of the Act. It is option of the State Government to subsidize or not to subsidize. If expectations of the industrial consumers has become high following pronouncement of Industrial Incentive Policy granting exemption, such consumers from payment of MMG/AMG for a period of 5 years, such consumers feel aggrieved availing not such benefits and instead the Commission imposing on them, then who will treat the injury inflated on them. It seems to us that the State Government would not be indifferent and impervious to the grievance of the petitioners if gain of the Industrial Incentive Policy is to reach the prospective beneficiaries. Healing touch must be applied by the State Government which is the sole authority in the matter of grant of subsidy. (F) Consumer Interest Establishment of Consumer Grievance Redressal Forum The Commission is committed under Section 42, 57-59, 110, 111, and 146 of the Electricity Act, 2003 to protect the interest of the consumer in determination of tariff and framing regulations, establishment of grievance redressal for a and electricity ombudsman, payment of compensation by the licensee for failure to meet guaranteed standard. Noticing delay in constitution of Consumer Grievance Redressal Forum by the licensee in pursuance of Section 42 (5) of the Electricity Act, 2003, the Bihar Electricity Regulatory Commission took up the matter in a proceeding of Anustha Devi Versus Bihar State Electricity Board and issued a direction to the Board to constitute the said Redressal Forum as required under the Act and the Regulations framed by the Commission. It was a matter of satisfaction that this salutely resulted and the said Forum was constituted by the Board in the month of August, 2006 which is situated in Vidyut Bhawan Complex in ground floor in Vidyut Bhawan-II and has been functional since then. The Consumer Grievance Redressal Forum has received 99 nos. of grievance from the consumers since inception of the Forum, out of which 50 nos. has been disposed of upto

45 8. MISCELLANEOUS (A) Annual Statement Of Accounts The Commission prepares its budget and forwards the same to the Government of Bihar and the Govt. releases fund in the form of grant in aid in favour of the Commission. The annual Statement of Accounts for the year ( to ) has been got audited by a Chartered Accountant. The report of the Chartered Accountant is given at Annexure-1. The Office of the Accountant General, Bihar also audited the Statement of Accounts for the years and in April (B) Officers and Staff The Commission has engaged 4 officers 12 staff in all categories and one Consultant on contract basis as on to assist in the working of the Commission. (C) Training / Participation in Workshop, Meeting of Forum of Regulators (FOR) & Forum of Indian Regulators (FOIR) The Chairman, Members and other officers of the Commission have been attending the Meetings/Seminars/Workshops/Conferences organized by the Forum of Regulators / Forum of Indian Regulators, Ministry of Power, NTPC, etc. 42

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