The Punjab State Electricity Regulatory Commission, in exercise of the powers vested in it under the Electricity Act, 2003 passes this order determining the Annual Revenue Requirement (ARR) and Tariff for supply of electricity by the Punjab State Electricity Board (the Board) to the consumers of the State of Punjab for the year 2005-06. The petition on ARR and Tariff proposal filed by the Board, the facts presented by the Board in its various filings, the objections received by the Commission from various consumer organizations and individuals, response of the Board to the objections and the observations of the Government of Punjab in this respect have been considered. The issues raised by the public in public hearings held at Ludhiana and Chandigarh have also been considered. The responses of the Board as given in writing and in the public hearing held on April 11, 2005 at Chandigarh have been considered. The State Advisory Committee constituted by the Commission under Section 87 of The Electricity Act, 2003 has also been consulted and all other relevant facts and material on record have been perused before passing this Order.
Three Tariff Orders have already been passed by the Commission, determining the tariff with reference to the ARRs and Tariff Applications submitted by the Board for the years 2002-03, 2003-04 and 2004-05.
The first Tariff Order of the Commission for the financial year 2002-03 was issued on September 6, 2002. The Commission was then guided by the principles laid down in Section 29 of the Electricity Regulatory Commissions (ERC) Act, 1998 in determination of tariff. For this purpose, the Commission first examined the ARR proposal of the Board for the year and determined the Total Revenue Requirement at Rs.6803.14 crores (against aggregate revenue at existing rates of Rs. 5381.78 crores) against requirement of Rs.7857.78 crores projected by the Board. The Commission then determined average cost of supply which was used by the Commission to calculate the level of cross subsidy required and made available by each consumer class with reference to existing level of tariff. The Commission then proceeded to determine the tariff rates of various categories of consumers. For this purpose, the Commission was first confronted with the issue of tariff fixation for agriculture pump set consumers who were availing free supply till then. The Commission decided to introduce tariff of 200 Ps/Kwh or Rs.212/BHP/month (against free supply being provided to this sector till then) in view of various factors given in the Tariff Order and the provisions of ERC Act, 1998. The State Government was approached to know about its willingness to extend subsidy to agricultural pump set users and domestic category. The State Government conveyed its willingness to grant subsidy to the tune of Rs.800 crores during the year to be allocated to agricultural sector supply and domestic consumers belonging to Schedule Caste category with connected load upto 300 Watts to give 50 units of free power per month. The Commission agreed to the allocation of Rs.750 crores to agricultural pump set users and Rs.50 crores to Schedule Caste domestic consumers. Taking this subsidy into account the tariff chargeable from agricultural pump set users was fixed at Rs.60 per B.H.P. per month on un-metered supply or 57 paise per unit on metered supply. The State Government further indicated its willingness to extend full subsidy to neutralize the effect of annualisation in case of agricultural pump set users for the period from April 1 to July 31, 2002. The Commission decided that additional subsidy payable by the Government on this account shall be Rs.100 crores in addition to subsidy of Rs.800 crores already committed by the Government. The State Government further requested to levy the subsidized rates w.e.f. October 1, 2002 instead of August 1, 2002 on agricultural pump sets and for that purpose it committed to provide Rs.50 crores additional subsidy to the Board. The Commission agreed to it. The Commission also decided to increase the tariff of subsidized categories of consumers by 11% while the tariff of subsidizing categories of consumers was increased by 8% only. The Commission thus, restructured tariff so as to bring all the categories of consumers nearer to the average cost of supply and reduce level of cross subsidy substantially. The Commission also issued directives to the Board laying down performance parameters on various issues including reduction in T&D losses, generation level to be attained by its own thermal plants, station heat rate, employees cost and also to improve quality of supply of power and service to the consumers.
The Board filed the ARR for the financial year 2003-04 on December 3, 2002 and Tariff Application on December 30, 2002. The Board also filed revised ARR for the year 2002-03. In these filings, the Board had projected the revenue gap of Rs.1862 crores for the year 2003-04 and Rs.1401 crores for the year 2002-03 over and above the tariff increase amounting to Rs.1461 crores allowed by the Commission in the Tariff Order dated September 6, 2002. The Board proposed to capture the impact of the revenue gap of Rs.1862 crores during the financial year 2003-04 through tariff increase ranging upto 48% of various categories of consumers, while the revenue gap of Rs.1401 crores for the year 2002-03 was proposed by the Board to be converted into Regulatory Asset to be recovered subsequently. The Commission examined the ARR proposal of the Board and determined the revenue gap for the year 2002-03 at Rs.324.94 crores against Rs.1401 crores projected by the Board. The Commission further determined a revenue gap of Rs.162.16 crores for the year 2003-04 against the revenue gap of Rs.1862 crores projected in the ARR. Thus the Commission determined the combined revenue gap of Rs.487.10 crores to be covered through tariff revision.The Commission decided to convert Rs.150 crores out of the combined gap of Rs.487.10 crores into Regulatory Asset. This Regulatory Asset of Rs.150 crores was proposed to be recovered from the consumers and the Board in equal proportion during two years viz. 2004-05 and 2005-06. The revenue gap of Rs.351.17 crores which also included interest on Regulatory Asset was proposed to be recovered from the consumers during the year 2003-04 through tariff revision approved by the Commission. The Commission had agreed to adopt this device to protect the revenue interest of the Board and also to ensure that the consumers are not subjected to an unusually high tariff escalation soon after the previous tariff increase made w.e.f. August, 2002. The second Tariff Order of the Commission for the financial year 2003-04 was issued on May 23, 2003.
The Board initially filed its ARR and Tariff Revision Application for the year 2004-05 on December 8, 2003. However, on the direction of the State Government, the Board filed an application on February 27, 2004, seeking the withdrawal of the ARR and Tariff Application for the year 2004-05 on the grounds of exceptional circumstances and one-time restructuring efforts of the Board being underway. The Commission in its Order dated April 6, 2004 allowed the Board to withdraw the ARR and Tariff Application filed by it and to file the fresh ARRs and Tariff Applications for the segregated entities of the Board by May 31, 2004. The ARR and Tariff Application were accordingly filed by the Board on May 31, 2004. The Board proposed gross ARR of Rs.8187 crores i.e. a total cost of Rs.7974 crores and a reasonable return of Rs.213 crores . After accounting for non-tariff income of Rs.330 crores and revenue from existing tariff, the Board projected a revenue gap of Rs.787 crores for the year 2004-05. However, the tariff increase proposed by the Board was only to generate additional revenue of Rs. 392 crores. The Board proposed to carry forward the remaining revenue gap as Regulatory Asset, along with the additional revenue gap of Rs. 68 crores projected for the year 2003-04. The Commission assessed the aggregate revenue requirement at Rs.7424.60 crores and observed that the Board would be getting surplus revenue of Rs.175.86 crores upto end of the year 2004-05 and a surplus of Rs.262.43 crores would be available with the Board as a result of combined impact of truing up exercise for the year 2002-03 and review for the year 2003-04. Thus the total surplus revenue with the Board at the end of the year 2004-05 would be Rs.438.29 crores. Regulatory asset of Rs.150 crores created by the Commission in the Tariff Order for the year 2003-04 would get automatically liquidated as revenue receipt of the Board for the year 2003-04 exceeded its revenue requirements as determined by the Commission. For the surplus to be adjusted, the revenue from tariff of the Board needed to be decreased by 6% on an average. The Commission decided that the decrease should not be equal for each category of consumers and decided to grant 8% relief in tariff to the subsidizing categories and 3% relief in tariff to the subsidized categories.
The Tariff Orders of the Commission for the year 2002-03 and 2003-04 were challenged in the Punjab & Haryana High Court by the consumers. The Tariff Order for the year 2002-03 was set aside by the High Court. The order of the High Court has, however, been stayed by the Supreme Court in SLPs pending before it for final decision. The appeals filed in respect of Tariff Order for the year 2003-04 are still pending before the High Court. For the year 2004-05, the Tariff Order of the Commission has been challenged both by the consumers as well as the Board. The Board has challenged the order on the grounds that the Commission has wrongly given retrospective effect to the order, that the Commission has arbitrarily interferred with the “indoor management” of the petitioner by requiring submission of a proposal for creation of Depreciation Reserve Fund, that the approach adopted by the Commission is in deviation of Section 59 and Sixth Schedule of the Electricity (Supply) Act, 1948, that the order has been passed in total disregard to applicable law which requires that the tariff reflects cost of supply, that the Commission has erroneously not allowed legitimate legal and reasonable employees related expenses, that the Commission has disallowed amount required to be catered towards meeting unfunded past pension liability and that the Commission has also disallowed other legitimate expenses. Steel Furnace Association of India has challenged the Tariff Order on the ground that the Commission has wrongly disallowed a sum of Rs.100 crores only out of interest cost on adhoc basis when the exact amount of diversion of funds had been clearly determined by the Commission to be much higher, that the excessive and unjustified cost in the form of interest, depreciation and ROR pertaining to over-valuated assets of Ranjit Sagar Dam Project due to over-allocation of assets to power sector ought to have been disallowed, that the Commission has failed to follow principles enshrined in Section 61 of the Act as it has neither specified any time frame for elimination of cross-subsidies nor has determined the tariff on the basis of cost of supply of electricity of various categories of consumers, that non-tariff income has not been reduced from the ARR of the Board for the purpose of working out average cost of supply, that 10% concession allowed to domestic consumers in rural areas is arbitrary, irrational and unlawful, and that the Commission has passed on the inefficient and incompetitive employees cost to the consumers. The matter is pending in the High Court for final decision.
The Board filed its ARR and Tariff Application for the year 2005-06 on December 30, 2004. The Board worked out revenue gap of Rs.1431 crores for the year 2004-05 regarding which the Board stated that suitable recovery mechanism needed to be evolved separately. The Board also worked out additional revenue requirement of Rs.1878 crores for the year 2005-06 after adjustment of revenue surplus of Rs.291 crores from the previous year i.e. 2004-05. In its tariff application for the year 2005-06, the Board proposed to capture only about Rs.1002 crores out of total additional revenue requirement of Rs.1878 crores for the year 2005-06 through tariff increase and remaining gap of Rs.876 crores was proposed to be carried forward as Regulatory Asset subject to the approval of the Commission.
On scrutiny it was observed that there were number of shortcomings in the filing. There were also number of discrepancies in the data on the basis of which revenue requirement was worked out. The Commission communicated deficiencies noticed in the filing to the Board vide its letter No.260 PSERC dated January 21, 2005. In respect of the proposal of the Board to create Regulatory Asset, it was pointed out to the Board that Regulatory Asset could be justified only in extremely unusual circumstances or when the costs are of one time nature justifying spread-over to a number of years or the cost of supply is likely to go down in future years.
Vide letter No.92/ARR/DTR-216 dated January 31, 2005, the Board replied that the required information will be submitted during the process of tariff proceedings and requested the Commission to take on record the ARR and Tariff Application filed by the Board. Vide letter No. PSERC/402 dated February 2, 2005, the Commission again asked the Board that the Board needs to either revise its ARR to cover the full costs through the revenues generated at the existing tariff structure or else indicate as to how it proposes to cover this gap in the current year and in future years through means other than the creation of Regulatory Reserve. It was further suggested in the letter that if the Board proposes to retain the level of ARR and the consequent level of the revenue gap as indicated in the petition, it must include in its tariff application the complete coverage of the gap through additional tariff and/or other income. The Board was asked to submit the revised Tariff Application at the earliest. The Commission allowed the Board to submit other information during the proceedings of the ARR and Tariff Application. Vide letter No.132/ARR/DTR-216 dated February 4, 2005, the Board requested the Commission to provide suitable treatment to the proposed Regulatory Asset and allow the financing cost to be passed on to the consumers till the liquidation of the Regulatory Asset as to avoid any tariff shock to the consumers. It was further requested therein that the ARR for the year 2005-06 may be taken on record. The Commission took on record the ARR and Tariff Application of the Board on February 9, 2005.
Vide letter dated March 28, 2005, the Board submitted additional information and reply to the deficiency letter dated January 21, 2005 issued by the Commission. Vide letter No.640/ARR/DTR-216 dated April 21, 2005 the Board submitted further clarification on certain points raised by the Commission on the reply to the deficiency letter. The Board also made a presentation before the Commission on April 11, 2005 and subsequently vide letter No.649 dated April 22, 2005 filed copy of its presentation. The Board further made latest estimated figures available through this reference. Further submissions on various matters relating to ARR and Tariff were made by the Board, a list whereof is at Annexure-1 to this chapter. All the filings made by the Board have been considered by the Commission and have been dealt with in relevant chapters of this order.
The Commission decided to proceed in the matter by holding public hearings in accordance with the provisions of Sections 64 and 86(3) of The Electricity Act, 2003. The Commission also decided to follow the procedure laid down under the Tariff Regulations issued in accordance with the E.R.C. Act 1998, the terms and conditions of which were continued subject to the provisions of Electricity Act 2003, vide notification dated July 8, 2004 published in the Punjab Government Gazette dated July 16, 2004. Accordingly, public notice was issued in leading newspapers of the State inviting objections from the general public. The public notice was published in The Tribune, Indian Express, Punjabi Tribune, Amar Ujala and Jagbani on February 14, 2005.
Copies of the ARR and Tariff Application for the year 2005-06, deficiency letter issued by the Commission and replies of the Board dated January 31, 2005 and February 4, 2005 were made available in the offices of the Chief Engineer, Commercial, PSEB, Patiala, Liaison Officer, PSEB Guest House, # 248 Sector 19-A, Chandigarh and also in the offices of all Chief Engineers (Operation) and all Superintending Engineers-in-charge of Operation Circles of the Board. Vide public notice, objectors were advised to file 7 copies of their objections with the Secretary of the Commission upto March 16, 2005, with an advance copy to the PSEB. It was specifically stated in the public notice that after perusing the objections received in response to the notification, the Commission may conduct public hearings on dates which would be notified by the Commission in due course.
The Commission received 38 written objections within the due date expressing concern over the proposed increase in tariff charges, the working of the Board, method of estimation and high level of T&D losses, high Employees Cost, continuance of Monthly Minimum Charges, introduction of Two Part Tariff and a number of other issues related to tariff. Some of these objections were not in the format prescribed by the Commission and were not supported by affidavits. However, the Commission, using its inherent powers as laid down in Conduct of Business Regulations, took cognizance of all the objections irrespective of whether these fulfilled the prescribed requirements or not, so as to have the benefit of the views of those objectors also. 15 additional written objections were received after the due date and upto April 25, 2005 either during the public hearings or in the office of the Commission. The Commission decided to take all these objections into account. Out of the 53 objections received and taken on record, 32 were on affidavits and 21 were without affidavits. But all these objections were considered and taken into account by the Commission.
The State Government was also approached by the Commission through letters dated March 3, 2005 and April 14, 2005 to give its views on the ARR & Tariff Application of the Board and the issues raised in the references by the Commission. The State Government made its submissions in writing vide their D.O. Letter No.11/21/2005-EB-5/325 dated 3.5.2005 on the ARR and tariff filings of the Board. In the reply, the Government has given its views/observations on various issues involved which have been taken note of by the Commission.
Number of objections received from each category of consumers/ individuals/ consumer groups/ organizations and others in response to the public notice issued for inviting objections from general public, are detailed below :
| SI. No. | Category | No. of Objections |
|---|---|---|
| 1 | 2 | 3 |
| 1. | Chambers of Commerce | 5 |
| 2. | Industrial Associations | 16 |
| 3 | Industry | 9 |
| 4 | Railways | 1 |
| 5 | PSEB Engineers Association | 1 |
| 6 | Consumer protection and Grievances Redressal Forum | 2 |
| 7 | Trade unions | 1 |
| 8 | Social Welfare Trusts | 2 |
| 9 | Municipal Council | 4 |
| 10 | Gram Panchayat | 4 |
| 11 | Schools and Colleges | 2 |
| 12 | Individuals | 6 |
| Total | 53 |
The list of objectors is given in Annexure- II to this Chapter. The Board submitted its replies to all the written objections raised by various consumers/ consumer organizations, copies of which were supplied to respective objectors.
The Commission decided to hold public hearings at Ludhiana and Chandigarh. Public notices were published on March 7, 2005 in leading Newspapers namely The Tribune, Indian Express, Punjab Kesri, Jagbani and Punjabi Tribune informing the objectors, the consumers and general public about the holding of public hearings at the following places on the dates shown against each of them :
| Venue | Date & Time of Public Hearing | Category of consumers to be heard |
|---|---|---|
| LUDHIANA Bachat Bhawan, Mini Secretariat, Jagraon Road, Ludhiana | March 29, 2005 11.00 AM to 1.30 PM(To be continued in the afternoon, if necessary) | All consumers / Organizationsbased at Ludhiana and surrounding areas. |
| CHANDIGARH Commission Office i.e. SCO 220-221,Sector 34-A, Chandigarh. | April 05, 2005 10.30 AM to 1.30 PM(To be continued in the afternoon, if necessary) | All consumers except Industry, Agricultural consumers and staff unions of the Board. |
| -do- | April 06, 200510.30 AM to 1.30 PM | Industry |
| -do- | April 06, 20053.00 PM onwards | Staff Unions of the Board |
| -do- | April 07, 200510.30 AM to 1.30 PM | Agricultural consumers |
| -do | April 07, 20053 PM onwards. | Open for all consumer categories |
In the public notices, it was also intimated that the Commission will conduct the public hearing at Chandigarh on April 11, 2005 in which PSEB will reply to objections raised by public in writing and during public hearings and make presentation of its case.
The public hearings were held as per schedule and objectors, general public and the Board were heard by the Commission. The brief of issues raised by public is given in Chapter-6.
1.4 STATE ADVISORY COMMITTEEThe State Advisory Committee constituted by the Commission under Section 87 of the Electricity Act, 2003 was published in the Punjab Government Gazette of January 21, 2005. The ARR and the Tariff Application filed by the Board for the year 2005-06 were discussed in a meeting of the State Advisory Committee convened for the purpose on April 1, 2005. The minutes of meeting of State Advisory Committee are enclosed as Annexure –III to this chapter.
The Commission thus ensured that the due process as contemplated under The Electricity Act, 2003 and the Regulations framed by the Commission was followed at every step and adequate opportunity was given to all the persons concerned to present their points of view.
Annexure-1
| Sr. No. | Board’s letter No. & date | Subject |
|---|---|---|
| 1. | 656 ARR/DTR-216 dt. April 25, 2005 | Information regarding monthwise extension in AP load under VDS. |
| 2. | 696/ARR/DTR-216 dt. May 3, 2005 | Submission for condonation of inadvertent omissions/shortcomings in the ARR. |
| 3. | 707/ARR/DTR-216 dated May 5, 2005 | Additional information in respect of prior period power purchase adjustments. |
| 4. | 739/ARR/DTR-216 dated May 12, 2005 | Additional information in respect of directives 11.1, 11.2 and 11.3 issued by the Commission in its Tariff Order for the year 2004-05. |
| 5. | 740/CC/DTR/115 dated May 12, 2005 | Additional information relevant to computation of Employees Cost in ARR and Tariff Application for the year 2004-05. |
| 6. | 741/ARR/DTR-216 dated May 12, 2005 | The Board submitted that the estimated capital expenditure of Rs.84 crores may be allowed by the Commission in the ARR for the year 2005-06 for providing energy meters on distribution transformers. |
| 7. | 779/ARR/DTR-216 dated May 17, 2005 | Submission of further clarification and comments on the issues like disparity in quality of power supply between urban and rural consumers, method of calculation of meter rentals, proposal for creation of G.P.Fund account and Depreciation Reserve Fund and prior period items appearing in balance sheets for the years 2002-03 and 2003-04. |
| 8. | 780/ARR/DTR-216 dated May 17, 2005 | Submission of pre-actual data for the year 2004-05. |
Annexure- II
| Sl. No. | Name of the objector with address | Abbreviation used | No. of objections received (Sl.No. of objection in the receipt register) |
|---|---|---|---|
| 1 | Shri S.P.Bansal, 424, Kamla Nehru Nagar, Bathinda (Punjab) | 1 (1) | |
| 2 | Shri Joginder Kumar, President, The Ludhiana Electroplaters Association, Gambhir Market, Gill Road, Ludhiana-141003. | LEA | 1 (2) |
| 3 | Shri H.N.Singhal, Corp.Manager(Pers.& Admn..), M/S Nahar Industrial Enterprises Ltd., Phase-IV, Focal Point, Ludhiana-141010 | Nahar | 1 (3) |
| 4 | Shri R.P.Bhatia, Zonal Chairman-cum-Sr.Vice President of All India Induction Furnances Association, Steel Re-Rolling Mills Association of India, Bhatia Steel Complex, G.T.Road, Mandi Gobindgarh-147301.(Pb.) | AIIFA SRRMAI | 1 (4) |
| 5 | Shri R.P.Bhatia, Trustee, M/S Gobindgarh Educational & Social Welfare Trust, G.E.S.T. Complex, G.T.Road, Mandi Gobindgarh-147301. | GESWT | 1 (5) |
| 6 | Shri R.P.Bhatia, Trustee, M/S Mahant Parbhat Puri Social Welfare Trust, Back side Petrol Pump, Amloh Road, Mandi Gobindgarh-147301. | MPPSWT | 1 (6) |
| 7 | Shri Jaswant Singh Birdi, General Secretary, M/S Cycle Trade Union (Regd.) Gill Road, Miller Ganj, Deshprem Complex, Gobindpura, Ludhiana-141003. | CTU | 1 (7) |
| 8 | Shri Sham Lal Prashar, # 68, Bank Colony, Patiala | 1 (8) | |
| 9 | Shri R.S.Sachdeva, Co-Chairman, Punjab Committee PHDCCI, PHD Chamber of Commerce and Industry, 107, Sector 18-A, Chandigarh-160018. | PHDCCI | 1 (9) |
| 10 | Shri Angad Singh. COL.(Retd.) General Secretary, The Consumers Protection and Grievances Redressal Forum (Regd.), K.No.1504, Phase 3B-2, S.A.S.Nagar(Mohali) Distt. Ropar. | CPGRF | 2 (10, 11) |
| 11 | Shri S.P.Oswal, Past Chairman, Punjab State Council, CII, Confederation of Indian Industry, Northern Region, Sector 31-A, Chandigarh-1 60030. | CII | 1 (12) |
| 12 | Executive Officer, Municipal Council, Moga, District Moga. | E.O.Moga | 1 (13) |
| 13 | Shri Devidayal S/o Shri Ami Lal, Partner Dashmesh Paper Board Mills, Jaitu, District Faridkot. | 1 (14) | |
| 14 | Shri Surinder Sachdeva, Chief Patron(Chamber of Commerce and Industry) Sachdeva Cotton Factory, Jalaleana Road, Kotkapura, District Faridkot | CCIKotkapura | 1 (15) |
| 15 | Shri Harpal Singh Sandhu, President, Kotkapura Rice Millers Association, Devi Wala Road, Kotkapura, District Faridkot. | RMA Kotkapura | 1 (16) |
| 16 | Shri Satpal S/o Shri Sadhu Ram Partner Bharat Card Board Mills & General Mills, Chahal Road, Faridkot. | Bharat | 1 (17) |
| 17 | Shri Raj Kumar Goel, President, Industries Association, Focal Point, Kotkapura, District Faridkot | IA, Kotkapura | 1 (18) |
| 18 | Shri S.S.Chhillar, Authorised Signatory of M/S GIS Limited (Unit – The North India Spinning Mills), Village Akbarpur, Post Box No.1, Ahmedgarh-148021, District Sangrur | GIS Ltd. | 1 (19) |
| 19 | Shri A.K.Mehra, Director, M/S Siel Limited, 5th Floor, Kirti Mahal, 19, Rajendra Place, New Delhi-110008 | SIEL Ltd. | 1 (20) |
| 20 | Shri J.K.Jairath, Chamber of Industrial & Commercial Undertakings, M.C. Block No.2, IInd Floor, Gill Road,Ludhiana-141003 | CICU | 1 (21) |
| 21 | Shri A.Puri, General Manager(Projects), M/S Punjab Alkalies & Chemicals Limited, SCO.125-127, Sector 17-B, Post Box No.152, Chandigarh-160017. | PACL | 1 (22) |
| 22 | Shri Vinod Vashisht, President, All India Steel Re-Rollers Association, Ram Mandir, G.T.Road, Mandi Gobindgarh | AISRA | 1 (23) |
| 23 | Shri Narinjan Singh, President, Small Scale Industrial Association(Regd.), Industrial Estate, Rajpura-140401 | SSIA, Rajpura | 1 (24) |
| 24 | Shri Mohinder Gupta, President, Mandi Gobindgarh Induction Furnance Association(Regd.) C/o M/s Gian Castings, New Grain Market, Mandi Gobindgarh-147301.(Pb.) | MGIFA | 1 (25) |
| 25 | Shri Harinder Puri, Secretary, Steel Furnace Association of India (Punjab Chapter) C/o. Upper India Steel Mfg. & Engg. Co. Ltd.,Dhandari Industrial Focal Point, Ludhiana-141010. | SFAI | 1 (26) |
| 26 | Shri Rajinder Mittal, President, Vanaspati Producers’ Association of Punjab, C/o Bhatinda Chemicals Ltd., Hazi Rattan Link Road, P.Box No.71, Bhatinda (Pb.) | VPAP | 1 (27) |
| 27 | Shri Tarsem Saini, President, Punjab Rice Millers Association, New Grain Market, Patiala | PRMA Patiala | 1 (28) |
| 28 | Smt. Sakuntla Devi, Sarpanch, Gram Panchayat, Rajrana, Block Sardulgarh (Mansa) (Pb.) | GP Rajrana | 1 (29) |
| 29 | Shri Gopi Ram, Sarpanch, Gram Panchayat, Karandi, Block Sardulgarh (Mansa) (Pb.) | GP Karandi | 1 (30) |
| 30 | Shri Kulwant Singh Sidhu Sarpanch, Gram Panchayat, Sangha, Block Sardulgarh (Mansa) (Pb.) | GP Sangha | 1 (31) |
| 31 | Smt. Jaswinder Kaur, Sarpanch, Gram Panchayat, Loharkhera, Block Sardulgarh (Mansa) (Pb.) | GP Loharkhera | 1 (32) |
| 32 | Shri Mukesh Ghaiye, General Secretary, Ludhiana Hand Tools Association, E-184, Focal Point, Ludhiana-141010. | LHTA | 1 (33) |
| 33 | Shri L.S.Dhillon, Chief Engineer, Bhagwanpura Sugar Mills, DHURI-148024, Distt.Sangrur(Pb.) | BSM Dhuri | 1 (34) |
| 34 | Manager, Shastri Model School, Phase-1, S.A.S.Nagar (Mohali)-160055. | 1 (35) | |
| 35 | Shri Rajeev Garg, resident of 74-A, Hira Nagar, Patiala. | 1 (36) | |
| 36 | Shri Sujan Singh Cheema, resident of 43, Deshmesh Colony, Rajpura-140401, District Patiala (Pb.) | 1 (37) | |
| 37 | Shri Prabjot Singh Sandhu, President, Industrial Welfare Association (Regd.) # 226, Industrial Focal Point, Phase-IX, Mohali-160062. | IWA-FP, Mohali | 1 (38) |
| 38 | Shri Ramesh Talwar, 678-680, Navrang Bagh Jhanda Singh, Amritsar. | &nbp; | 1 (39) |
| 39 | Shri Hukam Chand Proprietor, Lajwanti Cotton Mills, Jaitu, District Faridkot. | &nbp; | 1 (40) |
| 40 | M/S Jagan Nath Gurcharan Singh, Gaushala Road, Jaitu, District Faridkot. | &nbp; | 1 (41) |
| 41 | Shri P.D.Sharma, President, Apex Chamber of Commerce and Industry (Punjab), Room No.212, 2nd Floor, Savitri Complex, Post Bag No.740, G.T.Road, Ludhiana-141003. | ACCI, Ldh | 1 (42) |
| 42 | Shri Shivdesh Bandhu Gupta, Manager, Devki Devi Jain Memorial College for Women, Kidwani Nagar, Near Suffian Bagh, Ludhiana-141008. | 1 (43) | |
| 43 | Shri Sandeep Jain, Sr.Vice President, North India Induction Furnace Association, Room No.212, 2nd Floor, Savitri Complex, G.T.Road, Ludhiana-141003. | NIIFA | 1 (44) |
| 44 | Shri Varinder Kapoor, General Secretary, United Cycle & Parts Manufacturers Association, Near Campa Cola Chowk, Gill Road, Ludhiana-141003. | UCPMA, Ldh | 1 (45) |
| 45 | Er H.S.Bedi, General Secretary, PSEB Engineers’ Association, (Dy.Director/APDRP (H.Q.) A-2, Shakti Vihar, Patiala. | PSEBEA | 1 (46) |
| 46 | Executive Officer, Nagar Council, Gobindgarh | EO Gobindgarh | 1 (47) |
| 47 | Executive Officer, Nagar Council, Dera Bassi (Patiala) | EO Dera Bassi | 1 (48) |
| 48 | Executive Officer, Nagar Council, Malerkotla | EO Malerkotla | 1 (49) |
| 49 | Shri Narottam Das, Chief Electrical Distribution Engineer, Northern Railways, Hd.Qrs Office, Baroda House, New Delhi | NR | 1 (50) |
| 50 | Shri R.P.Bhatia, (i) Zonal Chairman SRMA cum Sr.Vice President, All India Induction Furnance Association (ii) Trustee Gobindgarh Education & Social Welfare Trust-cum-Mahant Parbhat Puri Social Welfare Trust, Mandi Gobindgarh | AIIFA | 1 (51) |
| 51 | Shri Dharam Pal Jain, Vice President, Ludhiana Steel Re-Rollers Association (Regd), Opp. Hotel Grewalz, Ferozepur Road, Ludhiana | LSRRA, Ldh | 1 (52) |
| 52 | Shri Y.P.Mehra, Ex-Technical Member PSEB, 12, Ram Bagh Colony, Behind G.P.O., Patiala. | 1 (53) |
Annexure-III
The meeting of the State Advisory Committee was held in the office of the Commission at Chandigarh on April 1, 2005. The following were present :-
| 1. | Sri R.S.Mann | Ex. Officio Chairman |
| 2. | Mrs. Baljit Bains | Ex. Officio Member |
| 3. | Sri G.S.Kalkat,
Former Vice Chancellor, Punjab Agricultural University. | Member |
| 4. | Dr. A.S. Joshi,
Professor & Head Deptt. of Economics, Punjab Agriculture University, Ludhiana. | Member |
| 5. | Sri Amarjit Goyal,
PHDCCI, Punjab Committee. | Member |
| 6. | Sri Sharat C. Mahajan,
Member Power, BBMB. | Member |
| 7. | Sri R.K. Jain,
Executive Director, NTPC. | Member |
| 8. | Sri Sucha Singh Gill,
Professor Deptt of Economics, Punjabi University, Patiala.` | Member |
| 9. | Sri Y.P.Mehra,
Ex-Tech. Member, PSEB. | Member |
| 10. | Sri B.K. Bindal,
Engineer-in-Chief/Metering, PSEB. | Member |
| 11. | Sri Param Hans Singh,
CE/SO & C, PSEB. | Member |
| 12. | Col. Angad Singh,
General Secretary, Consumer Protection & Grievances Redressal Forum, Mohali. | Special Invitee |
| 13. | Sri Ramesh Talwar,
Amritsar. | Special Invitee |
| 14. | Lt.Gen. Kamaljit Singh,
Gurdaspur. | Special Invitee |
| 15. | Mrs. Ajanta Dayalan,
Secretary, PSERC. | Secretary |
The Chairman welcomed the Members and Special Invitees to the meeting of the State Advisory Committee and thanked everyone present for having spared time to attend the meeting. Chairman introduced Smt. Bains, the new Member of the Commission who has joined in place of Sri S.K. Sharma, Ex-Member, who had demitted office on completion of his term. Thereafter, the Chairman pointed out the objectives of the State Advisory Committee as laid down in the Electricity Act, 2003. He specifically pointed out that the basic aim of the Electricity Act, 2003 is to provide cheaper, reliable and adequate power to all users and at the same time to ensure that the Utilities also get their prudent and justified expenditure for supply of such power. The Chairman also mentioned that during the last three meetings of the Committee, many useful opinions and suggestions had come forth and these had proved very useful to the Commission in issue of its Tariff Orders. The Chairman further informed the Members that as per the functions and responsibilities assigned to the State Commission in the Electricity Act, 2003, the Commission has been determining the tariff in a fair and transparent manner for various categories of consumers in the State. While doing so, the cross subsidies have also been reduced considerably.
Chairman pointed out that the important points to be commented upon by the Members of the Committee are contained in the Agenda Notes circulated to the Members of the Committee. He, however, requested specific views of the Members on the following issues to enable the Commission to form its opinion on these issues while passing the order:-
The assessment of the agricultural consumption is the most crucial issue before the Commission. This is because the agricultural consumption, which constitutes about 27 % of total consumption of electricity, is not metered and has, therefore, to be assessed. The T&D losses of the Board are also intrinsically linked to the agricultural consumption as assessed by the Commission. These, in turn, reflect on the efficiency of the Board in a substantive manner. The Commission in its first Tariff Order for the year 2002-03 had fixed norm for agricultural consumption at 1700 kwh/kw/year. This was done after detailed analysis of the norms adopted by other Commissions, the results of sample meters study of the Board, the World Bank report on the issue undertaken in Haryana and the study earlier conducted by the Punjab Agricultural University as well as the fact that the year 2002-03 was substantially a drought year. Thereafter, after getting the actual AP consumption for the year 2002-03 and agreeing to the assertions made by the Board regarding increase in consumption in a drought year, the norm of 1650 kwh/kw/year was fixed by the Commission for the year 2003-04 which was a normal monsoon year. The Commission again allowed enhanced agricultural consumption norm of 1700 kwh/kw/year for the year 2004-05 in view of substantial monsoon failure during that year. The Board has, however, pleaded for enhancement of these norms. It has now projected that there has been a significant shift in AP consumers from monobloc pumpsets to submersible pumpsets which now constitute about 30% of the total population. The consumption of submersible pumpsets is stated to be about 24% higher than that of monobloc pumpsets. In addition, depleting water table is also stated to be leading to higher agricultural consumption. Accordingly, the Board has pleaded that norm for agricultural consumption be enhanced to 1814 kwh/kw/year which is the level being exhibited by sample meters of the Board.
ii) Transmission & Distribution LossesAs already stated, the T&D losses of the Board are also not measured but are assessed. These are intrinsically linked to the assessment of agricultural consumption. The higher the agricultural consumption, the lower the T&D losses and vice versa. Accordingly, the Commission fixed the base level of T&D losses for the year 2002-03 with reference to the agricultural consumption assessed by the Commission. Thereafter, the loss reduction targets were fixed by the Commission after discussions with the Board. In fact, these loss reduction targets were even less than the ones projected by the Board itself at that stage. However, the Board has not been able to adhere to its own commitment in this regard and has not been able to reduce the losses as per the targets fixed by the Commission. Treatment of T&D losses actually incurred by the Board in excess of target fixed by the Commission is the issue for decision before the Commission. More specifically, the question whether additional cost incurred on this account needs to be totally disallowed or only partially disallowed as a part of penalty for non-achievement of targets fixed by the Commission or only a token penalty is to be imposed on the Board, is to be decided.
iii) Employees CostThe Commission had accepted the employees cost of Rs.1274 crores actually incurred by the Board in the year 2002-03 and had directed the Board to take steps to ensure that this cost is kept at the same level in future years. The Board has, however, projected much higher employees cost than the approved level for the year 2004-05 as well as for the year 2005-06. The Board has justified the increase on account of merger of DA with pay, grant of dearness allowance instalments and increments etc. at par with the Government of Punjab and also in view of the contractual obligations by virtue of initial appointment offers issued by the Board to its employees. However, in view of the higher employees cost of the Board as compared to the employees cost prevalent in other Boards/ Utilities, it needs to be decided whether any enhancement in the employees cost is to be allowed to the Board and if so, to what extent.
iv) Disparity in quality of power supply to rural and urban areasOf late, it has been brought to the notice of the Commission that there is vast disparity in the quality of power supply being made available to the rural areas and the urban areas. Most explicit discrimination is in the extent of power cuts imposed on these areas. While the urban areas undergo power cuts for much shorter periods, the rural areas are subjected to substantively higher power cuts. While the necessity of power cuts is accepted in view of the overall availability situation, the discrimination in power supply is not fully understandable. It is also doubtful if such differentiation is permissible and can be justified under the law. Views on this issue are solicited from the Advisory Committee Members to enable the Commission to take a decision in this regard
With these observations, the Chairman invited the Members for their valuable views.
Sri G.S. Kalkat was of the view that the norm of 1650 kwh/kw/year is quite fair and adequate to meet farmers requirement in a normal monsoon year. The requirement may change for paddy only in relation to change in the number of days it rains very heavily in the monsoon season. However, the quality of power supply needs to be improved. The supply also needs to be continuous. Sri Kalkat observed that there is no denying the fact that number of monoblock pumpset owners have changed over to deep tubewells which may consume more power for the same output. He was of the opinion that for paddy nurseries, PSEB should make the power available from May 15 and for paddy transplantation, supply may be made available from June10 only.
Regarding supply to rural areas, Sri Kalkat was of the view that as compared to urban supply, the supply to rural areas is very poor and this issue needs to be suitably addressed.
Dr. Sucha Singh Gill informed the Members that as per the field study carried out in Ludhiana & Mansa Districts by the students of his University, the electricity being supplied during paddy season was about 7 hours in Luhdiana area and about 6 hours in Mansa District. He informed that there is about 20-25% conversion of monoblock to submersible pumpsets. He opined that the norm of 1650 kwh/kw/year adopted by the Commission for a normal monsoon year does not require any change.
On the issue of difference in quality of supply to rural areas viz-a-viz urban areas, Sri Gill was of the view that the discrimination needs to be addressed. He also pleaded for an overall improvement in quality of power supply.
Sri Gill, while talking about the T&D losses in the PSEB system, pointed out that considerable amount of power theft is included in the projected T&D losses and also that this theft is being carried out by very highly influential people. Sri Gill stressed the need for energy accounting at Sub Divisional level and identification of the theft prone areas to curb this theft.
Sri B.K. Bindal, opined that 100% metering for assessing the AP consumption is not necessary if the sample metering is undertaken properly after taking into account all relevant factors namely area under cultivation, cropping pattern, area catered by each pumpset and type of pumpsets installed etc. etc. On the employees cost, Sri Bindal was of the view that there is no way of reducing the same as natural growth in emoluments of the employees cannot be curbed.
Sri Jain, representing NTPC, was of the opinion that PSEB should optimize the spares and Station Heat Rates at various plants. He was of the view that stringent targets should be fixed for forced outages. Regarding T&D losses, Sri Jain was of the view that the target for loss reduction of 1.25% fixed by the Commission is quite reasonable. He stressed for the need of circle wise study of T&D losses to identify the higher T&D loss areas.
Sri Ramesh Talwar, a Special Invitee from Amritsar, was of the opinion that corrective steps need to be taken by the Board on the following issues:
Lt. Gen. Kamaljit Singh, another Special Invitee from Gurdaspur, was also of the opinion that there should be no discrimination in quality of supply to rural and urban areas. According to him, the Board should not release additional connections if it is not in a position to supply power. He was also in favour of energy accounting and audit to check T&D losses.
Sri Param Hans Singh, CE/SO&C while responding to objections of various members on differential treatment of urban / rural supply, informed the Committee that a petition is already pending before the Commission on the issue. The Board shall comply with the orders of the Commission on the issue.
Col. Angad Singh, General Secretary, Consumer Protection and Grievances Redressal Forum, Mohali pointed out that various Government Departments / Offices owe more than Rs.80 crore to the Board towards electricity bills. This amount needs to be recovered on priority. He also observed that if the generation at RTP during the year 2004-05 could be more, the same could have been achieved earlier as well. He was of the opinion that sincerity on the part of PSEB employees was lacking. According to him, the pay scale and promotion of the employees should be linked to T&D losses and other efficiency parameters. Col. Angad Singh was also critical of the Board for not posting adequate number of PSEB employees as per its share in BBMB.
Sri Sharat C. Mahajan, Member (Power), BBMB apprised the Members of the Committee that no post of PSEB share is lying vacant in BBMB and in fact, the PSEB is very efficient in posting its staff as per its share in BBMB. Regarding T&D loss reduction, he suggested installation of shunt capacitors at various sub-stations of PSEB.
Dr. Joshi, Professor and Head of Department of Economics, Punjab Agricultural University, Ludhiana pointed out that only 15% of the monoblock AP sets have changed over to submersible type. He opined that the norm of 1650 kwh/kw/year adopted by the Commission is quite fair. Sri Joshi was of the view that T&D losses in the Board are quite high.
Sri Narotam Dass, Chief Electrical Distribution Engineer, Northern Railway spoke about the overstaffing in the Board. He suggested that surplus staff should be adjusted against posts lying vacant in various offices of the Board. He suggested for some incentive on timely payment of bills as per practice prevalent in NTPC. He opined that contract demand charges should be reduced. Sri Dass suggested that rebate on account of high voltage supply and better power factor should be extended to Railway traction.
Sri Y.P. Mehra, Ex-Member, PSEB was of the view that the norm of 1650 kwh/kw/year for agriculture consumption is reasonable. He desired that the study being conducted by PAU needs to be expedited. Sri Mehra suggested installation of capacitors to reduce T&D losses. Sri Mehra endorsed the view of the Commission for penalizing the Board for non achievement of the targets fixed for loss reduction. He desired the Commission to take up the matter with the Board regarding the huge difference in the quantum of theft of energy detected as per projections in the ARR/Tariff Petition and amount on this account being reported by them in the press. On employees cost, Sri Mehra was of the view that it is not possible for the Board to reduce these costs and the Board should, therefore, not be penalized on this account. He pleaded for lower generation cost of thermal stations than the one projected by PSEB by reducing auxiliary consumption. He informed that NTPC stations of similar vintage have auxiliary consumption of 6% only, whereas the same is quite high in the Board.
He observed that coal transit losses have come down due to pressure of the Commission, but still the same are well above the levels prevalent in NTPC stations. He further desired the Commission to ascertain from the Board the reasons for wide difference in transit loss at Bathinda and Lehra Mohabat thermal stations when they are almost at the same distance from the coal mines. On the issue of quality of supply to rural /urban areas, Sri Mehra was of the view that there should be no discrimination. Sri Mehra observed that the Board has proposed R&M expenditure at 33% higher than the last year level whereas generation projected is 11% lower, which is not understandable. He also stressed the need for KVAH based tariff which would automatically take care of the power factor of the consumers.
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