(1). Every Utility shall, within 90 days after the commencement of these regulations or the grant of the licensee or the beginning of the regulated business, prepare an accounting a Manual containing-
(i) definitions of terms and expressions used in the Manual;
(ii) introduction of the Utility;
(iii) an overview of the Utility’s organizational structure;
Compendium of HPERC Regulations, March 2021 3
(iv) a clear categorization of the regulated and unregulated activities of the Utility with further segregation of regulated activities covered under more than one Regulatory Commission;
(v) a list of the entities within the group, relationship of the Utility with other group Companies or subsidiaries or related parties in terms of common resources, etc.;
(vi) an overview of the financial accounting system, which may include policies relating to treating an expense item as major or minor, capitalization, depreciation, Return on Equity, security deposits, provision for bad and doubtful debts, apportionment of common assets, common liabilities, common expenses and common revenue, etc., with respect to the Regulatory Accounts;
(vii) description of the treatment of related party transactions, allocation of common expenses and allocation of jointly used assets;
(viii) products, services or geographical areas which shall be treated as separate segments while preparing regulatory accounts;
(ix) segmentation of regulated business-
(a) generation – hydro, thermal, renewables i.e. small hydro, solar, wind, bio etc. or any other;
(b) transmission;
(c) SLDC;
(d) distribution - wheeling and retail supply business and
(e) trading:
Provided that where regulated business is carried out in more than one State, State-wise segmentation of the regulated business shall be given:
Provided further, that in case transmission and/or distribution of electricity is carried out under separate transmission and/or distribution licences within the same State, Licence wise segmentation of transmission and/or distribution business shall be given;
(x) Accounting System followed for each segment of the regulated business, referred to clause (ix), and recording of the accounting separation information and reports, which may include list of cost and profit centres, linkages of financial heads to cost and profit centres;
(xi) description of studies, surveys and model employed in cost apportionment and allocation process; and
(xii) procedure for maintenance and updating Manual.
(2) The utility shall subject the Accounting Manual to the Commission by the end of the financial year and all subsequent changes in the said Manual, together with the reasons thereof shall also be submitted to the Commission.
4 Compendium of HPERC Regulations, March 2021