REVIEW OF ORDER DATED JUNE 14, 2005 PASSED BY THE COMMISSION IN PETITION NO.4 OF 2005 IN RESPECT OF ANNUAL REVENUE REQUIREMENT AND TARIFF APPLICATION FILED BY THE PUNJAB STATE ELECTRICITY BOARD FOR THE FINANCIAL YEAR 2005-06.
Date of Order: June 15, 2005
ORDERThe Commission has issued the Tariff Order dated June 14, 2005 determining tariff to be charged by the Punjab State Electricity Board from the consumers of electricity in the State of Punjab for the year 2005-06. Table 9.2 of Chapter 9 of the Tariff Order gives the rates determined by the Commission as well as the rates to be charged from consumers after adjusting the subsidy provided by the Govt. for various categories of consumers namely the SC domestic consumers and the agricultural consumers.
The Board vide its Memo No.132/ARR/DTR-216 dated June 15, 2005 has requested the Commission to avoid disparity in the Tariff Order for AP flat and metered supply consumers and has requested that the tariff hike of 5 paise/unit in respect of AP metered supply consumers may not be charged. The Board has further requested that revenue gap on account of this increase in tariff be adjusted during the true up of ARR for the year 2005-06. The Commission also notes that Government has also verbally shown its concern on this disparity and has desired to maintain last year levels both for metered rate as well as flat rate chargeable to agriculture Pumpsets.
It is noted that as per this Table, after adjustement of Government subsidy, the tariff for agricultural consumers is Rs.60/BHP/month in case of unmetered supply which is being charged at flat rate. This rate is converted to 62 paise per unit in the Tariff Order. This equivalence has been worked out as follows:
| (i) | Expected revenue from Farmers (as per Calculation Sheet Of Chapter 9): | Rs.432.82 crorres. |
| (ii) | Agricultural consumption as determined by the Commission for the year 2005-06 : | 7000 MUs. |
| (iii) | Rate per unit: | Expected Revenue Agricultural Consumption |
| = 432.82 x 107x 100 paise/unit. 7000x106 | ||
| = 62 paise per unit. |
The Commission notes that last year the equivalence of Rs.60/BHP/month was 57 paise/unit only. The equivalence between the flat rate and metered rate has been varied substantially during the currrent year due to substantial increase in connected load under Voluntary Disclosure Scheme though this has not justified equivalent increase in energy consumption. As such, in effect, for the consumers having metered supply, the rate has increased, whereas, it has remained the same in case of flat rate. It is also noted that the metered supply is only for agricultural consumers obtaining supply from urban feeders and forms a very small portion of the total agricultural supply. Further, while the agricultural consumers obtaining supply from urban feeders are compulsorily charged at the metered rate of supply, the agricultural consumers obtaining supply from rural feeders have the option to be charged either at flat rate or at metered rate. Further, increase in tariff in respect of mete! red supply rate may adversely affect the metering of agricultural consumers mandated under the Act, especially when the flat rate remains the same.
The difference in revenues of the Board on account of change in metered rate is likely to be marginal as only very small fraction of agricultural consumers are taking supply on metered rate and the total revenue being recovered from the agricultural consumers itself is expected to be Rs.432.82 crores only. The exact figures of the actual revenue being collected by the Board from the agricultural consumers having metered supply are not available with the Commission presently. The Board vide its letter dated June 15, 2005, referred to above, has intimated that of the total 9,12,869 AP consumers existing as on March 31, 2005, there are only 13,847 AP consumers getting metered supply constituting only 1.5% of the total AP consumers. Further, with regard to load of AP metered supply consumers, it is only 1.6% of the total AP load. It is further noted by the Commission that with the total subsidy committed by the Government of Punjab, the aggregate expected revenue from AP set co! nsumers would be fully realized if the above stated AP set consumers being fed from urban feeders notionally contribute to the Board's income at the flat rate of Rs.60/BHP/month. It is Commission's assessment that such a revenue would be surely realized from AP consumers, even if they were charged a metered tariff of 57 paise/unit. On the other hand, if the tariff is retained at the level of 62 paise/unit for these consumers, it would be unjustified and erroneous, especially in the light of the clearly conveyed intention of the Government of Punjab that after subsidy, AP tariffs should remain unchanged over last year and the mandate of the Act.
In light of the above, reviewing its earlier order, the Commission decides that the difference in revenue due to this change in metered rate will be marginal if at all, and will be adjusted in the true up for the year 2005-06 after obtaining from the Board details of actual revenue receipts from AP metered category. The change in tariff for metered category shall thus not affect other categories of consumers.
In view of all above, the Commission decides to continue the metered supply rate also at 57 paise/unit for the year 2005-06.
(H.C.Sood) (Baljit Bains) (R.S.Mann)