Suo Motu Petition No. 43/06     

Sub:-- Clarification/modification on various points of tariff order dated 31.3.06

ORDER
(Passed on 13.6.2006) 

                  The Commission after issue of tariff order for FY07 has noted some errors and ambiguities which need to be clarified and ambiguities removed. The Commission has therefore on its own decided to register a Suo Motu Petition no. 43/06. A public notice was also published on 1.6.06 in newspapers to offer comments/suggestions on the following issues from all stakeholders:- 

(i)        Allowable grace period under tariff schedule LV-1

(ii)       Applicability of demand based tariff  and “billing demand”

(iii)      Definition of “Minimum Charge”

(iv)      Applicability clause of Seasonal consumer under tariff schedule HV-4

(v)       Conditions for payment of minimum charges

(vi)      Applicability of minimum load factor to LT Industries, Railway Traction,

             Coal Mines and HT Industrial & Non Industrial categories 

             The last date of submission of comments/suggestions was fixed on 9.6.06 and the date of hearing was fixed on 13.6.06. 

2.              The Commission has received 61 comments/objections/suggestions from various stakeholders. The Commission has also considered all the responses received within due dates and after the due dates. The issues and responses of various stakeholders have been examined. The Commission has noted that some of the stakeholders have raised new points and given new suggestions on review of tariff order other than the points mentioned above in respect of some categories of consumers. The Commission during the public hearing on 13.6.06 made clear to all the stakeholders that the aforesaid issues related to this Suo Motu petition shall only be considered and other new substantive issues like review of tariff order can only be considered through a review petition if filed before the Commission. Therefore, the Commission issues following clarifications/modifications which shall be applicable from the date of implementation of tariff order dated 31.3.2006.

(i)       The Commission had noticed that the order mentions at page 80 at point 4.7(a)(c) that the Commission will allow 1% of the total number of hours in a month as the grace for the utility for unforeseen interruptions while on page 90 clause (a), the note describes continuous or uninterrupted supply as supply for an average duration of 23 and a half hours or more per day. Thus, there is a discrepancy between the two i.e. at one place it works out to 7.2 hours per month while at the other it works out to 15 hours per month.

              The Commission’s intention was to allow a small margin for routine maintenance etc.  It is clarified through this order that for the purpose of considering uninterrupted supply, an interruption of 30 minutes or less in a day or a total of 15 hours in a month shall be ignored and the supply shall be considered as continuous or uninterrupted.

(ii)      Under tariff schedule LV-4 for Industrial category, there is an overlap in the tariff for 25 HP LT Industries at 4.1b and 4.1c.  

         The Commission clarifies hereby that the tariff schedule LV-4 under Note ( c) on page 96 be read as under:- 
“Any consumer may opt for demand based tariff, however for the consumers having connected load above 25 HP , demand based tariff is mandatory and the licensee shall provide Tri vector/Bi vector Meter capable of recording Demand in KVA/KW, KWH, KVAh and Time of Use consumption.” 

(iii)      The minimum guaranteed consumption was defined at page 111 at point 3.6 and 3.7 but the word “Minimum Charge” was mentioned in the heading instead of “Minimum Consumption”. This is an ambiguity. 

           The Commission had only mentioned the methodology for computing the minimum guaranteed consumption during the year at para 3.6 & 3.7 and this can not be termed as the Minimum Charges. Also, in respect of other category of consumers, the same methodology was mentioned under the Head “ Minimum Consumption” . It is clarified that the words “Minimum Charge” are replaced by “Minimum Consumption”.  

       (iv) (a)          On page 113 in Applicability clause 4.1, the period of season is described as from 15th March to 15th October in a financial year. As the period from 15th March to 15th October does not appear in one financial year, there is a discrepancy and it is hereby clarified that the words “ in a financial year” are omitted and read as “in a calendar year”.  

       (iv) (b)            On page 113 at heading of “Minimum Charge”, the fixed cost charge was not included under minimum charges. This has created an ambiguity; it needs to be clarified.

                                The Commission clarifies hereby that in view of the fact that a seasonal consumer is required to achieve the minimum consumption within a limited period only. Therefore, such seasonal consumer is not required to pay fixed charges if he ensures a minimum consumption as specified in the order i.e. 900 units per KVA. To elaborate, for a consumer having 100 KVA contract demand at 11 KV, minimum guaranteed annual consumption will be 90,000 units and the consumer will pay the energy charges for this consumption which works out to Rs. 3.78 lakhs. If this consumer had consumed only 30,000 units in a season, his fixed charge payment liability would work out to Rs. 2.16 lakhs     (100 KVA X 12 months X 180 Rs./KVA) and energy charge liability would work out to Rs. 1.26 lakhs ( 100 KVA X 300 units/KVA X 4.20 Rs./unit) and the total of these two would be Rs. 3.42 lakhs. The minimum charge as fixed by the Commission is equivalent to 900 units per KVA of consumption, which is higher than the liability worked out in the above example. Thus it is clarified that the seasonal consumer ensuring minimum consumption of 900 units per KVA in a season  is required to pay only energy charges and no separate fixed charges shall be payable by him. This condition is special for seasonal consumer. In the illustration given above where the seasonal consumption fall short of the minimum, the consumer will be required to pay Rs. 3.42 lakhs as energy charges and Rs. 0.36 lakh as tariff minimum.  

(v)                On page 124 at sr. no. 24 and on page 103 at sr. no. (p), the condition for payment of minimum charges is not defined clearly which results in confusion and is liable to  misinterpretation. This needs to be removed and hence the following words are deleted. 

            “ In case minimum charge is levied to consumer, he has to pay either minimum charges or sum of fixed charges and energy charges, whichever is more. Other charges shall be billed separately.”  

(vi)              As per tariff order dated 31.3.2006, the minimum consumption based on load factor is levied to following categories of consumers:-- 

      a.       LT Industries
b.       Coal Mines
c.       Industrial and Non-Industrial 

It has come to the notice of the Commission that supply to some areas is not continuous or some other restrictions are placed on consumption due to which aforesaid consumer may not be in a position to ensure minimum consumption based on prescribed load factor. There is thus a need to clarify the provision of minimum charges/minimum consumption.

            The Commission hereby clarifies that the minimum consumption/ minimum charges be computed as below and the existing words appeared in the heading of Minimum charge/minimum consumption under tariff schedule LV-4, LV-5.2 and  HV-3 be deleted. The order shall thus read as follows:-- 

            For LT Industries up to 25 HP under tariff schedule LV-4  

 “ The consumer will guarantee minimum monthly payment of the charges of the units (KWh) equivalent to annual minimum consumption based on 240 units per HP of  contract demand plus the Fixed Cost Charges on the contract demand for the month, irrespective of whether any energy is consumed or not during the month. The deficit, if any, from the actual consumption (i.e. minimum guaranteed consumption minus actual consumption) shall be charged at the prevailing rate of Energy Cost Charges as Tariff Minimum Difference and the adjustment of deficit units shall be done at the end of the financial year.”

           For LT Industries more than 25 HP under tariff schedule LV-4

“ The consumer will guarantee minimum monthly payment of the charges of the units (KWh) equivalent to annual minimum consumption based on 360 units per HP of  contract demand plus the Fixed Cost Charges on the contract demand for the month, irrespective of whether any energy is consumed or not during the month. The deficit, if any, from the actual consumption (i.e. minimum guaranteed consumption minus actual consumption) shall be charged at the prevailing rate of Energy Cost Charges as Tariff Minimum Difference and the adjustment of deficit units shall be done at the end of the financial year.” 

            For Agriculture related use in rural areas under tariff schedule LV- 5.2   

 “ Minimum Charge : 

Charges equivalent to 240 units per annum per HP or part thereof of the connected load shall be payable by Consumers under metered supply.” 

For  Coal Mines (HV-2) and Industrial & Non Industrial (HV-3)                               

For Supply at 220/132 KV Voltages  

“ The consumer will guarantee minimum monthly payment of the charges of the units (KWh) equivalent to annual minimum consumption based on 1980 units per KVA of contract demand plus the Fixed Cost Charges on the contract demand for the month, irrespective of whether any energy is consumed or not during the month. The deficit, if any, from the actual consumption (i.e. minimum guaranteed consumption minus actual consumption) shall be charged at the prevailing rate of Energy Cost Charges as Tariff Minimum Difference and the adjustment of deficit units shall be done at the end of the financial year.”  

For Supply at 33/11 KV Voltages 

“ The consumer will guarantee minimum monthly payment of the charges of the units (KWh) equivalent to annual minimum consumption based on 1200 units per KVA of contract demand plus the Fixed Cost Charges on the contract demand for the month, irrespective of whether any energy is consumed or not during the month. The deficit if any from the actual consumption (i.e. minimum guaranteed consumption minus actual consumption) shall be charged at the prevailing rate of Energy Cost Charges as Tariff Minimum Difference and the adjustment of deficit units shall be done at the end of the financial year.”.   

(v)                          On page 111 under tariff schedule HV-3, standby charge has been shown in terms of energy charges which is proposed to be covered under Regulation on “ Power Purchase and other matters with respect to Captive Power Plants” being issued separately. These conditions and terms of supply of standby power shall be separately notified by Commission. Hence, the following words appearing under Schedule HV-3 on 111 of tariff order are deleted. 

            “ Note: Standby power may be supplied by the licensee @ 1.5 times of the energy charges subject to the consumer not being defaulted in payment.” 

3.                  Ordered accordingly. 


         Sd/                                                                                                                                              Sd/
(D.Roybardhan)                                                                                                                         (P.K. Mehrotra)
 Member (Engg.)                                                                                                                             Chairman