Sri
K Sreerama Murthy, Member
Sri
Surinder Pal, Member
Dated:
O.P. No. 06 of 2005
The Co-operative
Electric Supply Society Limited …….
Applicant
1. The Co-operative Electric Supply
Society Limited, Siricilla has been exempted from the requirement of obtaining
a Distribution and Retail Supply Licence for the
supply area specified in the Licence granted to it
earlier under AP Electricity Reform Act, 1998 for one year, from
2. The
RESCO filed its ARR/ERC for the year 2005-06 on
3. The
Commission analyzed the RESCO’s filings and the
representations made to the Commission in the filings, and considered the
additional information submitted and clarifications provided by the RESCO. The
Commission’s decisions thereon are detailed herein.
4. REVENUE REQUIREMENT
(a)
CAPITAL BASE
(i) Original Cost
of Fixed Assets (OCFA) and Capital Works – in - progress (CWIP):
The RESCO has projected
Rs.3383.00 lakhs under OCFA and Rs.
473.00 lakhs under CWIP in the ARR / ERC filings for
the year 2005-06. Based on the audited accounts for the year 2003-04 and the
approved ARR for FY 2004-05 and
projections for the ensuing year submitted by the RESCO, the OCFA is arrived at
Rs.3443.00 lakhs, after adjustment of consumer contributions and grants from other sources
received by the RESCO.
(ii) Working Capital:
(a) Average
Cost of Stores
(b) Average Cash and Bank
Balances
The RESCO has projected Rs. 106.00 lakhs towards average
cost of stores and Rs. 183.00 lakhs
towards average cash and bank balance.
The Commission admits Rs.5.00 lakhs towards
average cost of stores representing one month’s average repairs and maintenance
expenses and Rs.71.92 lakhs towards average cash and
bank balance representing one month’s all other expenses excluding power
purchase cost.
(iii) Accumulated Depreciation:
The figure projected by
the RESCO (Rs. 2601.00 lakhs)
in the filing has been accepted without change, based on the latest audited
accounts for the year 2003-04 and the projections for the current year and the
ensuing year.
(iv) Other items:
The RESCO has projected
Rs.290.00 lakhs towards loans and Rs.287.00 lakhs for consumer security deposits and the Commission has
accepted the same.
(v) Summary
of Capital Base:
With the above changes,
the Net Capital Base of Rs.967.00 lakhs projected by
the RESCO comes down to Rs. 814.92 lakhs as per the details given in the following table:
Table- 1
Statement of capital base
(Rs. In Lakhs)
|
Sl. No. |
Positive elements |
RESCO |
APERC |
|
1 |
Original Cost of Fixed
Assets |
3383.00 |
3443.00 |
|
2 |
Capital Works in
Progress |
473.00 |
473.00 |
|
3 |
Working Capital |
|
|
|
|
a) Average Cost of
Stores |
106.00 |
5.00 |
|
|
b) Avg
Cash and Bank balance |
183.00 |
71.92 |
|
A |
Total of positive
elements of Capital Base |
4145.00 |
3992.92 |
|
|
Negative elements |
|
|
|
1 |
Accumulated
Depreciation |
2601.00 |
2601.00 |
|
2 |
Approved Loans |
290.00 |
290.00 |
|
3 |
Consumer Security
Deposit |
287.00 |
287.00 |
|
B |
Total of negative
elements of Capital Base |
3178.00 |
3178.00 |
|
|
Net Capital Base (A-B) |
967.00 |
814.92 |
(b) EXPENDITURE ITEMS
(i) Wages and Salaries:
The RESCO made a
projection of Rs.648.00 lakhs. Based on additional
information furnished, an amount of Rs.638.00 lakhs
is approved by the Commission under this Head.
(ii) Administration and General Expenses and
Repairs and Maintenance:
The RESCO made
projections of Rs.60.00 lakhs and Rs.
70.00 lakhs under these heads which are reduced to
Rs.50.00 lakhs and Rs.60.00 lakhs
respectively based on the audited accounts for the year 2003-04 and approved
ARR for FY 2004-05.
(iii) Other expenditure items :
The projections of the
RESCO under Depreciation (Rs.251.00 lakhs) and legal
charges (Rs. 2.00 lakhs)
have been allowed without any change. Approved Loan Interest (Rs.40.00 lakhs), Contribution to Employee funds (Rs.160.00 lakhs), Contribution to Contingencies Reserve (Rs. 8.00 lakhs), Interest on
Security Deposits (Rs. 6.00 lakhs)
and other expenses (Rs.60.00 lakhs) have been
adjusted to the actual calculated figures of Rs.36.00 lakhs,
Rs.100.00 lakhs, Rs.8.61 lakhs,
Rs.17.22 lakhs and Rs.15.00 lakhs
respectively based on prescribed norms.
(iv)
Total expenditure:
Based on the above
changes, the total expenditure (exclusive of expenditure on power purchase)
works out to Rs. 1177.83 lakhs
as against the RESCO's projection of Rs. 1305.00 lakhs as detailed
below:
Table – 2
Statement of expenditure
Rs. in Lakhs
|
Sl. No. |
Particulars |
RESCO |
APERC |
|
1 |
Wages and Salaries |
648.00 |
638.00 |
|
2 |
Admn & General
Expenses |
60.00 |
50.00 |
|
3 |
Repairs and
Maintenance |
70.00 |
60.00 |
|
4 |
Rent, Rates &
Taxes |
0.00 |
0.00 |
|
5 |
Approved Loan Interest |
40.00 |
36.00 |
|
6 |
Depreciation |
251.00 |
251.00 |
|
7 |
Contbn. to Employee
Funds |
160.00 |
100.00 |
|
8 |
Contbn. to
Contingency Reserve |
8.00 |
8.61 |
|
9 |
Interest on Security
Deposit |
6.00 |
17.22 |
|
10 |
Legal Charges |
2.00 |
2.00 |
|
11 |
Auditors' Fees |
0.00 |
0.00 |
|
12 |
Other Expenses |
60.00 |
15.00 |
|
13 |
Total Expenditure (excluding purchase of
energy) |
1305.00 |
1177.83 |
(c) Reasonable Return:
Based on the changes
made to the Capital Base (accepted by the RESCO), the reasonable return works
out to Rs.131.84 lakhs as against Rs.156.17 lakhs projected by it.
The RESCO has projected
an amount of Rs. 799.00 lakhs
under this head and the Commission has accepted the same.
(e) The Revenue Requirement for the FY 2005-06
(Excluding
power purchase cost)
The Aggregate Revenue
Requirement (excluding power purchase cost) works out to Rs.
510.66 lakhs as against Rs.
662.17 lakhs projected by the RESCO. This is after
taking into account the Reasonable Return of Rs. 131.84
lakhs and
Non-Tariff income of Rs.799.00 lakhs.
(f) Efficiency Gains:
The RESCO has not projected any
efficiency gains for FY 2005-06. The
Commission desires that the RESCO should improve its efficiency to reduce
losses and collect all the outstanding arrears towards sale of energy. The Commission has fixed Rs.35.00 lakhs towards the efficiency gains, considering its total
power demand of 385.30 MU and efficiency already achieved during the last five
years. Thus, the net aggregate revenue requirement works out to Rs.475.66 lakhs.
(g) Expected revenue from charges:
The RESCO has filed the
Expected Revenue from Charges at Rs.2511.00 lakhs based on current Tariff Rates effective from
01-04-2004 which has been reduced to Rs.2002.00 lakhs
to give effect to the changes for the agricultural category, where the revenue
has been revised as per new modified Agricultural policy of Government of
Andhra Pradesh. This is adopted for the
calculation of amount available with the RESCO for power purchases. Category-wise sales and revenue projected by the
RESCO and as approved by the Commission are given in the table below:
Table –
3
Category-wise
Sales and Revenue
|
Sl. |
|
RESCO |
APERC |
||
|
No. |
CATEGORY |
Sales |
Revenue |
Sales |
Revenue |
|
|
|
MU |
Rs. Lakhs |
MU |
Rs. Lakhs |
|
1 |
LT I - Domestic |
45.39 |
955.00 |
45.39 |
955.00 |
|
2 |
LT II - Non-Domestic |
5.66 |
291.00 |
5.66 |
291.00 |
|
3 |
LT III - Industrial |
4.67 |
221.00 |
4.67 |
221.00 |
|
4 |
LT IV - Cottage Industries |
23.23 |
391.00 |
23.23 |
391.00 |
|
5 |
LT V - Irrigation and Agriculture |
244.53 |
592.00 |
244.53 |
83.00 |
|
6 |
LT VI - Local Bodies, Street Lighting |
3.31 |
36.00 |
3.31 |
36.00 |
|
7 |
and LT VI B - PWS schemes |
|
|
|
|
|
8 |
LT VII - General Purpose |
0.73 |
25.00 |
0.73 |
25.00 |
|
9 |
LT VIII - Temporary Supply |
0.00 |
|
0.00 |
|
|
|
Total |
327.52 |
2511.00 |
327.52 |
2002.00 |
(h)
Amount available with the RESCO for power purchases
The amount available with the RESCO
for power purchases has been computed at Rs. 1526.34 lakhs as against Rs.1848.83 lakhs
computed by the RESCO. The details of
the calculation are given in the following table:
Table –4
Amount available with RESCO for power purchases
Rs. in Lakhs
|
Sl. No. |
Particulars |
SIRICILLA RESCO |
APERC |
|
1 |
Expenditure |
1305.00 |
1177.83 |
|
2 |
Reasonable Return |
156.17 |
131.84 |
|
3 |
Less: Non-Tariff income |
799.00 |
799.00 |
|
4 |
Revenue Requirement
(1+2-3) |
662.17 |
510.66 |
|
5 |
Less: Efficiency Gains |
0.00 |
35.00 |
|
6 |
Net Revenue
Requirement (4 - 5) |
662.17 |
475.66 |
|
7 |
Revenue from sale of
Power |
2511.00 |
2002.00 |
|
8 |
Amount available for
Power Purchase (7-6) |
1848.83 |
1526.34 |
|
|
|
|
|
|
|
Units to be purchased
(in MU) |
385.30 |
385.30 |
|
|
Power purchase price :
Re/Unit |
0.48 |
0.40 |
The
RESCO projected power purchase of 385.30 MU (gross) for FY 2005-06. The
Commission accepts the projection of the RESCO.
Based
on the above (385.30 MU purchases), the power purchase price for the RESCO
works out to 40 paise per unit of energy supplied by
the APNPDCL for FY 2005-06.
However, for any additional purchase over and above the limit specified in
paragraph 5 above, the RESCO has to pay at the power purchase rate for excess drawals by APNPDCL or at the Bulk Supply Tariff (BST)
applicable to APNPDCL if the additional purchase by the RESCO does not result
in excess drawal by the DISCOM, as the case may
be. The RESCO shall follow all the guidelines /
regulations applicable to Licensees for power purchases.
7. Tariffs
The RESCO shall charge
Tariffs as per the Tariff Order for 2005-2006, dated:
8.
Compliance with Commission’s Directives
The Commission reviewed the status
of compliance to its directives issued to the RESCO in its orders on ARR / ERC
for the FY 2000-01, FY 2001-02, FY 2002-03 and FY 2004-05. Annexure - A shows a summary of the status of
compliance to the directives as reported by the RESCO. As can be seen therefrom,
many of the directives are ongoing in nature, and it was observed that the
RESCO is generally seeking to comply with the directives.
The Commission directs that the RESCO shall
continue to comply with such ongoing directives issued to the RESCO in the ARR
orders of the Commission for FY 2000-01, FY 2001-02 and FY 2002-03 and further
directs that RESCO should devise a special action plan and make
concerted efforts on the important issues cited below and file reports on
status of compliance thereto at the end of every quarter during FY 2005-06:
(i)
The
RESCO shall fix meters to all services including new agricultural consumers by
the end of FY 2005-06 (directed in part vide paragraph 7 of list of
Commission’s directives in ARR orders for FY 2000-01 and FY 2001-02) and file
quarterly status reports on metering. RESCO shall also file a metering
plan to fix meters
to all agricultural consumers by
(ii)
The
RESCO shall build the sales database for the entire RESCO as directed in
paragraph 4.7.1 of the Commission’s Order on the RESCO’s
ARR/ERC filings for FY 2002-03.
(iii)
In
continuation to Commission’s directives on collection of arrears in the
Commission’s Order on the RESCO’s ARR/ERC filings for
FY 2000-01 and FY 2001-02, the Commission directs that the RESCO shall collect
100% of outstanding dues, as at 31-03-2005, from consumers.
(iv)
The
RESCO shall collect 100% current consumption charges and effect immediate
disconnection for consumers with pending dues (including arrears) of more than
two months’ current billing amount.
(v)
The
RESCO shall regularly pay the full amount due to NPDCL for power purchase at
the rate fixed by the Commission, failing which the NPDCL shall stop power
supply to the RESCO immediately.
(vi)
The
RESCO shall limit agricultural consumption 244.53 MU in FY 2005-06.
(vii)
The
prevailing loss level for calculation of power purchase has been taken at
15.00%. The RESCO shall put in its best efforts to
bring down the losses
to 14.00% by the end of FY 2005-06.
(viii)
The
RESCO shall bring down Transformer failure to 8 % per annum by the end of FY
2005-06.
(ix)
The
RESCO shall identify and disconnect multiple connections (in Domestic and
Commercial categories) to the same premises (meant for the same family /
organization).
(x)
The
RESCO shall conduct energy audit in all Mandal
headquarters in its licensed area and file quarterly reports, also indicating therein the
progress made month-wise.
9. The Commission does not consider the RESCO’s expenditure / revenue calculations as filed to be
in accordance with the requirement. The
Commission has instead proposed alternative calculations for the ARR / ERC and
the rates for power purchases from APNPDCL which the RESCO shall accept and
implement as contained in this order.
This
order is signed on this
|
Sd/- SURINDER PAL MEMBER |
Sd/- K. SREERAMA MURTHY MEMBER |
Sd/- K. SWAMINATHAN CHAIRMAN |
CERTIFIED
COPY
ANNEXURE – A
COMPLIANCE TO
DIRECTIVES ISSUED IN APERC ORDERS ON
ARR / ERC FILED
BY THE RESCO FOR FY 2001-02, 2002-03 & 2003-04
|
Sl. No |
APERC DIRECTIVE |
ACHIEVEMENT REPORTED BY RESCO FY 2004-05
|
|
1 |
The RESCO shall report
to the Commission all Schemes in Compliance to paras
10.2 and 10.3 of the Licence irrespective of
whether the cost is less than Rs. 5 Lakh or more. i)For FY 2004-05 : By
end of September 2004 ii)For
FY 2005-06 : By end of June 2005. |
Submitted Not submitted |
|
2 |
Interest on Consumer
Security Deposit to be passed on to the Consumer. |
The work is under
progress |
|
3 |
Agricultural Consumption to be regulated and limited to the approved
264 MU for the FY 2004-05 |
Agricultural Consumption 100.80 MU upto
September 2004 may not exceed the limit of 264 MU for FY 2004-05.
|
|
4 |
The RESCO shall bring
down losses to 14% by the end of March 2005. |
Losses are currently 17.22 % as on |
|
5 |
Transformer failure
should be contained within 8 % during the year
2004-05. |
Transformer failure is
5.7 % up to |
|
6 |
The RESCO is to redouble its efforts for collection of arrears
from consumers. Current Demand to be accounted separately. |
Amount pending for collection : Rs. 868.13 lakhs as on |
|
7 |
The RESCO shall
release all fresh connections with meters to all categories of consumers |
No service is existing without meter except agricultural consumers
(51636). |
|
8 |
If not already done,
the RESCO shall fix 10 sample meters to agricultural consumers in each Mandal and send monthly readings by 8th of the
succeeding month. |
Meters already
installed. |
|
9 |
The RESCO should
explain to the Agricultural consumers about the advantage of metered billing
and undertaking DSM measures. |
DSM campaign taken
up. No further information furnished. |
|
10 |
The RESCO shall file
with the Commission the status of closure of work orders every month by 8th
of the succeeding month. |
330 Nos work orders closed costing Rs.
91.28 lakhs as at |
|
11 |
The position of
pending payments to APTRANSCO / DISCOMS towards power purchased by the RESCO
during 2004-05 shall be reported to the Commission by |
The RESCO pays regularly without default. |
|
12 |
Disconnection of
unauthorized services |
There are no unauthorized services |
|
13 |
Metering of
agricultural services |
51636 Nos agricultural services are exiting
without meters as on |
|
14 |
Audit of receivables |
Work is under progress. |
|
15 |
Information on new investment |
Complied |
|
16 |
Sales Data Base |
Complied |
|
17 |
Addition of new
consumers |
No. of consumers increased from 169523 as at |
|
18 |
Collection as a
percentage of current billing |
90.47 % as at |
|
19 |
Purchase of energy and
rate at which paid |
174.62 MU as at |
|
20 |
Status of loan
repayment to REC and others as at |
Principal dues not paid : Nil No of instalments due : Nil Interest dues not paid :
Nil No of instalments due :
Nil |
|
21 |
Auditing of accounts
and submission of Audit Reports |
Audit for FY 2004 completed. Audit Report to be submitted. |