Sri K Sreerama Murthy, Member
Sri Surinder Pal, Member
Dated:
O.P.
No. 05 of 2005
1. The Anakapalli Rural Electric Co-operative Society Limited 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.2,825.49 lakhs under OCFA
and Rs.
214.78 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.2,750.49 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. 2.50 lakhs
towards average cost of stores and Rs. 32.00 lakhs towards average cash and bank balance. The Commission admits Rs.2.67 lakhs towards average cost of stores representing one
month’s average repairs and maintenance expenses and Rs.32.86 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. 1,234.82 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
projections by the RESCO towards Consumer Security Deposits (Rs.75.35 lakhs) and Development / Tariff & Dividend Reserve (Rs.85.60
lakhs) have been allowed as per its filing. Interest on consumer security deposits
(Rs.18.41 lakhs) has not, however, been considered on
the negative side of capital base. The
RESCO has pre-closed its loans from REC and loans from Public Enterprises
Department, Govt. of A.P.
(v) Summary of Capital Base:
With
the above changes, the Net Capital Base of Rs.
1,660.59 lakhs projected by the RESCO comes down to Rs. 1605.03 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 |
2825.49 |
2750.49 |
|
2 |
Capital Works in Progress |
214.78 |
214.78 |
|
3 |
Working Capital |
|
|
|
|
a) Average Cost of Stores |
2.50 |
2.67 |
|
|
b) Avg Cash and Bank balance |
32.00 |
32.86 |
|
A |
Total of positive
elements of Capital Base |
3074.77 |
3000.80 |
|
|
Negative Elements |
|
|
|
1 |
Accumulated Depreciation |
1234.82 |
1234.82 |
|
2 |
Approved Loans |
0.00 |
0.00 |
|
3 |
Consumer Security Deposit |
75.35 |
75.35 |
|
4 |
Interest on consumer security deposits |
18.41 |
0.00 |
|
5 |
Development/Tariff & Dividend Reserve |
85.60 |
85.60 |
|
B |
Total of negative
elements of Capital Base |
1414.18 |
1395.77 |
|
|
Net Capital Base (A-B) |
1660.59 |
1605.03 |
(b) Expenditure Items
(i) Wages
and Salaries:
The
RESCO made a projection of Rs.265.00 lakhs. Based on
the additional information furnished, an amount of Rs.262.00 lakhs is approved by the Commission under this Head.
(ii) Administration and General
Expenses and Repairs and Maintenance :
The
RESCO made projections of Rs.45.00 lakhs and Rs. 40.00 lakhs under these heads
which are reduced to Rs.38.00 lakhs and Rs.32.00 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 Rent, Rates & Taxes (Rs.
2.50 lakhs), legal charges (Rs.
1.00 lakh) and Auditors' Fees (Rs.
4.50 lakhs) have been allowed without any change
based on past trend. Depreciation (Rs.154.00 lakhs),
Contribution to Employee funds (Rs.40.00 lakhs),
Contribution to Contingencies Reserve (Rs. 5.00 lakhs), Interest on Security Deposits (Rs. 2.10 lakhs) and other expenses (Rs.30.00 lakhs)
have been adjusted to the actual calculated figures of Rs.154.38 lakhs, Rs.36.00 lakhs, Rs.6.88 lakhs, Rs.4.52 lakhs and Rs.19.30
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. 561.08 lakhs
as against the RESCO's projection of Rs. 589.10 lakhs as detailed
below:
Table – 2
Statement of
Expenditure
Rs.
in Lakhs
|
Sl. No. |
Particulars |
RESCO |
APERC |
|
1 |
Wages and Salaries |
265.00 |
262.00 |
|
2 |
Admn & General Expenses |
45.00 |
38.00 |
|
3 |
Repairs and Maintenance |
40.00 |
32.00 |
|
4 |
Rent, Rates & Taxes |
2.50 |
2.50 |
|
5 |
Approved Loan Interest |
0.00 |
0.00 |
|
6 |
Depreciation |
154.00 |
154.38 |
|
7 |
Contbn. to Employee Funds |
40.00 |
36.00 |
|
8 |
Contbn. to Contingency Reserve |
5.00 |
6.88 |
|
9 |
Interest on Security Deposit |
2.10 |
4.52 |
|
10 |
Legal Charges |
1.00 |
1.00 |
|
11 |
Auditors' Fees |
4.50 |
4.50 |
|
12 |
Other Expenses |
30.00 |
19.30 |
|
13 |
Total Expenditure (excluding purchase of energy) |
589.10 |
561.08 |
(c) Reasonable Return:
Based on the
above changes to the Capital Base (accepted by the RESCO), the reasonable return
woks out to Rs.256.80 lakhs as against Rs.266.12 lakhs projected by it.
The RESCO has
projected an amount of Rs. 201.20 lakhs
(including customer charges) 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. 616.68 lakhs as against Rs. 654.02 lakhs projected by the RESCO. This is after taking into
account the Reasonable Return of Rs. 256.80 lakhs and Non-Tariff income of Rs.201.20 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.20.00 lakhs towards the efficiency gains, considering its total
power demand of 90 MU and efficiency already achieved during the last five
years. Thus, the net aggregate revenue requirement works out to Rs.596.68 lakhs.
(g) Expected revenue from charges:
The RESCO has
filed the Expected Revenue from Charges at Rs.1187.21 lakhs
(excluding customer charges) based on current Tariff Rates effective from
01-04-2004 except for agricultural category, where the revenue has been revised
by the RESCO 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 |
32.33 |
595.66 |
32.33 |
595.66 |
|
2 |
LT II - Non-Domestic |
3.36 |
180.82 |
3.36 |
180.82 |
|
3 |
LT III - Industrial |
7.30 |
338.68 |
7.30 |
338.68 |
|
4 |
LT IV - Cottage Industries |
0.03 |
0.61 |
0.03 |
0.61 |
|
5 |
LT V - Irrigation and Agriculture |
28.75 |
8.86 |
28.75 |
8.86 |