A Presentation on ARR Tariff Proposal of SOUTHCO for FY 2007-08 Broad Suggestions

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2. Information Sources. As expressed by SOUTHCO : The Accounts up to September 2005 have been examined according to Companies Act The records up to March 2006 have been evaluated according to Income Tax Rules It has depended upon the inspected accounts upto September 2005 according to Companies Act and records upto March 2006 according to Tax Audit for arrangement of ARR .

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ORISSA ELECTRICITY REGULATORY COMMISSION Together, let us illuminate our lives. A Presentation on ARR & Tariff Proposal of SOUTHCO for FY 2007-08 Broad Suggestions/Objections Feburary 9, 2007

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Data Sources As expressed by SOUTHCO : The Accounts up to September 2005 have been inspected according to Companies Act The records up to March 2006 have been examined according to Income Tax Rules It has depended upon the reviewed accounts upto September 2005 according to Companies Act and records upto March 2006 according to Tax Audit for planning of ARR

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Tariff Structure SOUTHCO has proposed – No adjustment in duty structure No extraordinary levy ought to be permitted to the businesses having own CPPs Demand charge of Rs 200/ - per KVA to be relevant for purchasers having contract request 70 KVA or more under HT Industrial (M) and GP classification The arrangements of tax material to huge enterprises ought to be made appropriate to above shoppers. Settled charges for LT Industrial(S), LT Industrial(M) & PWW to be required on KVA set up of KW. Request charges @ 120% of interest charges to be made material on MD recorded alongside relevant vitality charges for CPPs

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Tariff Structure .. Contd.. The base request charges idea i.e. 80 % of CD ought not be made appropriate to CPPs Service association charges for single stage Domestic/GP customers upto 3 KW load to be reconsidered from Rs 500/ - to Rs. 1000/ - . The rate of work part to be taken by the purchasers identical to Rs. 400/ - where single stage buyers approach and give benefit association materials. Month to month least settled accuses for buyers of contact request < 100 KVA ought to be exacted on CD or MD whichever higher

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Tariff Structure .. Contd.. Levy for medium ventures (LT) might be considered at standard with GP (LT)category. The over drawl vitality ought to be considered in aggregate reason for all DISTCOs together as opposed to considering DISTCO astute over drawl till to Intra-State ABT is executed. Refund @ 2% for installment of BST bills inside three working days from the date of introduction of bill. Deferred Payment Surcharge to be required to LT mechanical (Small) supply classification. Connect the Revenue Gap through mix of increment in Retail Supply Tariff, Reduction in Bulk supply Tariff, Government Subsidy and so forth

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Reconnection Charges

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Legal Issues The ARR application recorded by the licensee is not reasonable under law because of the accompanying deformities: The licensees account has not been reviewed for FY 2004-05 and 2005-06. The licensee has documented the application to befuddle the purchaser open without uncovering the reason for such recording. The intrigued people are being kept in dim and not ready to document compelling complaint and in that capacity the reason for such exercise has been disappointed and in opposition to law and standard of characteristic equity. The system/technique so embraced by the Commission be made basic and cheap. The licensee has neglected to give points of interest as required under controls to the Commission for thought of his application in that capacity the application might be rejected.

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Issues raised by Objectors Military Engineering Services There ought to be oppressive Tariff between purchasers of general class and of the protection. Dissemination Loss: The licensee has pitiably neglected to capture high Distribution misfortune by virtue of unapproved utilization of influence. Circulation misfortune ought to be ascertained by taking proportion of units lost in dispersion framework barring EHT deal. Since, an expansive lump of buyers are still unmetered and having imperfect meters, the proclaimed misfortune by the licensee is farfetched. Accumulation Efficiency: The purchasers are not to be troubled for in-effectiveness of licensees to gather their vitality levy from customers consistently.

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Issues raised by Objectors.. Contd.. AT&C Loss AT&C idea ought not be actualized as it conceals the wastefulness of the Licensee. Control Factor Incentive/Power Factor Penalty Power Factor motivating force must be figured upto two decimal portion Power calculate punishment is required for power consider under 90% & control consider impetus ought to be given for power considers over 90% at a similar rate. Control consider punishment for the little and medium industry buyer might be presented. Cross Subsidy Bench Marks for progressive decrease of cross appropriation might be settled from this year to accomplish Zero level by 2009-10.

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Issues raised by Objectors.. Contd.. Nature of Services: The businesses are put to money related weight for being not able accomplish 80% Load Factor because of the failure of the licensee to supply legitimate quality influence. Because of moderate up degree of the framework and sub-station, the new ventures are discovering hard to get control association. Voltage/recurrence vacillation –The responsibility ought to be settled with the License as far as money related remuneration for the change past standard standards.

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Issues raised by Objectors.. Contd.. Purchaser Classification Electricity tax for poultry might be at standard with agribusiness. The State Government has chosen to characterize poultry as farming Reliance Telecom Ltd. furthermore, Reliance Infocomm Ltd. - Electricity vitality might be charged at Industrial Rates rather than General Purpose rates to the IT & ITES Industries working in the State BSNL Orissa Circle, Bhubaneswar BSNL might be dealt with as a mechanical undertaking as power is considerably used as intention compel for Industrial reason and without supply of force it is unrealistic to run the Telecom administrations. The BSNL is going under the domain of industry according to the decision of the Hon'ble Supreme Court in a few cases. So likewise according to the fund Act, 2002 w.e.f. 01.4.03, the matter of giving Telecommunication Services has been announced as modern undertaking.

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Issues raised by Objectors.. Contd.. Budgetary Issues without the reviewed monetary record and report of the evaluators it is unrealistic for the objector to mention appropriate observable fact on money related matters. Interests owing to bonds: The intrigue ascribed to bonds against arrear of force buys cost and capital estimation of bonds are not payable by buyers.

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Issues raised by Objectors.. Contd.. Interests towards securitization The enthusiasm towards securitization and in addition capital of securitization ought not be passed on to the income necessity for duty proposes. Injecting extra subsidizes - The licensee might be coordinated to imbue extra supports as might be required to pivot the area. Administrative resources - Any misfortunes that the conveyance licensee likes to bring about subsequent to consenting to the requests of the Commission, must be considered with the end goal of figuring the Regulatory Assets. Workers cost - It is recommended that an expansion of around 6% over a year ago's arrangement might be permitted while settling the representatives cost for the FY 2007-08. Past Losses - Past misfortunes ought to be paid through tax by shoppers just if these misfortunes have been caused because of reasons outside the ability to control of licensee and regardless of licensee having executed according to seat marks settled by OERC.

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Issues raised by Objectors.. Contd.. Calculation of Load Factor Load component or utilization proportion to be resolved on the premise of Maximum Demand recorded in the meter as per Regulation 2(y) of the OERC Distribution (Conditions of Supply) Code, 2004. It will be simply and appropriate to compute the heap consider on the premise of Maximum Demand or 80% of the Contract Demand whichever is higher. A lower stack calculate upto half might be recommended for the time of yearly support, which will be mutually chosen by the licensee and the buyer. The ensured stack component of 80% ought to be resolved on a yearly premise. Stack element might be registered independently for pinnacle and off pinnacle hours and the general load element be processed by incorporating the above information. The LF be ascertained in view of the genuine time of accessibility of unlimited power supply amid the month. The MD amid the off pinnacle hours ought not be considered for processing the LF.

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Issues raised by Objectors.. Contd.. Levy Issues The hole of power charges between high utilization and low utilization ought to be lessened to least level, which will dishearten burglary of vitality. Contract Demand Time outline for decreasing the agreement request may not be forced. Arrangement for Rebate Seven crisp mornings might be given from the receipt of the bill to get the refund on provoke installment.

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Issues raised by Objectors.. Contd.. Crisis Supply to CPPs The proposition of interest charges for crisis drawal to CPPs ought to be rejected. Crisis control necessity for CPP/Generating stations are low and for brief span just, it is not under any condition defended to propose request charges for crisis energy to CPP's. Rail-routes: Adoption of single part tax for Railway footing. Legitimate reception of synchronous most extreme interest for Railway footing supply. Railroad might be exempted from installment of Security store. Stipulation of punishment on power consider on the off chance that it goes beneath 0.85 as against 0.90. Stipulation of impetus for development in power figure over 0.85.

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Issues raised by Objectors.. Contd.. Give of alleviation to railroads for power supply interference and in addition low quality of supply. The levy appropriate to Railway Traction ought to mirror the cost of supply with no cross sponsorship. To the extent supply to Railway Traction Sub-station is concerned, the conveyance organizations are not qualified for any wheeling charges as non of their own advantage is included in the supply procedure. Overlooking of most extreme request of TSS's amid encourage augmentations as Railways are obliged to augment bolster from nearby TSS