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BEFORE THE HARYANA ELECTRICITY REGULATORY COMMISSION AT PANCHKULA

Case No. HERC/RA-10 of 2015 & Case No. HERC/RA-11 of 2015

Date of Hearing: 07.10.2015 Date of Order: 15.10.2015 In the matter of Review Petition against the Commission’s Order dated 7th May, 2015 on True Up of the ARR for the FY 2013-14, Annual Performance Review for the FY 2014-15 and determination of Distribution and Retail supply tariff for the FY 2015-16 for Uttar Haryana Bijli Vitaran Discoms Limited (UHBVNL) and Dakshin Haryana Bijli Vitaran Discoms Limited (DHBVNL).

And in the matter of

1. Shri Sampat Singh, House No. 112, Sector-15, Hisar & Others Petitioner 2. Delhi Metro Rail Corporation Limited (DMRC), New Delhi Petitioner

Vs.

1. Uttar Haryana Bijli Vitran Discoms (UHBVNL), Panchkula Respondent 2. Dakshin Haryana Bijli Vitran Discoms (DHBVNL), Hisar Respondent

QUORUM Shri Jagjeet Singh, Chairman Shri M.S. Puri, Member

ORDER

1. Both the Review Petitions preferred by the parties i.e. Shri Sampat Singh and

DMRC are arising out of the same Order dated 7th May, 2015. Hence, the Commission

considered it appropriate to hear them together and dispose of vide a common Order.

Further, as the review / relief sought by the parties have wider ramification on the ARR/

distribution and retail supply tariff(s) determined by the Commission for the FY 2015-16

w.e.f 1st April, 2015, general public/stakeholders were also invited to participate in the

proceedings.

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2. Brief background of the Case

The Commission, in exercise of the powers vested in it under section 62 of the

Electricity Act, 2003 read with section 11 of the Haryana Electricity Reforms Act, 1997

and all other enabling provisions in this behalf, had passed the Order dated 7th May,

2015, determining the truing-up of the ARR for the FY 2013-14 Annual (Mid-year)

Performance Review for the FY 2014-15 and Aggregate Revenue Requirements /

Tariffs of UHBVNL and DHBVNL for their Distribution and Retail Supply Business under

MYT framework for the FY 2015-16 in accordance with the provisions of Haryana

Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for

Generation Transmission, Wheeling and Distribution & Retail Supply under Multi Year

Tariff Framework) Regulations, 2012 . The Commission, while passing the said Order,

had considered the true-up for the FY 2013-14, APR for the FY 2014-15 and revised

ARR for the FY 2015-16 Petitions filed by UHBVNL and DHBVNL along with

subsequent filings/additional data provided by them including filings made by the two

Utilities in response to the various queries of the Commission, objections received from

various organisations and individuals as well as the suggestions of the SAC Members in

the meeting held on 26.02.2015.

3. Aggrieved by the ibid Order passed by the Commission, Shri Sampat Singh and

DMRC, through Shri Satish Chandra , General Manager, DMRC, have preferred the

present petition(s) seeking review of the said Order. A gist of the review sought by the

petitioners (Supra.) and a few other parties, in response to the public notice issued by

the Commission, is presented below.

4. Petition filed by Shri Sampat Singh, Hisar, dated 27th July, 2015

At the outset Shri Singh had prayed to the Commission “to condemn (sic) the

delay caused inadvertently” in filing the present review petition vis-à-vis the limitation

period specified for the purpose by the Commission.

It has been submitted by the Petitioner that the impugned Order was passed by

the Commission on 07.05.2015. However, the same was given retrospective effect i.e.

from 01.04.2015. This has caused additional financial burden on the electricity

consumers of the State and is against the natural law of justice as any levy or

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enhancement has to be prospective and not retrospective. It has been submitted, with

illustrations, that the claims of HERC regarding telescopic DS tariff is false and

erroneous.

That the accumulated losses of both the Discoms are more than over Rs.27,000

Crore. The Discoms, instead of improving their financial health, are blaming consumers,

Government and the HERC. It is only the inefficiency, incapability, lack of will power,

authority without accountability which is to be blamed. Ultimately sufferers of the losses

are poor and helpless consumers who are paying the enormous and unbearable bills.

The Discoms have adopted the easy way to get loans to make up for their financial

losses. The amount of total loan, as on 31.03.2015, has crossed Rs. 31,069 Crore. i.e.

Rs.19,059 Crore against UHBVNL and Rs.12,010 against DHBVNL. Hence, due to

interest burden, the poor consumer is to pay Rs.1.50 per unit towards this. Further, the

defaulting amount from various consumer categories is about Rs.6000 Crore. Instead of

recovering these amounts, the receivable amounts are increasing every year. Ultimately

the sufferer is the honest and regular payer of electricity bills.

That for the FY 2014-15 and FY 2015-16, the distribution losses of UHBVN &

DHBVN have been fixed as 25% and 23% and that of DHBVN are 24% and 21.96 %

respectively for both the years. If we go through actual AT&C losses, they are more

than 33%. In the neighbouring State of Punjab the AT&C losses are only 15%. It means

that the losses of Discoms of Haryana are 18% more than the 15% of Discoms of

Punjab. Discoms will again go to banks for securing loans to make up these losses and

in turn the consumers will pay either by tariff increase or facing number of FSA's. 1%

loss is loss of Rs.300 crore, so due to AT&C losses, total losses annually would be

more than Rs.5400 crore. It has been suggested that the Discoms may introduce

“Patiala Model” to bring down the aggregate transmission and commercial (AT&C)

losses

That the never ending FSA is imposed only in Haryana. FSA has no place in any

neighbouring States like HP, J&K, Punjab, UP, Uttarakhand, Chandigarh, Delhi,

Rajasthan etc. The helpless consumers are at the mercy of the monopoly of the

Discoms in the case of FSA. Sometime FSA is imposed and withdrawn and again

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imposed. It has been further submitted that M/s Adani was paid Rs.727 Crore more

than the decision of the HERC. Similarly, Pragati Bhawna Gas was paid Rs.550 Crore

more than the amount decided by the HERC. FSA is an additional amount of power

purchase that is recovered in addition to the tariff on per unit basis from the power

consumers. Mostly these FSAs emerge from unavoidable variation in the costs of the

power generators in terms of variation in coal/fuel prices and it is a part of tariff itself.

Contrary to this the prices of coal and fuel have been decreasing day-by-day but still the

never ending FSAs, including holding cost are being imposed on consumers because of

the monopoly of the Discoms.

On the issue of AP Subsidy, it has been submitted by the Petitioner that the

HERC has approved Rs.6200 crore for agriculture subsidy which is to be paid by the

State exchequer i.e. public money. This subsidy is excluding the share money of FSA.

In Punjab, for the FY 2015-16, 10264 MUs have been estimated for the AP consumers

by the Punjab Electricity Regulatory Commission. Subsidy of Rs.4700 crore has been

approved for AP consumption by the Commission for the FY 2015-16. It is very strange

that power purchase for AP consumers in Punjab has been decided as 10264 MUs

which is 20% more than that of Haryana 8571 MUs but at the same time the subsidy

approved by HERC is Rs. 6200 crore as against that of Punjab Rs. 4700 crore i.e. 32%

more than that of the Punjab. Moreover actual power consumption of AP power in

Punjab is 50% more than that of Haryana. So the actual figures of Haryana are doubtful.

The calculation of subsidy of Haryana cannot be justified at any cost. How can we

provide subsidy from our public exchequer i.e. more subsidies for less supply?

The Petitioner has further raised the issue of implementation of HVDS system in

AP at a cost of Rs.1168.07 Crore with no corresponding benefit in terms of reduction in

theft of power, improvement in voltage etc. Additionally, the issue of dubious purchase

of transformers for HVDS and expenditures of about Rs. 3000 Crore under Restructure

Accelerated Power and Power Development & Reform Program has also been raised

by the Petitioner. He also suggested that the comments given by Mr. H.L. Bajaj and Mr.

Anshul Yadav in the SAC Meeting were very valuable but no action has been taken by

the Discoms on their suggestions.

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That the Discoms have never cared for the implementation of directives of the

Commission given in different tariff Orders on the issues including Power Purchase

Cost and PPA, replacement of dead, defective, slow meters, inventory & receivable

management, release of pending connections, liquidating of outstanding receivables,

reduction in feeders having high losses etc. The Petitioner also objected to the amount

allowed by the Commission on account of true-up of ARR for the FY 2013-14 in respect

of O&M expenses, Interest on FRP borrowings and cost of raising finance and bank

charges as well as depreciation.

Appeal

“I would request the HERC to accept my review petition and withdraw its tariff

Order. I would also request the HERC to call me and give me an adequate hearing for

more explanation”.

5. Petition filed by DMRC, New Delhi, dated 27.08.2015

The petitioner, M/s DMRC has submitted as under: -

That despite the submissions of DMRC dated 26.12.2014 as well as their

arguments in the public hearing held on 13.02.2015, their tariff including demand

charges in the FY 2015-16 has been increased by the Commission and has been

brought at par with that of the Railways (traction supply). By creating the parity in the

impugned Tariff Order, the Commission has changed its own stand and hence the rate

of increase in tariff of DMRC is much higher as compared to the Railways thereby the

DMRC has been saddled with additional financial burden of about Rs. 1.8 Crore more

than the Railways on account of tariff. Further, it was submitted that the increase in the

tariff for all other consumer categories ranged between 25 Paisa / unit to 35 Paisa / unit

while in the case of DMRC the increase of 60 Paisa / unit is about double the increase

in tariff in any HT category of the impugned Order.

That DMRC was made a special category due to its unique nature by this

Commission in its Tariff Order for the FY 2010-11. Further, a similar stand was taken

by the Commission in its Tariff Order for the FY 2011-12, FY 2012-13 and the FY 2014-

15 while fixing the tariff for the DMRC. However, the Commission while deciding tariff

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payable by the DMRC in the FY 2015-16, has changed its own stand putting additional

financial burden on the DMRC.

That in accordance with Section 62(3) of the Electricity Act, 2003, differentiation

between consumers can be done on the basis of consumers load factor, power factor,

voltage, total consumption of electricity during any specified time at which supply is

required or geographical position of any area, nature of supply and purpose for which

supply is given. It has been submitted that DMRC takes electricity supply at EHV i.e. 66

kV and it does not contribute to the losses of the Discoms below 66 kV. All losses within

DMRC’s network is borne by DMRC itself. Further, DMRC’s load factor is also

moderately high and is 57% on 24 hours scale and 76% for working hours. Additionally,

DMRC has adopted most efficient technologies in designing its system since conceptual

stage, hence, its power factor is close to unity.

In addition to the above DMRC brought out the various advantages as a public

utility including environment i.e. regeneration of power and carbon credit thereto, de-

congestion of the heavy traffic areas in Delhi and conservation of electricity. The

Petitioner, in support of its prayers including demand for separate tariff lower than the

Railway (traction) has also cited Section 61 of the Electricity Act, 2003.

The Petitioner also prayed that during power extension to Delhi area from

HCC/RSS during power failure of Delhi Discoms, the actual / maximum demand may

not be made applicable for DMRC and such actual / maximum demand during this

period of power extension needs to be ignored.

6. Objections / Comments filed by Consumers / Associations

In addition to the above review petitions, quite a few other stakeholders also filed

their submissions. Lists of such petitioners and the issues raised by them are as under:-

i. Panipat Kambal Mfg. Association through Shri Varinder Rawal, Secretary.

ii. Chamber of Textile Manufacturers Association, Panipat, through Shri

Rakesh Chugh, President.

iii. Consumers Association, Panchkula through its President / General

Secretary.

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iv. Citizens Welfare Association, Panchkula through Shri S.K. Nayar,

President.

v. Industrial Estate Association, Panipat through Shri Bhagwan Aggarwal,

General Secretary.

vi. Jt. Action Forum of Residents Association, Gurgaon through Col. Ratan

Singh, Chairman.

vii. Shri Abhay Jain, Social Worker, Gurgaon.

viii. Shri Dalip singh and 26 Others, Panchkula.

ix. Shiv Sena Parliamentary Party, New Delhi through Prof. Satya Pal Gupta,

Office Secretary.

x. Shri Upkar Singh Verma, AO, Al-Falah School of Engg. & Tech.

xi. Shri N.K. Garg, Chairman, Confederation of RWAs, Faridabad.

xii. Shri Ajay Parashar (email dated 10.08.2015)

In brief, the above interveners have objected to introduction of the following

besides pointing out the inefficiencies of the Discoms including high line losses and

non-compliance of the Orders / directives issued by the Commission leading to

abnormal rise in tariff:-

i. Introduction of kVAh based billing system without having requisite

infrastructure and without any advance notice to the consumers.

ii. Levy of Sundry Charges without providing the details.

iii. Voltage issue at Discoms end impacting Power Factor at the consumers

end.

iv. Non Payment of interest on ACD.

v. Non Levy of Fixed Charges during April to July 2015 as per the Order

dated 7th May, 2015.

vi. Fuel Surcharge Adjustment (FSA) being illegally recovered by the

Discoms.

vii. The average cost of power purchased by the Discoms is Rs. 2.50/unit as

against this the DS consumers having consumption of 501 units/month are

made to pay Rs. 8.50/units which is in violation of the fundamental

principle that extra charges / taxes cannot be in excess of 20% of the

principal amount.

viii. Consumer Meters are running fast, preparation and distribution of bills are

not as per HERC guidelines.

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ix. Losses have increased despite spending a lot of money on bifurcation of

feeders.

x. There is no justification for increase in tariff as cost of fuel (oil and coal)

have declined sharply.

xi. Monthly bills should be issued instead of bi-monthly.

xii. FSA, Electricity Duty and Municipal Tax are unwarranted and should not

be levied.

xiii. Discoms expenses i.e. Administrative / Employees cost (including free

electricity) should be reduced and tariff should be reduced to Rs. 6.0/unit.

xiv. Telescopic tariff should be made applicable over the entire range of

consumption in line with Delhi.

xv. MMC in Haryana is very high i.e. 300% higher than Delhi. Hence, the

Delhi MMC schedule should be adopted in Haryana.

7. Reply filed by the Discoms in Case No HERC/RA-10 & HERC/RA-11

The Discoms have filed a detailed reply as under:-

Reply in Case no HERC/RA-10

1) Retrospective effect of tariff Order

That in compliance to the provision of the MYT Regulations, 2012, UHBVNL and

DHBVNL filed the Petitions no. PRO 62 of 2014 and PRO-63 of 2014 for APR of 2014-

15, revised ARR for FY 2015-16 and true-up of ARR for the FY 2013-14 on 1.12.2014

and 30.11.2014 respectively. The Hon’ble Commission notified the tariff Order for

UHBVN and DHBVN vide the Order dated 07.05.2015 w.e.f. 01.04.05.

That Tariff Order dated 07.05.2015 has been issued with retrospective effect

after taking the holistic view of the sector and keeping the interest of the end consumers

at priority. Any delay in recovery or shortening of the recovery period would have

caused additional burden on the consumers of the Discoms. Also, making Tariff Order

retrospective from the date of the commencement of the financial year does not amount

to inflicting legal injury to some other person because whatever is allowed in the tariff is

necessarily passed through. Again, it cannot cause legal injury if claim of the Appellant

is legally justifiable. The decisions referred to by learned Counsel for the Appellant are

out of context.

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That this Hon’ble Tribunal in its judgements has already settled the issue of

retrospective operation of a tariff Order. It is submitted that the issue of Retrospectivity

is covered by judgement dated 31.05.2013 passed by this Hon’ble Tribunal in Appeal

No. 179 of 2012, Kerala High Tension and Extra High Tension Industrial Electricity

Consumer’s Association v. KSERC & Anr. This Hon’ble Tribunal held as under in the

above mentioned judgement:

“74. Let us now refer to findings of the full bench of the Tribunal dated

26.5.2006 in Appeal no.4 of 2005 & batch in case of Siel Ltd. which has

upheld the retrospective determination tariff by the State Commission and

which has been referred to by the learned counsel for the Respondent Board.

The relevant findings are as under:

“77. Some of the Industrial Consumers have questioned determination

of tariff by the Commission on the ground that the effect of the Tariff Order

for the year 2005-06 was given from April 1, 2005 while the Order was

passed on June 14, 2005. According to them the Commission was not

having any jurisdiction to require the consumers to pay enhanced tariff

from a retrospective date.

78. In Order to determine the reasons which led to the passing of the

tariff Order on June 14, 2005 instead of it being passed on March 31,

2005, it is necessary to refer to a few dates. The Board filed ARR and tariff

application on December 30, 2004. The application, however, was found

to be incomplete. The Commission by its communication dated January

21, 2005 asked the Board to remove the deficiencies and complete the

application. It was, however, only on Feb., 9, 2005 that the deficiencies

were removed and the application was taken on record. This led to delay

in the determination of tariff for the year 2005-06. The Commission was

able to pass the tariff Order only on June 14, 2005, though the financial

year commenced on April 1, 2005.

79. It is not in dispute that the Commission determined the tariff for the

year 2005-06. The Industrial Consumers would not have been able to

grudge the application of the tariff Order with effect from April 1, 2005, in

case the tariff Order was passed on that date or on a date close to that

date. It is only because the tariff Order was delayed by about two months

that the Industrial Consumers are finding fault with its application from

April 1, 2005.

80. It needs to be noticed that the retrospective operation covers only a

period of two months and having regard to the short time involved, the

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Commission was of the view that the interest of the consumers will not be

adversely affected by the retrospective operation of the tariff Order.

81. We do not find that the Commission was wrong in its approach by

giving effect to the tariff Order from the aforesaid retrospective date as the

tariff was fixed for the tariff year 2005-06, which commenced on 1st April,

2005. If the submission of the Industrial Consumers is accepted, a

consumer could initiate some proceedings in a Court against the

Commission with a prayer for seeking an interim Order restraining the

Commission from revising the tariff on some ground or the other. This

could delay the passing of the tariff Order in case an interim Order

interdicting the determination of tariff is passed pending the proceedings.

In such a contingency, it is only after the interim Order is lifted by the

Court that the Commission would be in a position to pass the tariff Order.

Obviously, it would only be just and fair that the tariff Order relates back to

and commences on the first day of the year for which the tariff

determination is made. In Kanoria Chemicals & Industries Ltd. & Anr.Vs.

State of U.P. & Ors. (1992) 2 SCC 124, a question was raised with regard

to the competence of the Electricity Board to determine tariff with

retrospective effect. The Supreme Court was of the view that retrospective

effect to the revision of tariff was clearly envisaged in law. In this regard,

the Supreme Court held as follows:

“A retrospective effect to the revision also seems to be clearly

envisaged by the Section. One can easily conceive a weighty

reason for saying so. If the Section were interpreted as conferring a

power of revision only prospectively, a consumer affected can

easily frustrate the effect of the provision by initiating proceedings

seeking an injunction restraining the Board and State from revising

the rates, on one ground or other, and thus getting the revision

deferred indefinitely. Or, again, the revision of rates, even if

effected promptly by the Board and State, may prove infructuous

for one reason or another. Indeed, even in the present case, the

Board and State were fairly prompt in taking steps. Even in January

1984, they warned the appellant that they were proposing to revise

the rates and they did this too as early as in 1985. For reasons for

which they cannot be blamed this proved ineffective. They revised

the rates again in March 1988 and August 1991 and, till today, the

validity of their action is under challenge. In this State of affairs, it

would be a very impractical interpretation of the Section to say that

the revision of rates can only be prospective”.

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82. Section 62, which provides for determination of tariff by the

Commission, does not suggest that the tariff cannot be determined with

retrospective effect. In the instant case, the whole exercise was

undertaken by the PSERC to determine tariff and the annual revenue

requirement of the PSERB for the period April, 1, 2005 to March 31, 2006,

therefore, logically tariff should be applicable from April 1, 2005.

83. According to sub-Section (6) of Section 64 of the Act of 2003, a

tariff Order unless amended or revoked continues to be in force for such

period as may be specified in the tariff Order. Thus the Commission is

vested with the power to specify the period for which the tariff Order will

remain in force. The Commission deriving its power from Section 64(6)

has specified that the Order shall come into force from April 1, 2005. No

fault can be found with such a retrospective specification of the

Commission.

84. The learned counsel for the industrial consumers relied on the

decision of the Supreme Court in Sri Vijay Lakshmi Rice Mills vs. State of

Andhra Pradesh, AIR 1976 SC 1471, wherein it was held that a

notification takes effect from the date it is issued and not from a prior date

unless otherwise provided by the statute, expressly or by appropriate

language from which its retrospective operation could be inferred. This

decision is of no avail to the industrial consumers, in view of the provisions

of Section 64 (6) of the Act of 2003, which empowers the Commission to

specify the period for which the tariff Order will remain in force. In other

words, the Commission is empowered to specify the date on which the

tariff Order will commence and the date on which it will expire.

85. The Board in consonance with the cost plus regime is entitled to

recover all costs prudently incurred for providing service to the consumers.

Besides, the Board is entitled to reasonable return. Since the cost

prudently incurred has to be recovered, therefore, in the event of the tariff

Order being delayed, it can be made effective from the date tariff year

commences or by annualisation of the tariff so that deficit, if any, is made

good in the remaining part of the year or it could be recovered after truing

up exercise by loading it in the tariff of the next year. All these options are

available with the Commission.

86. There is one more aspect which needs to be considered. In case

the Commission had lowered the tariff rates, relief to the consumers could

not be denied on the ground that the tariff Order is being operated

retrospectively.

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87. For all these reasons we hold that the Commission had the

jurisdiction to pass the tariff Order with retrospective effect. Therefore, we

reject the submission of the learned counsel for the industrial consumers

that the tariff cannot be fixed from a retrospective date.”

In the above judgment the Tribunal has relied on the findings of the Hon’ble

Supreme Court in (1992)2 SCC 124 in the matter of Kanoria Chemical Industries Vs.

State of UP in which the Hon’ble Supreme Court upheld the retrospective revision of

tariff. The findings of the Tribunal in the Siel case will be applicable to this case also.

If the tariff is made applicable from the date of Order i.e. 07.05.2015, the revenue

gap in the ARR due to short recovery of the approved revenue will have to be allowed in

the ARR and tariff of the subsequent year with carrying cost which will unnecessarily

burden all the consumers with the carrying cost.

2) Accumulated Losses

That the Discoms had to address the shortfall of revenue owing to the

unaddressed revenue gaps in the tariff Orders of the preceding years (based on

allowance of each of the legitimate expenses) by way of borrowings. Hence, despite

performance improvement measures that had been stringently been taken by the

Discoms, the cascading effect of the ever-time piling up of unaddressed revenue gaps

has lead to accumulated losses of the Discoms to the present level. The reasons that

have lead to the financial distress of the Discoms are given hereunder:-

Regulatory Reasons

No tariff increase for nine years from 2001-02 to 2009-10.

Delay in approval of FSA coupled with staggering of recovery of FSA over 3-4

years.

Significant disallowance of costs by HERC in the ARR Orders. (~only 33% of

Interest & Finance charges allowed by Commission during 2011-12 to 2013-

14)

Deficit in the revenue requirement (ARR) was bridged through creation of

Regulatory Assets/acknowledgement of uncovered revenue gap rather than

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tariff increase. The borrowings against this regulatory asset/gap further

increased the debt servicing cost.

Inadequate RE subsidy due to disallowance of Agricultural sales

Other Reasons

Due to poor financial health of Discoms banks stopped funding in June 2011.

Significant increase in employee cost attributable to 6th Pay Commission.

Massive receivables in books of accounts due to socio-political factor

amounting to over Rs. 4900 Crores as on 31 Mar 2012 (UHBVN & DHBVN).

Accordingly, both the Discoms (UHBVN and DHBVN) are undergoing financial

restructuring under FRP notified on 05th October 2012 by Ministry of Power, Govt. of

India. The successful implementation of the scheme is absolutely critical from the

perspective of financial turnaround of the Discoms. Further, it is pertinent to note that

the term of FRP is co-terminus with that of MYT control period. The total financial

restructuring under FRP scheme envisaged for both Discoms on aggregated basis is

Rs 21,439 Cr, which needs to be repaid over a period of time including the control

period of present MYT Regulations. Thus, in Order to achieve the targets set in the

Financial Restructuring Plan, it is essential for every stakeholder therein to perform for

improvement in line with the FRP.

Therefore, it can be established from the facts presented above that the valuable

consumers of the Discoms are in no way burdened and only legitimate cost is passed

on to the consumers.

3) Defaulting Amount

That there has been a reduction in the amounts receivables with time owing to

stringent revenue recovery measures being taken up by the Discoms.

The category wise Defaulting Amount and No. of defaulters in respect of UHBVN

ending March, 2015 are given below. It may be seen that the total number of connected

and disconnected consumers and defaulting amount that correspond to the Domestic-

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Rural, Agriculture, Irrigation and Panchayat together correspond to 73% of the total

defaulting number of consumers and total defaulting amount.

Name of Category UHBVN

Connected Dis-Connected Total

No. Amt. No. Amt. No. Amt.

Private

Domestic (Rural) 263071 56698.56 231425 57088.64 494496 113787.20

Domestic (Urban) 56563 4289.74 77322 7668.01 133885 11957.75

Total Domestic 319634 60988.30 308747 64756.65 628381 125744.95

Non Domestic 36792 5498.27 39774 6181.20 76566 11679.47

Agriculture 104685 5945.03 13043 1683.19 117728 7628.22

Industrial 2870 9050.33 6199 4391.81 9069 13442.14

Total 463981 81481.93 367763 77012.85 831744 158494.78

Government Dept

Irrigation 175 3966.42 251 108.63 426 4075.05

M.Cs (Street light) 282 1252.73 18 88.51 300 1341.24

Panchayat 195 40.72 104 52.11 299 92.83

Public health 6249 8316.02 11 10.52 6260 8326.54

Other Govt. Dept. 262 1247.26 44 84.33 306 1331.59

Total 7163 14823.15 428 344.10 7591 15167.25

G. Total 471144 96305.08 368191 77356.95 839335 173662.03

That the Discoms have been endeavouring their best to reduce the arrears and

has decided to introduce scheme for Settlement of various categories of Electricity

consumers where disputes are pending in Courts/Arbitration/DCDRF/State

Commission/National Commission etc, in the Lok Adalats being held regularly in the

entire District Head Quarters under the jurisdiction of UHBVN. Thus, the Sales Circular

No. U- 42/2014 dated 20.11.2014 was notified by the UHBVN and the scheme was

opened upto 31.12.2014.

Moreover, it was observed that defaulting amount / arrear against various

categories of consumers was accumulating / increasing, in spite of repeated

instructions/persuasions. The major portion of defaulting amount / arrears is outstanding

against Rural Domestic Supply (RDS) consumers. Therefore, to recover the arrears, a

simple one time settlement scheme has been approved by Government of Haryana.

Accordingly, Sales Circular no.U-32/2013 dated 23.07.2013, U-44/2013 dated

18.9.2013, U-46/2013 dated 25.09.2013, U-50/2013 dated 11.10.2013 and 63/2013

dated 23.12.2013 were issued from time to time vide which one time settlement of

defaulting amount along with assured power supply to RDS (Rural domestic supply)

consumers was launched. Similarly, in compliance to the decision of the Government of

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Haryana dated 02.01.2014, the matter was re-considered and the salient features /

guidelines for implementation of the scheme were notified vide the Sales Circular No.U-

05 /2014 dated 10.1.2014. Recently, the Discoms has also introduced “Mhara Gaon Jag

Mag Gaon Scheme” w.e.f. 01.07.2015 to accelerate the recovery of arrears, reduce the

commercial losses and improve the quality of supply.

DHBVN has also decided to introduce a scheme for Settlement of various

categories of Electricity consumers where disputes are pending in Courts/ Arbitration/

DCDRF/ State Commission/National Commission etc, in the Lok Adalats being held

regularly in the entire District Head Quarters under the jurisdiction of DHBVN. Thus, the

Sales Circular D-45/2014 dated 24/11/2014 was notified by the DHBVN and The

scheme was opened upto 31.12.2014.

Moreover, the DHBVN had notified the Sales Circular No D-2/2014 dated

10/01/2014 regarding Implementation of Pillar Box Scheme. In compliance to the

decision of the Government of Haryana dated 02.01.2014, it was decided that “Pillar

Box Scheme” of distribution utilities is on voluntary basis and those villages which are

willing to adopt “Pillar Box Scheme” will only be covered under the scheme. There

would not be any forcible adoption of the scheme. This system should be implemented

in those villages and areas only where residents voluntarily come forward requesting

the Discoms to erect the new safe and reliable system. The areas opting for the “Pillar

Box Scheme” of power distribution will be given power supply for 24 hours a day.

Further, the consumers having the “Pillar Box System” will be given a rebate of 20% in

bills. As the capacity of the system will be augmented and whole system would be

renovated, there would neither be breakdowns nor trippings. Also, the problem of low

voltage would be resolved.

Moreover, it was observed that defaulting amount / arrear against various

categories of consumers was accumulating / increasing, inspite of repeated

instructions/persuasions. The major portion of defaulting amount / arrears is outstanding

against Rural Domestic Supply (RDS) consumers. Therefore, to recover the arrears, a

simple one time settlement scheme has been approved by Government of Haryana.

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Accordingly, Sales Circular D-38/2013 dated 17/07/2013 , Sales Instructions

Number 14/2013 date 11/09/2013, Sales Circular Number D-50/2013 dated 26/09/2013

and D-54/2013 dated 10/10/2013 were issued from time to time vide which one time

settlement of defaulting amount alongwith assured power supply to RDS (Rural

domestic supply) consumers was launched.

Similarly, in compliance to the decision of the Government of Haryana dated

02.01.2014, the matter was re-considered and the salient features / guidelines for

implementation of the scheme were notified vide the Sales Circular No.D-2/2014 dated

10/01/2014.

That theft detection has been made proactive. Implementation of mandatory

lodging of online FIRs has improved quantum of detection and disposal of cases.

It is appraised that DHBVN has constituted theft detection teams to reduce

commercial leakages through theft/pilferage. The summary of circle wise theft detection

program conducted jointly by OP Organization and vigilance Organization, for the

FY 2014-15 (ending June-15) has been presented as below:-

Name of circle

2015-2016 (upto June-15)

Conn. Checked

Theft Detected

Penalty imposed

Penalty recovered

FIR Lodged

FIR Regd.

Faridabad 1428 865 302.43 102.03 482 153

Palwal 1620 767 211.69 87.68 442 322

Gurgaon 717 369 294.5 122.27 183 69

Narnaul 188 156 53.98 33.57 29 0

Rewari 5075 261 161.56 64.85 59 0

Bhiwani 7013 963 152.92 116.8 412 92

Hisar 5215 1276 326.71 149.71 810 0

Sirsa 1354 357 98.73 49.14 267 20

Jind 1051 453 157.91 93.42 209 181

DHBVN 23661 5467 1760.43 819.47 2893 837

That the outstanding arrears from connected/disconnected consumers are also being

recovered by launching arrear recovery drives/schemes and by assigning arrear

recovery targets to the sub-divisions. The progress of disconnection effected & recovery

of defaulting amount for FY 2014-15 (ending of June- 2015) has been presented as

below:-

Month Connection Disconnected Amount recovered

No. Amt. No. Amt.

DHBVN As Whole (FY 2014-2015)

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Apr-14 11571 3048.50 48467 3916.36

May-14 12713 3163.98 60303 4687.35

Jun-14 11408 2765.17 52184 4088.64

Jul-14 10090 2224.53 55204 5073.58

Aug-14 8774 1625.10 56420 4566.49

Sep-14 10720 2351.75 59665 5387.15

Oct-14 10585 1822.31 53781 5065.82

Nov-14 13812 3303.60 80231 7320.57

Dec-14 13987 3790.27 87120 7353.03

Jan-15 12443 3690.15 71274 5434.60

Feb-15 12668 3951.33 70051 5099.64

Mar-15 13337 2927.32 69608 5197.71

Total 142108 34664.01 764308 63190.94

DHBVN As Whole 2015-16

Apr-15 8074 1769.55 51882 4195.08

May-15 8777 1484.70 54148 3833.87

Jun-15 7391 1501.29 60016 5602.89

Total 24242 4756 166046 13631.84

Through the above submissions, it is submitted that DHBVN has been making all

possible efforts to overcome the loss levels. Moreover,

• RIB (Remittance in Banks) targets for field offices are being based on

normative AT&C losses.

• Centralized Software for exception report generation and monitoring for under

billing, theft of electricity has been implemented.

Monthly Minimum Charges

Monthly Minimum Charges are applicable on all domestic consumers and for

NDS consumer with load upto 20 kW. The billing data of these categories were

analyzed for the months of Jan. to Nov., 2014 wherein it has been observed that the

percentage of DS and NDS consumers being billed on MMC is 16% & 24%

respectively. The details in this regard is depicted in the table given below: -

Name of Category

Total No. of Consumers

No of Consumers billed on MMC

% of Consumers billed on MMC

Avg. Monthly amount billed against MMC ( Cr.)

DS 1829836 289081 16% 10.90

NDS 181897 43892 24% 3.31

For NDS Consumers

That the MMC charges if converted in consumption terms for normative load

factor and running hours translate in to consumption of three to four days for Urban

NDS supply and five to six days for NDS rural supply as under.

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Non Domestic Demand Factor

Supply Hours

Day/ Month

kWh/Month EC/Day (Rs.)

MMC FC ( Approx days of energy uses ) Urban

FC ( Approx days of energy uses ) Rural

Urban Rural

Upto 5 kW (LT) 1. Energy Charges (

Rs.5.85/kWh) 2. MMC (Rs. 200/kW upto 5 kW

and Rs. Rs. 185/kW above 5 kW upto 20 kW)

0.8 12 8 25 1200 for Urban

consumers and 800 for

Rural consumers

280.8 for Urban & 187.2 for

Rural

1000 (For 5

kW Load)

4 6

Above 5 kW and Up to 20 kW (LT)

1. 1. Energy Charges ( Rs.6.10/kWh)

2. MMC (Rs. 200/kW upto 5 kW

and Rs. Rs. 185/kW above 5 kW upto 20 kW)

0.8 12 8 25 2400 for Urban

consumers and 1600 for

Rural consumers

585.6 for Urban &

390.4 for Rural

1925 (For

10 kW Load)

3 5

For DS Consumers:

The MMC charges if converted in consumption terms for normative load factor

and running hours translate in to consumption of 3 to 4 days for Urban DS supply and 8

days for DS rural supply. The details in this regard is depicted in the table given below

Domestic Demand Factor

Supply Hours

Day/ Month

kWh/ Month

EC/Day (Rs.)

MMC FC ( Approx days of energy uses) Urban)

FC ( Approx days of energy uses) Rural)

Urban Rural

1. Energy Charges

Category 1

0-40 unit – Rs. 2.70 per Unit

41-250 unit –Rs.4.50 per Unit

251-500 unit-Rs. 5.25 Per Unit

501-800 unit -598 per Unit Category 2

For 801 & above Rs. 5.98 for all consumptions

2. MMC (Rs. 100/kW upto 2 kW

and Rs. Rs. 60/kW above 2 kW)

0.25 16 8 30

720 for Urban and

360 for Rural

122.70 for Urban and 54.35 for Rural

440 (For 6

kW Load)

4 8

Most of the consumers who are being billed on MMC basis are manipulating their

consumption to the limit of MMC. It is also observed that the lifestyle of consumers have

changed drastically and modern electrical gadgets are even being used by low income

consumers. However, their electricity consumption is not commensurate to their

connected load and they are generally limiting their consumption upto MMC limit. Since,

19 | P a g e

there is a lot of undeclared load, proper MMC is also not being levied on such

consumers.

AT&C Losses

That the Discos are endeavouring their best to reduce distribution losses in line

with the postulates of FRP. Moreover, it may be seen that for the FY 2014-15 and 2015-

16, the AT&C losses notified by the Ministry of Power, Government of India for the State

of Haryana, are higher than the stringent norms of losses notified by the Hon’ble

Commission.

Further, as per provisional figures, the AT&C losses achieved is 24.09% for

FY 2014-15 against target of 23.96% and there is only marginal under

achievement.

Payment of Rupees 40.69 crore has not been received from Govt.

Departments against the outstanding bills raised on them due to non availability

of Budget with these Departments. In case these Govt. Departments had paid the

bills, the AT & C Losses would have been 23.78%

FSA

That the FSA is a part of tariff and, in reality, a surcharge levied to meet the

increased cost of generation and purchase of electricity. It is stated that under the

Electricity Act, 2003 (hereinafter referred as the “Act of 2003” for the sake of brevity)

expert bodies (like State Electricity Regulatory Commissions) have been constituted

and are entrusted with the task of determination of tariff and adjudicate the issues

regarding FSA along with the related issues.

It is pertinent to mention that,

The power generation companies pass on the increase of cost of power

(produced due to increase in coal/fuel prices on monthly basis based on

demand and supply of coal) to the distribution companies which gets

legitimately passed on to the consumers.

20 | P a g e

SERCs of various States revises the tariffs for electricity periodically (every

year or once in every two to three years). The new tariff is set based on the

cost of production and distribution of electricity. But the prices of fuel or coal

changes throughout the year and the utilities have to manage these

uncontrollable cost variations by legitimately passing them to the consumers.

The amount of FSA is an effect of intermittent increase in the power purchase

cost.

However since the FSA amount is more, the recovery spills over a period of

three – four years. The HERC also in the past when the FSA was levied after

the end of the year after HERC approval allowed the recovery of FSA over

three – four years, though the Discoms incurred and paid the entire cost of

power purchase on a regular basis during the year itself.

It is submitted that the Discoms- Uttar Haryana Bijli Vitaran Discoms (UHBVN)

and Dakshin Haryana Bijli Vitaran Discoms (DHBVN) apply Fuel Surcharge

Adjustment as a pass-through cost to its consumers in accordance with

HERC (Terms and Conditions for Determination of Tariff for Generation,

Transmission, Wheeling and Distribution & Retail Supply under Multi Year

Tariff Framework) Regulations, 2012 on a quarterly basis. Accordingly, per

unit fuel cost pass through gets calculated based on the norms and guidelines

laid down by Haryana Electricity Regulatory Commission.

The FSA up to 10% of the approved cost of power purchase for the respective

financial year is automatically passed through to the consumers, on a

quarterly basis by the Discoms.

That Discoms, have been furnishing the calculations pertaining to FSA, to the

Commission. It is submitted that Uttar Haryana Bijli Vitran Discoms Ltd. has been

submitting the details of FSA to the Hon’ble HERC on behalf of both the distribution

licensees within the State of Haryana. The Discoms- UHBVN vide Memo No. Ch-

14/GM/RA/N/F-54/Vol-X (A) dated 23.12.2014, on behalf of the two Distribution

21 | P a g e

Licensees i.e. UHBVNL and DHBVNL (hereinafter referred to as the DISCOMS), had

filed a petition for continuation of recovery of FSA from various category of electricity

consumers in their respective licensed areas for the FY 2011-12, FY 2012-13, FY 2013-

14 and for true-up of FSA Order dated 14/06/2010, 12/08/2011 and 26/06/2012. The

details included re-calculations of FSA amounts based on audited figures and true-up

exercise towards continuation of recovery of FSA from various category of electricity

consumers in their respective licensed areas owing to unrecovered FSA amounts

including holding costs for the FY 2011-12, FY 2012-13, FY 2013-14 and for true-up of

recoveries under FSA Order dated 14/06/2010, 12/08/2011 and 26/06/2012.

That the Commission, after the overall scrutiny of the petition filed by the

petitioners, notified the Order dated 19.3.2015 in Case No. HERC/PRO-16 of 2014

wherein the Hon’ble Commission has already approved the recovery of FSA for the FY

2008-09 to FY 2013-14 based on the actual Audited sales of the Discoms. The

applicability of holding costs on the unrecovered amounts have been legitimately

allowed by the Hon’ble Commission vide Order dated 19.3.2015 over the unrecovered

amounts of FSA so that the Discoms remain revenue neutral. The aforesaid Order has

been notified by the Hon’ble Commission post prudence check of the bills raised by the

power generators on the Discoms and thus legitimate approvals have been provided by

the Hon’ble Commission to the levy of FSA.

Moreover, the Commission has already directed the Discoms vide HERC Memo

No 2346-2347/HERC Dated 12.9.2014 that the distribution companies can recover FSA

for the previous quarter including arrears of FSA for the previous year’s subject to a cap

of 10% of the average power purchase cost for the relevant year and that the same

does not call for any specific approval from the Commission.

It is further submitted that according to section 62(4) of the Act of 2003, the tariff

may not ordinarily be amended more frequently than once in a financial year, except

any changes expressly permitted in terms of the fuel surcharge formula specified by the

Appropriate Commission. Variation in price of fuel of a generator supplying power to a

distribution licensee will affect the Power Purchase Cost of the distribution licensees.

22 | P a g e

Thus the change in Power Purchase Cost due to variation in fuel cost could be

permitted by amending tariff in terms of the fuel surcharge formula specified by the

State Commission more frequently than once in a financial year.

Hence, the recovery of FSA has always been legitimately done in accordance

with the HERC MYT Regulations 2012 and with due concurrence from the HERC. Thus,

all allegations made by the Petitioner are denied in totality.

Agriculture Subsidy

That the agriculture subsidy is calculated on the basis of the cost of supply to

agriculture consumer, tariff applicable and quantum of agriculture sales. It is also

pertinent of mention that the Power Purchase mix of the States of Punjab and Haryana

is totally different from each other. Moreover, the average Cost of supply for Agriculture

consumers in Haryana as notified vide the Tariff Order dated 07.05.2015 is Rs

7.34/kWh against the average cost of supply for agriculture consumers in Punjab is

4.58/kWh. Therefore, a direct comparison between total quanta of subsidy factoring in

only the quantum of agriculture sales won’t be accurate.

HVDS system in AP

That any capital expenditure done by the Discoms is duly approved by the

Commission. Also, a study on the benefits of HVDS was got conducted in 2012 and the

corresponding results were demarcated as tangible and intangible benefits. A sample of

50 feeders was selected so as to have a good representation of each division and that

the feeders cover different geographical areas. The tangible benefits included reduction

in energy input requirement, reduction in energy billed, increase in the number of

consumers and connected load, reduction in T&D losses, and reduction in the

transformer failure.

Reduction in energy input requirement: Analysis of Energy Input for

selected feeders reveals that post– HVDS implementation, there is an overall

reduction in the Energy Input (30%). Further, overall energy input per

consumer has been reduced by 15%.

23 | P a g e

Reduction in energy Billed: The overall energy billed during post– HVDS

period implementation period has reduced by 25%. While overall energy input

per consumer has reduced by 15% the energy billed per consumer has

reduced by 9%.

Increase in the number of consumers: The number of consumers has

increased which can be taken as reduction in the theft by direct “hooking”.

The increase in number of consumers was around 12 consumers per feeder.

Increase in connected load: The increase in consumers and load extension

by the existing consumer has resulted in the increase in the connected load

apart from few exceptions which could have been due to feeder

reconfiguration.

Reduction in T&D losses: 83% feeders contributed in the overall 6% T&D

loss improvement. This was mainly on account of the reduction in technical

losses due to high voltage distribution and plugging of unauthorized use of

electricity.

Reduction in Transformer Damage Rate: From the data available on

sample feeder, it can be seen that the overall transformer damage rate has

reduced to 3.58% post HVDS.

That as per the audited account of UHBVN the Distribution losses for the FY

2011-12 were to the tune of 31.20 %. The distribution losses for UHBVN in the FY

2010-11 were 24%. The sudden increase in the losses in mainly on account of the

revision in methodology of estimation of sales to Agriculture category in the FY 2011-12

i.e. the methodology based on the AP feeder input units. Further the Discoms increased

the supply hours in rural areas from 11 hours to 14 hours which by itself leads to an

increase of about 2.8% in the overall average losses because of over 60% losses in

rural areas.

Dubious purchase of transformer in High Voltage Distribution System: -

That under HVDS system, there was no provision of installation of Small

transformers to be mounted on poles under the objective of supply to consumers in

24 | P a g e

case of SC, BC & BPL free connection scheme. Such a provision was a part of the

RGGVY scheme, and thus the installation of Small transformers mounted on poles

under RGGVY scheme had been done and post that the scheme was discontinued

owing to high pilferage losses and misappropriation.

AT&C losses

That the claim of petitioner are unjustifiable and the Discoms have been

endeavoring its best to reduce the technical and commercial loss levels in concurrence

with the Hon’ble Commission. The Discoms has constituted theft detection teams to

reduce commercial leakages through theft/pilferage. The outstanding arrears from

connected/disconnected consumers are also being recovered by launching arrear

recovery drives/schemes and by assigning arrear recovery targets to the sub-divisions. .

Various initiatives have been taken by the Discoms like Mhara Gaon Jag Mag Gaon

Scheme and others in Order to reduce the technical and commercial losses and to

improve the operational efficiency, has been mentioned herewith: -

The salient feature of Mhara Gaon Jag Mag Gaon Scheme

1. The Scheme shall be applicable to the consumers of the villages covered

under the Mhara Gaon Jag Mag Gaon Scheme on selected RDS feeder in

each constituency.

2. The supply hours of the consumers of selected feeders has been

increased from 12 to 15 hours w.e.f 01.07.2015.

3. The principal amount of the old arrears will be recovered from the

consumers of the village in five regular instalments along with current bills,

after paying the last bill and instalment, entire surcharge amount will be

waived off on the selected feeder.

4. Reconnection at defaulter premises shall be allowed after payment of first

instalment without surcharge of outstanding bill. Balance amount will be

paid in next four instalments along with current bills.

25 | P a g e

5. When the naked LT conductor of the village is fully changed into AB

cables as per site requirement and the meters of all the households have

been brought out, the power supply to the village will be increased from 15

hours to 18 hours.

6. For measuring the power supplied to the village the meters shall be

installed on all the points from which 11 KV lines goes into the village.

After allowing for the specified quantum of technical losses below 20%, if

the village pays bills to the extent of 90% of power supplied, their

electricity supply will be increased from 18 to 21 hours.

7. After the defaulting amount of the feeder remains less than 10%,

24 Hours supply will be provided.

8. Making villages aware of the problems and hearing their grievances.

9. In case a village does not fulfil the obligations cast upon them in terms of

helping installation of AB cables, replacement of meters and bringing them

outside the houses, eventually leading to reduction of losses, the

increased supply of power will be reversed back to the original level.

The activities which are carried out in the village to improve the quality of service

to the consumers with effect from the date of convening Panchayat:

1. Replacement of bare conductor with AB cable.

2. Replacement of defective/electro mechanical meters.

3. Shifting of meters outside the premises.

4. While replacement/relocation of meter as a onetime measure, the meter

would be replaced on the spot without further checking from the M&T Lab

5. Maintenance of DT’s.

6. Maintenance of LD system.

7. Bill dispute settlement on spot.

8. Release of new connection on spot.

9. Extension of load regularization on spot.

26 | P a g e

Decreasing Prices of Imported Coal and Crude Oil

That the power generation companies pass on the increase of cost of power

(produced due to increase in coal/fuel prices on monthly basis based on demand and

supply of coal) to the distribution companies which gets legitimately passed on to the

consumers.

SERCs of various States revises the tariffs for electricity periodically (every year

or once in every two to three years). The new tariff is set based on the cost of

production and distribution of electricity. But the prices of fuel or coal changes

throughout the year and the utilities have to manage these uncontrollable cost variations

by legitimately passing them to the consumers

The amount of FSA calculated is because of intermittent increase in the power

purchase cost. Further, based on the postulates of the HERC MYT regulations 2012,

any variations in the power purchase costs are to be passed on the consumers via Fuel

Surcharge Adjustment. Significant directions over the recovery of FSA charges from

the consumers vide HERC MYT Regulations 2012 are specified below: -

Recovery of FSA amount on Quarterly basis so as to ensure that FSA

accrued in a quarter is recovered in the following quarter without going

through the regulatory process.

The FSA up to 10% of the approved cost of power purchase for the

respective financial year is automatically passed through to the

consumers, on a quarterly basis by the Discoms.

FSA calculations only in respect of approved power purchase volume

including short term power purchase cost from all approved sources at

approved losses.

In case of negative FSA, the credit shall be given to the consumers by

setting off the minus figure against the positive figure of FSA being

charged from the consumers. In other words, credit of FSA shall be given

only against FSA being charged so that the base tariff determined by the

Commission remains unchanged.

27 | P a g e

Thus, on one side as the tariff to be charged from the consumers are fixed by the

Hon’ble Commission, any variation in the power purchase cost regarding

increase/decrease in fuel prices is taken care by the applicability of Fuel Surcharge

Adjustment based on power purchase for every quarter by the Discoms. Moreover, true

up of such FSA charges including their applicability and recovery thereof are also

submitted periodically to the Hon’ble Commission for prudence check and necessary

approval.

Moreover, the share of power generated from liquid/Gas based power plants is

very less as compared to the coal based power generation. Also, the effect of decrease

in international price of fuel on the average cost of generation is negligible.

Restructured Accelerated Power development and Reforms Programme

That the R-APDRP programme is for urban areas- towns and a city with

population of more than 30,000 (10,000 in case of special category states).The focus of

R-APDRP is on actual, demonstrable performance in terms of sustained loss reduction.

It is also submitted that the Hon’ble Commission vide its Order dated 29.05.2014 has

approved Rs 427 Crores for R-APDRP (Part-B). Moreover, the status report of the

same has been submitted to the Hon’ble Commission vide memo no. CH-3/XEN/DD-

I/273/Loose file dated 30.07.2015. Hence the objection raised is unacceptable.

Suggestion of the members of State Advisory Committee (SAC) members

That the Discoms have been endeavouring its best to bring down the line losses

and to liquidate the receivables. The details of the same have been discussed in details

above and same is not reiterated for the sake of brevity. It is also submitted that the

capital expenditure is incurred by the Discoms to strengthen power distribution system

in the state, so as to ensure more power with greater reliability to meet the increasing

demand. The power transmission and distribution systems have been planned to match

the increase in demand of the state in the near future. The Discoms have judiciously

planned the capital expenditure over the next three to four years, for which integrated

planning has already been initiated. The power transmission and distribution system are

also being strengthened accordingly. The utilities have plans to construct new sub-

28 | P a g e

stations of various levels and augment capacity of existing sub-stations in the next three

years, so as to match the capacity of the transmission system in accordance with the

increasing availability and demand of power in the state.

It is hereby submitted that Ministry of Power notified revised AT&C loss trajectory

for FY 2014-15 and FY 2015-16 vide the letter dated 11th August 2014. The Discoms in

the APR fillings for FY 2014-15 and ARR filings for FY 2015-16 has Projected the

Transmission and Distribution Loss for the FY 2014-15 and 2015-16 considering Jind

circle in DHBVN as 28.58% and 24.79% respectively based on the AT&C losses of

31.29% and 27.88% for the FY 2014-15 and FY 2015-16 considering Jind Circle in

UHBVN.

It is also submitted that the Discoms has already provided details of the source

wise power purchase quantum and actual rates per unit to the Hon’ble Commission as a

part of the APR filings. There has been no power procurement done from any un-

approved sources of power. It is pertinent to mention that during peak hour season, the

Haryana Power Purchase Cell has to purchase power at extra high rate to meet the

requirement of tube well consumers.

The power generation companies pass on the increase of cost of power

(produced due to increase in coal/fuel prices on monthly basis based on demand and

supply of coal) to the distribution companies which gets legitimately passed on to the

consumers.

Moreover, the power purchased is purely on the basis of the Merit Order dispatch

based upon the tariff decided by the Hon’ble Commission. Therefore, the Hon’ble

Commission is requested to take the judicious call upon the same.

Also, the Energy demand varies during the day, between the day and night, and

across the months during different seasons. The petitioners submit that the power

procurement projections made by the utilities is based on the peak load requirement

and all the future power purchase agreements have been made based on the projected

demand within the state periphery.

Observation of the Commission is questionable

29 | P a g e

That the Discoms have been submitting the Distribution loss data as part of the

audited account of the Discoms to the Commission and also the initiative or endeavour

made by the Discoms to reduce the losses. The same has been discussed in details

and has not been reiterated for the sake of brevity.

Non Compliance of directives of Commission

It is hereby submitted that the Discoms have been making full efforts to

implement the directives given by the Commission and the compliance report for the

same has been submitted in the petition for Truing-up of the ARR for the FY 2013-14

Annual (Mid-year) Performance Review for the FY 2014-15 and Aggregate Revenue

Requirements / Tariffs of UHBVNL and DHBVNL for their Distribution and Retail Supply

Business under MYT framework for the FY 2015-16 (now withdrawn) in accordance with

the provisions of Haryana Electricity Regulatory Commission (Terms and Conditions for

Determination of Tariff for Generation Transmission, Wheeling and Distribution & Retail

Supply under Multi Year Tariff Framework) Regulations, 2012.

a) Defective Meters

That UHBVN has issued the Sales Circular No. U-15/2014 in this

regards and directed to all SEs/OP to ensure the compliance of the

directions. Above letter has been sent to Hon’ble Commission vide memo

No. Ch-11/GM/RA/N/F-173 dated 22.06.2015.

b) Pending Applications

That in Order to reduce the number of pending application and in

compliance to the Hon’ble HERC Order on ARR dated 29.05.2014, the

matter regarding release of connection has been considered and decided

to introduce the Tatkal Scheme in the first phase, vide Sales Circular No.

U- 37/2014 dated 03.09.2014. Moreover, it has been decided and directed

to all SE/OP vide the Sales Circular No. U-16/2015 that all the tubewell

connection to all the applicants to whom demand notice have been issued

till 31.12.2012 i.e. 4650 Nos. shall be released. Also, tube-well

connections to all the farmers who deposited the amount under self

financing scheme till 03.06.2015 shall also be released after taking an

30 | P a g e

undertaking. In addition, it has been decided and directed to SE/OP vide

the Sales Circular No. U-29/2015 that temporary connection shall be given

to residents of unauthorized Colonies subject to the mentioned Conditions.

Further, in compliance to the Hon’ble HERC Order on ARR dated

07.05.2015, the Discoms has directed all SEs/OP to release all pending

connections /extension of load within three months from the date of tariff

Order i.e. 07.05.2015.

Above letter has been sent to HERC vide memo No. Ch-

05/GM/RA/N/F-173 dated 10.06.2015.

c) Pending Receivables

The matter has been discussed above in detail. Therefore, for the

sake of brevity the same has not been reiterated again.

Feeder with High Losses

That the Commission vide its Order dated 07.05.2015 has directed the licensees

to bring down the number of rural feeders with above 50% losses by 50% at the end of

the FY 2015-16 and no urban feeder with above 25% line losses shall exist by the next

ARR/APR filing.

It is hereby submitted that the various initiatives taken by the Discoms to reduce

the losses have been discussed in detail in previous section and the same has not been

repeated for the sake of brevity. However, the Discoms have also directed all SEs (OP)

to take necessary action on feeder to reduce the losses as per the direction given by the

Hon’ble Commission. A Copy of same has been submitted with the Hon’ble

Commission vide the Memo No: - Ch-12/GM/RA/N/F-173 dated 25.06.2015.

AT&C losses

That the various initiatives taken by the Discoms to reduce the losses have been

discussed in detail in previous section and the same has not been reiterated for the

sake of brevity.

True-Up of ARR of FY 2013-14(Variation in controllable Items)

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That the Hon’ble Commission has trued-up the ARR of FY 2013-14 based upon

the Audited account of the FY 2013-14 and in accordance with the provisions of

Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of

Tariff for Generation Transmission, Wheeling and Distribution & Retail Supply under

Multi Year Tariff Framework) Regulations, 2012. However, the Discoms have filed the

review petition (now withdrawn) against the Tariff Order notified by the Hon’ble

Commission on 07.05.2015.

Directions to HPGCL

That the matter is corresponding to HPGCL and hence the Discoms do not have

any comments to offer on the same. On this issue HPGCL vide Memo No.

909/HPGCL/Reg-200 dated 8.09.2015 and letter dated 14.10.2015 submitted that there

is a reduction in the landed cost of imported coal and oil in the range of about 10% to

12% in the FY 2014-15 and the FY 2015-16, however, its impact on the Fuel Price

Adjustment (FPA) of HPGCL is not being visualized due to meager quantity of imported

coal being utilized at HPGCL’s power plants, constant decline in the GCV of domestic

coal, comparatively costly coal linkage assigned to HPGCL, increase in the landed cost

of domestic coal etc. Additionally, it has been submitted that the share of HPGCL power

in the power purchase cost of the Haryana Discoms in the FY 2014-15 was only about

28% of their total power purchase. As such the magnitude of the FPA of HPGCL in the

FSA of the Discoms is very less. Hence, increase in FSA of the Discoms is not directly

attributed to HPGCL alone. It was further submitted that HPGCL has achieved

tremendous improvement in performance with regard to Station Heat Rate, Auxiliary

Energy Consumption and Specific Oil Consumption.

Power Purchase Cost and Allowed Distribution Loss

That Discoms has already provided details of the source wise power purchase

quantum and actual rates per unit to the Hon’ble Commission as a part of the APR

filings. There has been no power procurement done from any un-approved sources of

power. It is pertinent to mention that during peak hour season, the Haryana Power

Purchase Centre has to purchase power at extra high rate to meet the requirement of

tube-well consumers. Also, Discoms in Order to minimize the average per unit power

32 | P a g e

purchase cost strictly follow Merit Order dispatch. However, Ministry of Power notified

revised AT&C loss trajectory for the FY 2014-15 and FY 2015-16 vide the letter dated

11th August 2014. The Discoms in the APR fillings for the FY 2014-15 and ARR filings

for the FY 2015-16 has Projected the Transmission and Distribution Loss for the FY

2014-15 and 2015-16 considering Jind circle in DHBVN as 28.58% and 24.79%

respectively based on the AT&C losses of 31.29% and 27.88% for the FY 2014-15 and

FY 2015-16 considering Jind Circle in UHBVN.

Implementation of “Patiala Model” to bring down the losses of Discoms

That the Haryana Power Sector comprises four wholly State-owned Corporations

viz HPGCL, HVPNL, UHBVNL and DHBVNL which after unbundling of the HSEB in

1998 are responsible for power generation, transmission, distribution and trading in the

State. These utilities and the HERC work under the administrative control of the

Department of Power.

The State power sector was restructured on August 14, 1998. The Haryana State

Electricity Board (HSEB) was reorganized initially into two State-owned Corporations

namely Haryana Vidyut Prasaran Discoms Ltd. (HVPN) responsible for operation and

maintenance of State’s owned Power Generating Stations. HVPNL was entrusted the

power transmission and distribution functions. Simultaneously, an independent

regulatory body i.e. Haryana Electricity Regulatory Commission (HERC), was

constituted to aid and advise the State Govt. on the development of the power sector, to

regulate the power utilities and take appropriate measures to balance the interest of

various stake-holders in the power sector, namely electricity consumers, power entities

and generation companies etc.

Uttar Haryana Bijli Vitran Discoms Limited (UHBVNL), a Government of Haryana

Undertaking undertakes the Power Distribution and Retail Supply Business in the

Northern Parts of Haryana. UHBVNL is registered under the Companies Act-1956 and

has commenced its operations in July, 1999. Thus the power distribution companies are

autonomous in terms of operational efficiencies and performances, however, the

operations are dependent on each other in the entire power sector value chain

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Moreover, the Discoms has been time and again notifying incentive and penalty

schemes in Order to ensure optimal performance by the Discoms officials.

An example to the same is the Sales Circular No.U-33/2013 dated 24.07.2013

notified by the Uttar Discoms in the matter of recovery of outstanding arrears from

Permanent Disconnected Consumers vide which it was decided to launch/introduce an

incentive scheme for the purpose so that the recovery of arrears from permanent

disconnected consumers is undertaken.

Tariff Slabs

That the Commission notified the tariff Order for the FY 2015-16 on 07.05.2015.

As per the notified tariff Order, the cost of supply for domestic consumers is

Rs 7.16/kWh and the cumulative shortfall at the tariff notified vide the Order dated

07.05.2015 is estimated to be Rs 2229.4 Crores. Therefore, in Order to garner Rs 1146

Crores out of the total gap, the Hon’ble Commission has increased the DS tariff as well

as changed the DS tariff slab structure in compliance of the National Tariff Policy. As

has been notified in the aforesaid Order, the Hon’ble Commission has increased the DS

slab 0-40 Units per month to 0-50 Units per month and has left the tariff unchanged at

Rs. 2.70/kWh in Order to protect the interest of the small and marginal DS consumers.

Tariff Order of Punjab

That State of Punjab and Haryana have different Consumer mix, Power

Purchase cost and consumption pattern. Therefore, it won’t be accurate to compare the

tariff increase allowed for the two States. Moreover, the Discoms of Haryana are under

huge financial distress. The following reasons that have led to the financial distress of

the Discoms are given hereunder:-

Regulatory Reasons

No tariff increase for nine years from 2001-02 to 2009-10.

Delay in approval of FSA coupled with staggering of recovery of FSA over 3-4

years.

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Significant disallowance of costs by HERC in the ARR Orders. (~only 33% of

Interest & Finance charges allowed by Commission during 2011-12 to 2013-

14)

Deficit in the revenue requirement (ARR) was bridged through creation of

Regulatory Assets/acknowledgement of uncovered revenue gap rather than

tariff increase. The borrowings against this regulatory asset/gap further

increased the debt servicing cost.

Inadequate RE subsidy due to disallowance of Agricultural sales

Other Reasons

Due to poor financial health of Discoms banks stopped funding in June 2011

Significant increase in employee cost attributable to 6th Pay Commission.

Massive receivables in books of accounts due to socio-political factor

amounting to over Rs. 4900 Crs as on 31 Mar 2012 (UHBVN & DHBVN).

Accordingly, both Discoms (UHBVN and DHBVN) are undergoing financial

restructuring under FRP notified on 05th October 2012 by Ministry of Power,

Government of India.

Therefore, in compliance to the provision of the MYT Regulations, 2012 and with

the power conferred under the Section 62 of the Act, the Hon’ble Commission in the

Tariff Order dated 07.05.2015 has increased the tariff on account of increase in Power

Purchase Cost, O&M cost, IFC and other costs in Order to garner the revenue gap.

8.0 Reply filed by DHBVNL in Case no HERC/RA-11

DHBVNL vide their memo no. Ch-5/SE/RA-532 dated 05.10.2015 filed their

detailed reply to the issues raised by DMRC in its review petition. The relevant reply, in

brief, is presented below:-

That the review petition filed by DMRC is time barred and hence the same is

liable to be rejected.

On the issue of treating DMRC at par with the Railways and highest increase in

tariff, DHBVNL has replied that tariff determination / classification is in the purview of the

35 | P a g e

Commission. Hence, the tariff determined by the Commission vide its Order dated

07.05.2015 for electricity supply to DMRC is being levied by DHBVNL.

On the issue of actual / maximum demand, DHBVNL has replied that the penalty

is being imposed on the over drawl of power to manage load on the distribution /

transmission system. During such over drawls there is a load strain on the transmission

/ distribution system and the Discoms have to manage the load of the system which

results in extra cost to the Discoms. Further, it has been submitted that such over

drawls by the consumer result in increased wear and tear to the system translating into

higher non-routine/un-planned R&M expenses incurred by the Discoms. Additionally, it

has been submitted that in the event of overdrawl the Discoms have to bear additional

expenses over any deviation from the schedule of power drawls that are levied by the

grid operators in Order to maintain system stability. Hence, the penalty imposed on

such significant over drawls by DMRC is justified.

9.0 Public Hearing

In Order to afford an opportunity to the parties, including general

public/stakeholders, the Commission held a public hearing in the matter on 07.10.2015

as per schedule of hearing notified in the Newspapers as well as posted on the

Commission’s website under the heading “Schedule of Hearings”. All parties were

present. The Commission heard the petitioners i.e. Shri Sampat Singh and DMRC at

length. The Commission also afforded an opportunity to the consumers / associations

who were present in the hearing to make oral submissions.

At the outset the Commission would like to make it clear that the public

proceedings before the Commission in general and in the matter of determination of

electricity tariff including its review has universal ramification on the electricity

consumers of the entire State. Hence, given its importance as well as need to ensure

transparency in the proceedings as well as to address the concerns of the large number

of electricity consumers present in such proceedings, it is highly desirable that the

Managing Directors of the Discoms are present in the public hearings in such matters.

The schedule of public hearings are notified by the Commission well in advance, hence

attending the public hearing should take precedence over any other meetings that may

36 | P a g e

require presence of the Managing Directors. The Commission has taken a very serious

note of the fact that the Managing Director of DHBVNL preferred not to be present in the

public hearing and also did not inform the Commission regarding this.

The Commission has carefully taken note of the grievances including

inefficiencies of the Discoms raised by various electricity consumers and would like to

assure them that this Commission is very closely monitoring the operating performance

as well as various expenditures of the Discoms and is taking actions accordingly. A

case in point is because of the certain inefficiencies and failure of the Discoms to

achieve the benchmarks, the Commission has not allowed any Return on Equity (ROE)

to the Discoms. Further, interest on working capital loan was allowed to the Discoms on

normative basis. Hence, interest cost on excessive working capital borrowings were

disallowed by the Commission. Additionally, in Order to rein in expenses of the Discoms

the Commission in its Order dated 7.05.2015 has directed them to review the expensive

power purchase agreements, timely recover the outstanding receivables including those

from the Government Departments, time bound replacements of the defective meters,

time bound release of pending connections/load, intimation / bill through email and

SMS, timely payment of interest on ACD, e-tendering, inventory management etc.

Additionally, the Commission, in Order to allay the apprehensions of the Consumers

regarding high employees cost would like to intimate that the Commission in the year

2013 and on 17.01.2014 approved certain need based recruitments by the power

utilities, hence, any cost of additional recruitment towards non – technical / technical

posts beyond 17.01.2014 shall not be allowed to be passed on to the consumers

through electricity tariff unless the same is done with prior approval of the Commission.

In addition to the above, the Commission observes that almost all the interveners

are aggrieved by the FSA (including for the current as well as past few years) being

levied by the Discoms. The Commission has taken note of the financial hardship being

faced by the consumers. However, as the issue is neither germane to the present

proceedings nor the same, as per the law / statutes / regulations in vogue, falls in the

scope of a review petition, the Commission, after scrutinizing the details of the FSA(s)

being levied/ FSA arrears already collected shall consider separately the possibility of

providing relief, if any to the electricity consumers of the State while at the same time

37 | P a g e

keeping in mind the commercial viability of the financially distressed Discoms as the

cost of power procured by them from various power generating companies are beyond

their control. Further, the Commission observes that most of the consumers have

pointed out that the cost of fuel (coal/oil) has declined. It needs to be noted that the

present FSA that is being recovered is based on the difference in the normative cost of

power allowed by the Commission and the actual cost of power incurred by the

Discoms. Further, no additional transmission or distribution losses over and above that

approved by the Commission in its ARRs / tariff Orders are being passed on to the

electricity consumers.

Having observed as above, the Commission shall proceed to examine, on merit,

the review petitions preferred against the HERC Order dated 07.05.2015.

In the hearing held on 07.10.2015, the Petitioner argued at length in support of

his contention that the Commission has erroneously introduced the slabs in the DS

tariff. Resultantly, the cost of marginal unit consumed has become excessively high. He

also disputed the claim of the Commission as well as the un-identified spokesperson

regarding telescopic tariff as well as marginal increase in tariffs. He mostly reiterated the

illustrations regarding this as per his written submissions, hence the same, for the sake

of brevity is not being reproduced here. Further, he vehemently assailed the

unprecedented increase in MMC charges on small DS consumers.

Taking his arguments forward the Petitioner submitted that there are huge

outstanding amount from the consumers and the Discoms have failed to collect the

same and instead sought tariff hike which was allowed by the Commission. He dwelt at

length on the failure of the Discoms to reduce distribution losses including theft of power

by the unscrupulous consumers including with connivance of the Discoms staff and the

fact that such losses are being loaded on to the honest and paying consumers by way

of a tariff hike. He also suggested that the Haryana Discoms should also introduce

‘Patiala Model’. The Petitioner also submitted the hefty increase in the FSA over and

above the tariff(s) thereby making the cost of power un-affordable even for Industrial /

commercial consumers. This, in his view, may force such consumers to relocate to

some other States and discourage setting up of Industry / commercial enterprise in

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Haryana thereby adversely impacting the employment / earnings in Haryana. Shri Singh

further argued that despite over a decade of power sector reforms in Haryana including

un-bundling and corporatization as well as the Financial Restructuring Programme

(FRP) the accumulated losses as well as the borrowings of the Discoms have increased

phenomenally. Additionally, he assailed the true – up of the ARR for the FY 2013-14

allowed by the Commission amounting to Rs. 1277.42 Crore and prayed that the same

may be deducted and tariffs be reduced accordingly.

In addition to the above, the Petitioner brought to the notice of the Commission

that the Orders/directives issued by this Commission are not being complied with by the

Discoms. Hence, the status of the directives issued by the Commission vis-à-vis its

compliance be made available online. Similar online availability of information was

sought regarding feeder losses, defaulting amount (including name of the defaulters) as

well as action taken against the erring officers / staff of the Discoms.

In the end he prayed that the tariff increase (including MMC) be rolled back and

running telescopic slab may be reintroduced in the DS category.

Shri Ashwani Kumar Duhan, also expressed that the Discoms were not obeying

the directives being issued by the Commission from time to time. He requested that if

they do not obey the directions, then they may be penalized as per powers vested in the

Commission under Section 142 of the Electricity Act, 2003. He also endorsed the views

of petitioner Sh. Sampat Singh. Sh. Wazir Singh Kohar also requested to take

appropriate action against the Discoms for not complying with the Orders/directives of

the Commission. He also requested that the tariff for domestic supply may be made

telescopic. Other consumers/associations, as detailed under Para 6, also requested that

the DS category tariff may be made telescopic upto 800 Units and that increase in FSA

should also be withdrawn. They also stated that the Discoms were not performing their

defined duties resulting into high line losses and inefficiency and requested the

Commission that they may be directed to either to show improvement or face action

under sections 142 and 146 of the Electricity Act, 2003.

39 | P a g e

Shri Sharat Sharma, Director (Operation) DMRC as well as the other objectors

present in the hearing mostly reiterated their written submissions already mentioned in

the present Order. Hence, for the sake of brevity the same are not being re-produced

here.

Per Contra Shri Nitin Yadav, Managing Director, UHBVNL along with Shri Varun

Pathak, Advocate, appearing for the Respondents Discoms argued as under:-

Shri Nitin Yadav, Managing Director UHBVNL argued that the issues raised by

the Petitioners as well as the other stakeholders needs to be seen in the right

perspective. He pointed out that kVAh billing has been widely accepted as a self

regulatory mechanism to control and rein in the reactive load and thereby optimize the

flow of active load. In case the reactive load is not adequately compensated by a

consumer by installing appropriate capacitor, he is putting avoidable burden on the

distribution system of the Discoms and consequential cost thereto. Hence, the resulting

low power factor will manifest in higher electricity bills. However, in case a consumer

adequately compensates for the reactive energy, in the present dispensation i.e. kVAh

based billing, his power factor will improve and his electricity bills would decrease to that

extent. Therefore, the kVAh based billing has an inbuilt incentive/penalty mechanism

and has been rightly introduced by the Commission. This, he argued, is also true for

DMRC i.e. in case (as claimed by the DMRC) that their power factor is Unity (or near to

unity) then the kVAh and kWh readings would be the same and the benefit of lower

kVAh tariff would follow. He further argued that introduction of kVAh based tariff may not

be seen as a ‘money making’ proposition but the same needs to be tested on the anvil

of integrity and reliability of the distribution system as a whole. Additionally, he

submitted that installing Capacitors does not take much time and the same can be done

by the consumers. The Discoms are also installing Capacitors of adequate capacity on

all its DTs. He prayed that the Commission, giving the advantages of kVAh based tariff,

for both the Consumers as well as the Discoms, should extend it to all such consumer

categories wherever feasible. Shri Nitin Yadav argued at length that any value added

service including billing applications require time and investments. The Discoms are

working towards rolling out a robust / standardized billing application which can be

accessed by all the consumers. The rollout has already been done in the towns covered

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under RAPDRP. On the issue of excessive loans and interest burden he submitted that

any excessive loans and interest cost thereto is being disallowed by the Commission

and hence the same is not passed on to the electricity consumers. On the issue of

unjustifiable fixed charge being recovered by the Discoms, Shri Nitin Yadav argued that

the assumption of Rs. 3.90/kWh power purchase cost in the FY 2015-16 is under-stated

and the actual cost on the basis of the invoices raised by the Generators supplying

power to Haryana is more than that, hence, the difference gets reflected in the FSA. He

further pointed out that the power demand in Haryana fluctuates widely i.e. between

about 4500 MW to 7500 MW. The Discoms, in Order to meet peak demand, has to

arrange power accordingly and since such arrangements are generally on ‘take or pay

basis’ even if entire contracted power is not drawn by the Discoms the fixed charges are

payable. The same analogy is applicable to the electricity consumers of the Discoms

and hence fixed charges / MMC is being levied as determined by the Commission. He

assured the stakeholders that the power being drawn by the Discoms are strictly based

on ‘merit Order/ stacking and no avoidable cost is being passed on to them. On the

issue of implementation of Standards of Performance and non- maintenance of proper

complaint record by the field staff of the Discoms , he submitted that a centralized

number with round the clock availability has been introduced and if the complaints are

not attended to then the complaint is escalated to next higher level. On the issue of

introduction of Time of Day tariff Shri Yadav submitted that survey is being undertaken

in Panipat and the Discoms are moving cautiously in view of the not so encouraging

experience in Punjab.

In addition to the above arguments of the Managing Director, UHBVNL, the

Learned Advocate Shri Varun Pathak, appearing for the Discoms, argued as under:-

At the outset, the Ld. Advocate argued that the present review petitions are not

maintainable and are time barred. Further, the Petitioners have also not sought

condonation of delay, hence, the review petitions are liable to be rejected on this ground

itself. He further argued that the Petitioners under the garb of seeking review are in fact

seeking indulgence of this Commission to sit in judgment on its own Order dated

7th May, 2015 which is not permissible under the law. Hence, he argued, that the issues

being agitated before this Commission are beyond the scope of review jurisdiction of

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this Commission as the same are in the nature of an appeal. Additionally, he argued

that in case the Discoms have charged any amount in excess of the tariff and charges

determined by the Commission then remedy is available to such consumer(s) under

Section 62(6) of the Electricity Act, 2003. Hence, such matters cannot form part of the

review jurisdiction of the State Commission. On the issue of efficiencies of the Discoms,

if any, the Ld. Advocate argued that the Discoms have been disallowed any return on

equity by the Commission.

The Ld. Advocate cited catena of case laws / judgments including that of the

Hon’ble APTEL upholding the validity of giving retrospective effect to the tariff Order(s)

issued by the State Electricity Regulatory Commissions (SERCs).

Contesting the arguments of the Petitioner Shri Sampat Singh that the FSA

mechanism is a unique phenomenon in Haryana, the Ld. Counsel cited example of

many States including Delhi, wherein the SERCs have allowed FSA to be recovered

from the electricity consumers of the respective States.

Further, the Discoms, vide affidavit dated 12th October, 2015, has submitted as

under:-

“The Commission vide the Order dated 07.05.2015 has notified the Tariff Order for

FY 2015-16. The Discoms against the impugned tariff Order filed the review petition

under section 94 of the Electricity Act 2003 and Regulation 78 (1) & (2) of Haryana

Electricity Regulatory Commission (Conduct of Business) Regulations, 2004 for review

of Haryana Electricity Regulatory Commission Tariff Order for True-up for the FY 2013-

14, Annual (mid-year) Performance Review for the FY 2014-15 and revised Aggregate

Revenue Requirement of UHBVNL & DHBVNL & distribution & retail supply tariff for the

FY 2015-16. During the Hearing on 07.10.2015 it was directed by the Hon’ble

Commission to make further submissions within a period of 7 days. Further, Pursuant to

the Public Hearing on 07.10.2015 on review of aforesaid tariff Order the Discoms

intends to make following Submissions.

a) Withdrawal of Review Petition: - The Discoms pursuant to the hearing on

07.10.2015 prays before the Hon’ble Commission to allow the petitioner to

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withdraw the Review Petition filed dated 01.07.2015 against the Order dated

07.05.2015 with a liberty to file to petition afresh subsequently.

b) The Discoms further prays for the following correction / amendment in the tariff

for the domestic category pursuant to the hearing on 07.10.2015 :

Revised Tariff (w.e.f. 01.04.2015) Proposed Tariff Slabs

Category - 1 ( Consumption Up to 100 Units per

month)

Category - 1 (Consumption < 800 units)

0-50 2.70 Telescopic 0-50 2.70 Telescopic

51-100 4.50 Telescopic 51-100 4.50 Telescopic

Category - 2 ( Consumption between 101 to 500

units per month )

101-250 5.00 Telescopic

0-250 5.00 Telescopic 251-500 6.05 Telescopic

501-800 6.75 Telescopic

Category - 2 (Consumption > 800 units)

251-500 6.05 Telescopic >800 6.75 Non

Telescopic

Category - 3 ( Consumption Above 500 units per

month )

> 500 6.75 Non Telescopic

The above correction in tariff would result in a revenue reduction of about Rs.

182 cr. as per the calculations of the Discoms. The Discoms propose to meet this

shortfall through following tariff and cost reduction measures:

1. KVAh Billing of PWW, MITC, Lift Irrigation and Street light categories: -The

petitioners submits that the Hon’ble Commission notified tariff schedule of

PWW, MITC, Lift Irrigation and Street light categories vide the Tariff Order

dated 07.05.2015. The Discoms had proposed KVAh billing in place of KWh

Billing for computation of energy charges as the running load of these

categories is Inductive in nature. KVAh metering is a concept mooted to

replace the conventional kWh metering. As per the current Tariff Structure the

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Tariff is fixed for the Active Energy (KWH). The Discoms has to absorb the

loss in the supply system due to the Additional amount of current drawn due

to the lower Power Factor. This results in increase in Line losses and reduced

capacity of the network to cater the Active Load. To counter this Regulatory

measures are to be initiated upon the consumers who do not maintain the

power Factor at specified value. If KVAh Metering is employed, automatically

it becomes the responsibility of the consumer to maintain the Power Factor,

else the Consumers who do not maintain the Power Factor have to

automatically pay themselves for the additional burden due to poor power

factor of the load maintained by them. As such this additional burden is totally

borne by the Consumers who maintain lower Power Factor. Some of the

Benefits of KVAh Billing are mentioned herewith:-

It will incentivize the consumers to improve the power factor by way of

installation of capacitors at the load point itself, which would be the right

practice.

With the better power factor, the line loading shall be lower for the same

KW requirement leading to lower transmission as well as distribution losses.

The Prime Objective of the KVAh based billing is to encourage the consumers to

maintain near unity Power factor to achieve loss reduction. Therefore, the

Hon’ble Commission is requested to consider the above submission in this

regard and suitably amend the tariff schedule of the PWW, MITC, Lift Irrigation

and Street light categories.

It is estimated that KVAh Billing of PWW, MITC, Lift Irrigation and Street light

categories will also provide additional revenue.

2. O&M Cost reduction :

In addition to the above it is proposed to meet the shortfall through reduction in

the O&M cost by outsourcing of the O&M activity which would result in savings

on account of the following:

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a) Reduction in Equipment Failure rate such as Transformer damage etc.(Rs 67

Crore Approx)

b) Reduction in salaries due to outsourcing of O&M Activities and restructuring

of Discoms. In addition, the Discoms also propose to engage the ITI

certified/Poly technique Diploma holders as interns. (Rs 100 Crore Approx)

c) Reduction in cost on account of AMR/Spot Billing in both the Discoms.( Rs 60

Crore Approx).

The total saving in the cost on account of above intervention comes to

approximately Rs 227 Cr. Whereas, the Discoms have estimated a net impact of

Rs 182 Cr due to correction in tariff.

d) Revision in Levy of FSA in Domestic Category: - It is hereby Submitted that

Hon’ble Commission vide Order dated 19.03.2015 has determined the rate of

recovery of outstanding FSAs (up to FSA of FY 2013-2014) till such time the total

amount as determined is recovered. Pursuant to the aforesaid Order the

Discoms Issued Sales Circular no 18/2015 dated 12.06.2015 (UHBVN). The

Subsequent FSA levied after this Order The Discoms Proposes to revise the

slab wise recovery of FSA Ordered vide circular no. 18 of 2015 as per the table

below:

Category

Circular No u 18/2015 dated 12.06.2015

Proposed FSA recovery

Approved FSA recovery as per Order

dated 19.03.2015

Progressive FSA

levied as per the

MYT Order as on

01.04.2015

Total FSA New

Proposed Slabs

Proposed FSA recover

y

Progressive FSA levied as per the MYT Order as on

01.04.2015

Total FSA

Domestic Supply Paisa/KWH Paisa/kWH Paisa/KWH

Paisa/KWH

Paisa/KWH Paisa/kWH

0-40 77 37 114 0-50 77 37 114

41-250 106 37 143 51-100 106 37 143

251-500 115 37 152 101-250 106 37 143

501-800 127 37 164 251-500 106 37 143

Above 800 127 37 164 501-800 106 37 143

>800 127 37 164

The FSAs levied subsequently will be charged as being done currently.

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e) It is Hereby submitted that the introduction of fixed charges for certain consumer

categories is in line with the two-part tariff principle adopted by almost all the

State Electricity Regulatory Commissions (SERCs) across the country. A certain

amount of fixed charges has to be charged from consumers as a means of

recovering the investment already made by the Discoms assuming a certain

minimum demand. Especially for industrial consumers, distribution licensees

have to undertake significant investment in the attempt to ensure an adequate

system in place to cater to the collective demand of the industrial units, if need

be. Hence, fixed charges on the basis of connected load/contract demand are

legitimately essential.

Almost all State Electricity Regulatory Commissions (SERCs) across the country

have already made the progressive move to a two-part tariff. This is because

fixed charges are essential for allowing recovery of certain costs of fixed nature

which are borne by the licensee irrespective of the quantum of energy purchased

by end consumers.

The Hon’ble Commission vides the tariff Order dated 07.05.2015 determined the

tariff for the LT industries having load more than 20 KW. The relevant excerpt of

the Order has been given herewith:

“The Commission in pursuance of Hon’ble Appellate Tribunal for Electricity

decision, in its Order dated 07.12.2011 had decided that the fixed charges

shall be levied on the connected load rather than on sanctioned contract

demand as petitioned by LT industry consumers and 80% of the

connected load shall be considered for the purpose of levying fixed

charges. This relief granted has been retained in the present Order too.

However, where the MDI meters exists the tariff shall be accordingly

charged i.e. based on the recorded demand as per the ibid Order.

Additionally Rs. 185 / kW shall be levied as MMC in case in any billing

cycle there is no recorded demand.”

It is hereby submitted that the Hon’ble Commission has not specified the

minimum demand or minimum percentage of Contract demand to be considered

46 | P a g e

for levying of fixed charge in case of recorded demand more than zero in any

billing cycle for LT Industrial consumers having load more than 20KW and MDI

meter installed. As such, the two part tariff ensures that a consumer consuming

less energy (not fully utilizing the sanctioned demand) does not get undue

advantage by paying very less electricity charges as compared to another

consumer who is making full use of the contract demand and eventually pays

more energy charges, thus in effect cross subsidizing the first consumer.

Therefore it is requested before the Hon’ble Commission to provide clarification

on levying of fixed Charges or specify a minimum percentage of contract demand

for levying of fixed charges on LT industrial Consumers having load more than

20KW and MDI meter installed for making appropriate correction and appropriate

revision in tariff.

f) Inadvertent error regarding tariff of NDS category of consumers for FY 2014-15

notified in the APR tariff Order dated 7 May 2015: - It is submitted that the Hon’ble

Commission vide MYT tariff Order dated 29 May 2014, had notified the tariff for Non

Domestic category of consumers as given below:

Category of consumers Energy Charges (Paisa/kWh

or/KVAh)

Fixed Charge

MMC (Rs. per kW per month of the

connected load or part thereof)

Non Domestic

Up to 5 kW (LT) 585/kWh Nil Rs. 200 up to 5 kW and Rs. 185 above 5

kW up to 20 kW Above 5 kW and Up to 20 kW (LT) 610/kWh Nil

Above 20 kW up to 50 kW (LT) 650/kWh 150/kW Nil

Existing consumers above 50 kW up to 70 kW (LT)

675/kWh 160/kW Nil

Consumers above 50 kW (HT)

635/kWh or 572/KVAh in case consumer opts for KVAh based

billing

160/kW Nil

However, the Hon’ble Commission vide APR tariff Order dated 7th May 2015, had

notified the tariff for Non Domestic category of consumers along with giving details

of the tariff for FY 2014-15 as given below:

Sr. No.

Tariff for 2014-15 Tariff for 2015-16

Category of consumers

Energy Charges (Paisa /

Fixed Charge (Rs. per kW per

month of the

MMC (Rs. per kW per month of

Category of consumers

Energy Charges (Paisa /

Fixed Charge (Rs. per kW

per month of

MMC (Rs. per kW per month of

47 | P a g e

kWh or/ KVAh)

connected load / per kVA of sanctioned

contract demand (in

case supply is on HT) or as

indicated

the connected load or part

thereof)

kWh or/ KVAh)

the connected load / per kVA of sanctioned

contract demand (in

case supply is on HT) or as

indicated

the connected load or part

thereof)

Non Domestic Non Domestic

Up to 5 kW

(LT) 585/kWh Nil

Rs. 200 up to 5 kW and

Rs. 185 above 5 kW up to 20 kW

Up to 5 kW (LT)

605/kWh Nil Rs. 250/kW up to 5 kW

and Rs. 225/kW

above 5 kW & up to 20

kW

Above 5 kW and Up to 20

kW (LT) 610/kWh Nil

Above 5 kW and Up to 20

kW (LT) 675/kWh Nil

Above 20 kW up to 50 kW

(LT) 600/kWh 150/kW Nil

Above 20 kW up to 50 kW

(LT) 615/KVAh 170/kW Nil

Existing consumers

above 50 kW up to 70 kW

(LT)

675/kWh 160/kW Nil

Existing consumers

above 50 kW up to 70 kW

(LT)

650/KVAh 170/kW Nil

Consumers

above 50 kW (HT)

635/kWh or 571/KVAh

in case consumer opts for KVAh based billing

160/kW Nil Consumers

above 50 kW (HT)

630/KVAh 170/kW Nil

Hence it may be seen that while the approved tariff for the NDS sub categories

whose connected load falls between the range of 20 KW to 50 KW (LT), though

the energy charges approved for FY 2014-15 vide MYT tariff Order dated

29.5.2014 were 650 paisa per KWh, the Hon’ble Commission while reiterating the

energy charges approved for FY 2014-15 vide APR tariff Order dated 7.5.2015 for

the said sub category has inadvertently mentioned as 600 paisa per KWh.

Similarly, it may be seen that while the approved tariff for the NDS sub categories

whose connected load falls above 50 KW (HT), though the energy charges

approved for FY 2014-15 vide MYT tariff Order dated 29.5.2014 were 572

paisa/KVAh in case consumer opts for KVAh based billing, the Hon’ble

Commission while reiterating the energy charges approved for FY 2014-15 vide

APR tariff Order dated 7.5.2015 for the said sub category has inadvertently

mentioned as 571 paisa/KVAh in case consumer opts for KVAh based billing.

Therefore, it is requested before the Hon’ble Commission to provide the

Clarification on the same

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g) It is further submitted that about 90% of directives have already been complied and

rest of the directives shall be complied with shortly.

h) Prayer

The Petitioner prays before the Hon’ble Commission to consider the prayer of the

petitioner made as above and pass suitable Order.

10. Commission’s Analysis and Order

The Commission, while passing the present Order, has considered the petitions

filed by Shri Sampat Singh, DMRC as well as other stakeholders / consumers and the

reply filed by the Discoms as well as the oral arguments of the parties in the hearing

held on 7.10.2015. Further, the Commission, in the hearing, had allowed seven days

time to any stakeholder / consumers who may like to submit their objections /

suggestions. Hence, all such objections / comments filed by the stakeholders have been

considered by the Commission while passing the present Order.

Before further proceeding in the matter, the Commission, in larger public interest,

condones the delay in filing the present review petitions, and proceeds to examine the

case on merit.

The Commission has further examined the issue raised by the Ld. Counsel Shri

Varun Pathak appearing for the Discoms that the issues raised by the Petitioners do not

fall in the review jurisdiction of the Commission and hence the petition(s) are liable to be

rejected on this ground itself. Per Contra the Petitioners Shri Sampat Singh as well as

the Representative of DMRC argued that in the impugned Order of the Commission

there exists error apparent on the face of record and hence the same falls squarely in

the ambit of review jurisdiction of this Commission.

In Order to resolve the scope of review jurisdiction, the Commission has

examined the provision of Regulation 78(2) of the HERC (Conduct of Business)

Regulations, 2004 including its subsequent amendments, under which the Commission

can exercise review jurisdiction. The relevant regulation is reproduced below:-

78 (2) “REVIEW OF THE DECISIONS, DIRECTIONS, AND ORDERS:

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The Commission may review its Orders or decisions if:-

(a) There exists an error apparent on the face of the record, or

(b) Any new and important matter of evidence was discovered which after

the exercise of due diligence, was not within the knowledge of or could

not be produced by the party concerned at the time when the Order or

decision was made, or

(c) For any other sufficient reasons”.

The Commission has also perused the judgment of Hon’ble Delhi High Court in

Aizaz Alam Versus Union of India & Others (2006 (130) DLT 63: 2006(5) AD (Delhi)

297. The relevant extract from the aforesaid judgment is reproduced below:-

“We may also gainfully extract the following passage from the decision of the

Supreme Court in Meera Bhanja V. Nirmala Kumari Choudhury, where the Court,

while dealing with the scope of review, has observed:

The review proceedings are not by way of an appeal and have to be

strictly confined to the scope and ambit of Order 47, Rule 1, CPC. The

review petition has to be entertained on the ground of error apparent on

the face of record and not on any other ground. An error apparent on the

face of record must be such an error which must strike one on mere

looking at the record and would not require any long drawn process of

reasoning on points where there may conceivable be two opinions. The

limitation of powers of courts under Order 47 Rule 1, CPC is similar to the

jurisdiction available to the High Court while seeking review of the Orders

under Article 226.

Applying the above principles to the present review petition, there is no

gainsaying that the review of the Order passed by this Court cannot be

sought on the basis of what was never urged or argued before the Court.

The review must remain confined to finding out whether there is any

apparent error on the face of the record. As observed by the Supreme

Court in Lily Thomas and Ors.V Union of India & Ors., the power of review

can be used to correct a mistake but not to substitute one view for

another. That explains the reason why Krishna Iyer, j. described a prayer

for review as “asking for the moon” M/s Northern India Caterers (India)

Ltd. V. Lt. Governor of Delhi”.

50 | P a g e

Testing the present review petitions on the anvil of the aforesaid Regulations /

statutes, the Commission observes that issue of kVAh based tariff, introduction of slabs

in DS tariff, limited telescopic DS tariff, MMC and other issues such as FSA,

accumulated losses, defaulting amount, feeder losses etc. were examined at length by

the Commission while passing the impugned Order dated 7th May, 2015. Hence,

admittedly the first two conditions for review as mentioned above are not met by the

Petitioner and same cannot be re-opened at this stage. Further, it is a settled law that

the plea which was not set up or urged in the main petition for consideration, such a

plea having been made thereafter for the first time in review petition cannot be the

subject matter of consideration. As far as the review petition preferred by the DMRC is

concerned i.e. review sought on the plea of better load factor, better power factor etc.

were also well within the knowledge of the Commission, hence no new facts / figures

has been brought before the Commission that may merit a review.

Additionally, It is evident from the grounds of appeal and the language used

thereto, that the review petition rather than justifying the review sought on the basis of

any new / important matter of evidence or any other sufficient reasons is more in the

nature of assertion that certain facts and figures were not considered or not taken up by

the Commission in the right perspective. Consequently, in the considered view of the

Commission such plea i.e. issues on which the Commission has already deliberated

and passed Order and the same being re-submitted for favour of consideration cannot

also fall under the purview of section 78(2)(c) of HERC (Conduct of Business)

Regulations, 2004.

All most all the objectors raised the issue of non-compliance of the directives

issued by the Commission. The same has been examined by the Commission as

under:-

The Commission observes that various directives issued vide its Order dated

07.5.2015 on the True-up for the FY 2013-14 Annual (Mid Year) Performance Review

for the FY 2014-15, Revised Aggregate Revenue Requirement of UHBVNL & DHBVNL

& Distribution & Retail Supply Tariff for the FY 2015-16 and also the decisions given in

51 | P a g e

the Minutes of Meeting of State Advisory Committee, have not been fully implemented

by the Discoms. This has been viewed seriously by the Commission earlier also. The

observations of the Commission regarding some of the directives are as under:-

1. The directions of the Commission with regard to allowing 4% discount on energy

charges for the consumers who deposit advance payments as well as the rebate

of 25 paisa per unit to the consumers who installs roof top solar plant through

net-metering arrangement should be made a part of the tariff circulars to be

issued by the Discoms.

2. The electricity bills of all NDS/Commercial, LT industry and DS consumers

(having load above 20 kW), should be sent to their e-mail IDs and if such

consumers asks for a hard copy, the same may be supplied at a cost of Rs.10/-

only. SMS should also be sent to such consumers intimating the amount of their

bills and due date. The bills should also be made available on the website of

Discoms. Advertisement on local TV Channels be displayed intimating the

consumers regarding the Website of the Discoms where the consumer shall have

complete details of their billing /complaints etc. These instructions should be

implemented within three month from the date of issue of this Order by issuing

necessary directions to the consumers on their hard copy of the bills being

issued at present.

3. Payment and bills:

It would be mandatory for the consumers of NDS/LT/HT industry and DS above

20 kW to make on-line payments. If this is not possible for all such consumers, then

they should be directed to make payment through RTGS/NEFT OR through

authorized banks. For all other consumers this facility would be optional.

4. Release of pending connections:

The Commission observes that the Discoms have not implemented its directions

regarding filing of on-line applications for release of new connections,

52 | P a g e

extension/reduction of load, change of name, change of category etc. by making the

process simple and hassle free. The Discoms are again directed to comply with the

directions and sub division and category wise status of pendency of consumer

applications be displayed and updated regularly on its web portal.

5. Consumer complaints:

The Commission directed the Utilities to strengthen the complaints handling

mechanism by continuous monitoring and feedback from the consumers. The

Commission again directs that a mechanism may be developed and put in practice

to pay penalty to the affected consumers in case the Discoms fail to adhere to the

Standard of Performances. Compliance report be sent to the Commission.

6. E-tendering.

The Commission observes that its directives to publish NITs with short

description in newspapers to exercise economy have not been implemented. The

Commission further directs that the advertisements should be published in two/three

daily newspapers out of which two should be leading national dailies and should also

be uploaded on the website of the Discoms. If the above instructions are not

followed meticulously, the officer responsible for release of such advertisement shall

be held responsible.

7. Interest on Security Deposit:

The concerned SE/Op will be fully responsible for timely payment of interest on

the consumer’s security deposit & ACD and adjusting the same in the bills/additional

security demand and shall be liable for action under Section 142 of the Electricity

Act, 2003.

8. Details of Electricity Bills issued by the Discoms

The Commission has observed as also pointed out by the consumers in the public

hearing, that the Discoms did not provide the details of the arrears/sundry charges

charged to the consumers in the electricity bills due to which there is huge resentment

53 | P a g e

among the public. The Commission directs the Discoms to provide the details (as

provided in the FOR bill format) of the arrears in the electricity bills of the consumers.

9. Out Sourcing of Services:

Vide its Order dated 29th May,2014 and 7.5.2015 the Commission had expressed

its concern regarding high and ever increasing employees cost of the Utilities and

suggested outsourcing of works wherever possible. It was directed that all non-

technical posts lying vacant for the last three years in the Utilities were required to be

abolished except the posts where the contract/outsource staff have been engaged and

to apprise the Commission. Utilities were directed to provide information to the

Commission within thirty days but only incomplete report has been received till today.

Hence, status of compliance on this issue as per the Orders dated 29th May, 2014 and

07.5.2015 may be provided without any further loss of time. If after 29th May, 2014

anyone has been appointed without the prior approval of the State Government as well

as the Commission, the DDO/officer concerned shall be held responsible for this lapse.

The Commission has also carefully considered the review sought on the issue of

giving retrospective effect to the tariff Order dated 07.05.2015 as well as the arguments

and case laws occupying the field regarding the same. On this issue the Commission

observes that the Hon’ble APTEL in its judgement dated 8th February, 2011 in Appeal

No. 164 of 2010 has dealt with this issue at length. The relevant extract from the said

judgement is reproduced below:-

“22. The question of retrospectivity came up for consideration before The

Supreme Court in the Kannodia Chemicals & Anr. V/s State of UP & Ors.

Reported in (1992) 2 SCC 124. While upholding the retrospectivity of tariff Order

the Hon’ble Court observed as follows,

“A retrospective effect to the revision also seems to be clearly envisaged

by the section. One can easily conceive a weighty reason for saying so.

If the section were interpreted as conferring a power of revision only

prospectively, a consumer affected can easily frustrate the effect of the

provision by initiating proceedings seeking an injunction restraining the

Board and State from revising the rates, on one ground or other, and

54 | P a g e

thus getting the revision deferred indefinitely. Or, again, the revision of

rates, even if effected promptly by the Board and State, may prove

infructuous for one reason or another. Indeed, even in the present case,

the Board and State were fairly prompt in taking steps. Even in January

1984, they warned the appellant that they were proposing to revise the

rates and they did this too as early as in 1985. For reasons for which they

cannot be blamed this proved ineffective. They revised the rates again in

March 1988 and August 1991 and, till today, the validity of their action is

under challenge. In this State of affairs, it would be a very impractical

interpretation of the section to say that the revision of rates can only be

prospective”.

23. This Tribunal in a batch of appeals namely SEIL India, New Delhi V/s PSERC

reported in 2007 (APTEL) 931 considered the question of retrospectivity and

maintained it. In this decision also the tariff Order though made some time after

commencement of the financial year was made effective from 1.4.2005 and this

Tribunal upheld the Order of the Commission. It observed : the cost prudently

incurred is to be recovered, therefore, in the event of a tariff Order being delayed,

it can be made effective from the date tariff Order commences or by

annualisation of the tariff so that deficit is made good for the remaining part of the

year or it can be recovered after truing up exercise by loading it in the tariff of the

next year. Thus law empowers the Commission to specify the date from which

the tariff is to commence or the date when it will expire”.

In view of the above the Commission holds that there was no error or legal

infirmity in the Order dated 7th May, 2015 passed by this Commission which was made

effective retrospectively i.e. 1.04.2015. As per the ibid judgment of the Hon’ble APTEL

the other option available to the Commission was “annualisation of the tariff” i.e.

recovering the ARR approved for the FY 2015-16 over about eleven remaining months

from the date of the impugned Order which would have further increased the per unit

tariff impact on the electricity consumers. Hence, the Commission considered it

appropriate to give retrospective effect to the tariff Order which is in line with the well

settled law as also cited by the Ld. Advocate Shri Varun Pathak on this issue. As far as

the issue raised by the DMRC is concerned i.e. equating DMRC tariff with that of the

Railways (traction supply) the Commission observes that tariff for Railways and DMRC

have been brought at par in the FY 2015-16 for the same voltage of supply as the same

was also proposed by the Discoms in their tariff proposal. Hence, there is no error

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apparent on the face of record and no new facts / figures have been now placed before

this Commission that may merit review of the tariff determined for the DMRC.

The Commission, however, observes that because of billing of arrears due to

retrospective revision in tariff along with the current bill coupled with levy of fresh FSA

along with FSA arrears, the DS electricity consumers have been put to some financial

hardship. Thus the billing data that has now emerged i.e. after the implementation of the

tariff Order dated 7th May, 2015, shows that the cost of marginal unit consumed in case

of change over from one DS slab to the other is quite high and such dispensation may

actually push the DS consumers to manipulate the meter reading including in

connivance with the field staff of the Discoms. Thus in larger public interest the

Commission, keeping in view the fact that the DS tariff has universal impact on all

electricity consumers of the State and unlike Industrial / commercial category of

consumers the DS Consumers have limited or no ability to fully / partly pass on the

impact of the increase in tariff, has decided to re-visit the same.

In the above context, the Commission has considered the submissions of the

Discoms filed vide affidavit dated 12.10.2015 and observes as under:-

The Discoms have now proposed a running telescopic DS tariff from 0-800 units

per month of consumption. The Commission has considered the same and is of the

view that the Commission, in its tariff Order under review, had deliberately created a

separate slab for the marginal DS consumers’ i.e. 0-50 and 51-100. The highest tariff

charged from this category of consumers was pegged at Rs. 4.50/unit with benefit of the

tariff of Rs. 2.70/unit for the first 50 Units of consumption. Hence, the effective tariff for

such consumers was just about Rs. 3.60 / unit against the combined average CoS of

Rs. 7.16/kWh. Hence, at the effective rate such consumers are paying about 50% of the

CoS which is in line with the National Tariff Policy. The balance, after accounting for the

cross-subsidy available from a few other consumer categories, was met by way of

appropriately aligning the tariff for the DS consumers having a consumption of more

than 100 units per month. At this stage merging this slab, as proposed, with the other

DS slabs will not only disturb the revenue balance in the ARR approved by the

Commission, but will also defeat the purpose of having a separate tariff structure for the

56 | P a g e

marginal DS consumers. Hence, the Commission is not inclined to accept the

submissions of the Discoms on this issue. However, in the extreme genuine cases

subsisting at the margin of the society i.e. the DS consumers whose energy

consumption falls below the MMC threshold and hence are paying on MMC basis, the

Commission observes that MMC was increased from Rs. 100/month to Rs. 120/month

for connected load up to 2 kW, i.e. by 20%, in Order to cushion the ‘tariff shock’ for such

marginal DS consumers the same shall be reduced to Rs. 115/month for load up to

2 kW. Additionally, keeping in view the steep jump in tariff for the DS consumers having

consumption of more than 100 units / month (category II) the Commission, on equity

ground has extended the benefit of lower tariff i.e. Rs. 4.50/unit (who otherwise were not

getting the benefit of telescopic tariff) to the DS consumers having consumption of 0-

150 units per month. The Commission has further examined the proposal of the

Discoms to extend the DS slabs under telescopic mechanism up to 800 units’

consumption / month. The Commission, considering the ‘marginal cost’ impact

arguments of the stakeholders in general and the impact of additional one unit

consumption beyond 0-100 units (1st category) as also beyond 0-500 units extends the

DS slab as it existed prior to the Order dated 7th May, 2015 i.e. Domestic category II

slab shall be extended to consumption of 800 units / month with telescopic benefits.

Further, such a dispensation is being allowed by the Commission on the submissions of

the Discoms that any shortfall in revenue shall be made good through cost reduction

measures including reduction in O&M expenses.

The Commission has deliberated at length the issue regarding kVAh based

billing by the consumers of Panipat as well as the proposal of kVAh billing of consumer

categories i.e. PWW, MITC, Lift Irrigation and Street Light. The Commission observes

that the issue raised by the consumers of Panipat (LT Industry) appears to be a highly

localized issue wherein it appears that such consumers were caught unaware that the

tariff w.e.f 01.04.2015 will be changed from kWh to kVAh and hence in the absence of

capacitors of adequate capacity at their end resulting in low power factor, their electricity

bills got inflated. The Commission has considered the submissions and is of the view,

as also submitted by the Discoms in the hearing that installation of capacitors does not

take much time and the consumers who impose higher cost on the distribution system

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ought to pay accordingly. Further, the intention of the Commission was also clear in the

tariff Order for the FY 2014-15 wherein the option for kVAh based tariff for LT Industry

Consumers between 20 kW to 50 kW load was given. Hence, at the review stage the

Commission is not inclined to accept the arguments of the LT Industry Consumers from

Panipat. Further, the Commission has examined the proposal of the Discoms for kVAh

billing of consumer categories i.e. PWW, MITC, Lift Irrigation and Street Light and

observes that such dispensation (except in the case of Street Light) was also earlier

urged by the Discoms and the same was considered and rejected by the Commission

while passing the impugned Order. Hence, the same cannot be considered at the

review stage.

The Commission has further considered the submissions of the Discoms

regarding specifying the minimum demand or minimum percentage of contract demand

to be considered for levying fixed charge in case of recorded demand is zero or low in

the case of LT Industry consumers having load more than 20 KW and MDI meters are

installed and hence they end up paying no fixed charges. The Commission, given the

asymmetry between such consumers i.e. one who is fully utilizing his connected load

and pays fixed charges and the one who is under utilizing or not at all utilizing his

sanctioned connected load and hence not paying any fixed charges or nominal fixed

charges, now allows that such consumers shall pay fixed charges on 80% of their

connected load and not on their recorded demand as LT Industrial consumer at present

have no sanctioned contract demand.

The Commission has perused the proposal of the Discoms regarding revision of

levy of FSA in the DS category. As the same is not part of the impugned Order against

which review petitions have been preferred, the Commission shall examine the entire

gamut of FSAs being recovered by the Discoms and pass a separate Order as such

issues cannot be taken up in the present review proceedings. Further, the Discoms

have pointed out a few inadvertent errors in the impugned Order while reproducing the

tariff of NDS category of consumers for the FY 2014-15. The Commission has

considered the same and observes that tariff Order for the FY 2014-15 has been

revoked / amended by the Order dated 7th May, 2015, hence they are of little relevance

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now. Nonetheless for all intents and purposes the same should be read as per the

Commission’s Order dated 29th May, 2014 which was applicable for the FY 2014-15.

The Commission vide Order dated 07.05.2015 on True- up for the FY 2013-14,

Annual (Mid-Year) Performance Review for the FY 2014-15, revised Aggregate

Revenue Requirement of UHBVNL & DHBVNL & Distribution & Retail Supply Tariff for

the FY 2015-16 approved the tariff for domestic category for the FY 2015-16 as under: -

Domestic Supply Tariff (DS) Category of consumers

Energy Charges (Paisa / kWh or/ kVAh)

Fixed Charge (Rs. per kW per month of the connected load / per kVA of sanctioned contract demand (in case supply is on HT) or as indicated

MMC (Rs. per kW per month of the connected load or part thereof)

Category I: (Total consumption up to 100 units per month)

0 - 50 units per month

270/kWh Nil Rs. 120 up to 2 kW and Rs. 70 above 2 kW 51-100 450/kWh Nil

Category II: (Total consumption more than 100 units/month and up to 500 units/month)

0-250

500/kWh

Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW 251-500 605/kWh Nil

Category III: (Total consumption more than 500 units/month)

Above 500 units 675/kWh (flat rate no telescopic benefits)

Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW

As earlier stated, subsequent to the Order dated 07.05.2015, a large number of

complaints are being received by the Commission regarding excessive billing and

huge arrears levied by the Discoms on account of revision of tariff w.e.f. April 01,

2015. The Commission has decided to revise the tariff for the Domestic category

for the FY 2015-16 considering the submissions of the Petitioner and various other

stakeholders as also the request of Discoms and their assurance that any short fall

in the revenue shall be met by cost reduction including O&M expenses.

The commission has considered revising the tariff for domestic category in public

interest as follows:-

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Domestic Supply Tariff (DS)

Category of consumers (units per month)

Energy Charges (Paisa / kWh or/ kVAh)

Fixed Charge (Rs. per kW per month of the connected load / per kVA of sanctioned contract demand (in case supply is on HT) or as indicated

MMC (Rs. per kW per month of the connected load or part thereof)

Category I: (Total consumption up to 100 units per month)

0 - 50 270/kWh Nil Rs. 115 up to 2 kW and Rs. 70 above 2 kW 51-100 450/kWh Nil

Category II: (Total consumption more than 100 units/month and up to 800 units/month, telescopic tariff)

0-150 450/kWh Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW 151-250 500/kWh Nil

251-500 605/kWh Nil

501-800 675/kWh Nil

Category III: (Total consumption more than 800 units/month)

801 units and above

675/kWh (flat rate no telescopic benefits)

Nil Rs. 120 up to 2 kW and Rs.70 above 2 kW

The Commission has now revised the tariff for category of consumers having

consumption more than 100 units/ month and up to 800 units/month by giving them the

slab benefit as was available in this tariff Order for the FY 2014-15. The Commission is

of the considered view that a large number of lower middle class consumers fall under

this category and will therefore benefit from the revised DS tariff.

The Commission observes that the Discoms in their submissions have stated

that the MMC in consumption terms works out to only a few days of consumption both

for the DS as well as NDS consumers. Hence, the Commission is unable to appreciate

the reasons behind a large percentage of consumers being billed on MMC basis unless

significant numbers of meters of such consumers are tampered / bypassed / defective

etc. The Discoms must conduct load survey at the earliest as well as check the meters

of such consumers so that their connected loads are regularized and their meters are

accurately recording their consumption. However, to cushion the tariff shock to the

genuine very small DS consumers, subsisting at the margin of the society, the

Commission reduced MMC from Rs. 120/month to Rs.115/month for connected load up

to 2 kW for the marginal DS consumers as given above. The MMC for all other

Domestic category shall, however remain unchanged.

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Before parting with this Order, the Commission would like to record that in view

of categorical assurance of the Discoms that the impact of these changes in the

Domestic tariff/MMC on the ARR for the FY 20156-16 will be offset through efficiency

gain by way of cost reduction including O&M expenses, the uncovered revenue gap of

Rs. 667.11 crores for the FY 2015-16 as given in the Tariff Order dated 07.05.2015

shall remain unchanged.

This Order is signed, dated and issued by the Haryana Electricity Regulatory

Commission on 15th October, 2015.

Date: 15.10.2015 (M. S. Puri) (Jagjeet Singh) Place: Panchkula Member Chairman