The quality of supply and the customer service parameters shall be monitored as per the norms to be laid down by the Commission separately from time to time. For certain parameters as mentioned in regulation 0 of these regulations, the Commission shall monitor licensee’s performance with respect to the targets specified.
[ 3 “11. True Up.- (1) The true up across various parameters shall be conducted by the Commission, for the previous years for which the actual/ audited accounts are made available by the distribution licensee, at the times and as per principles stated below:- 1 Subs. vide Not. No. HPERC/F(5)(3)(1)(Retail) dated 1 st November, 2013 published in the R H.P.
dated 4 th November, 2013 at p. 4579-4596 and before its substitution sub-regulation (6) read as under:
“(6) The Commission shall review the actual capital expenditure incurred and capitalisation at the end of each year of the control period vis-à-vis the approved capital expenditure and capitalisation schedule. In the normal course, the Commission shall not revisit the approved capital investment plan (capital expenditure and capitalisation schedule) during the control period and adjustment to depreciation, interest on capital loan and return on equity for the actual capital expenditure incurred and capitalisation vis-à-vis approved capital investment plan (capital expenditure and capitalisation) shall be done at the end of the control period.” 2 Ins. sub-regulation 8 vide Not. HPERC-F(1)-1/2018 dated 22nd November, 2018 published in R.H.P.
dated 27th November, 2018 at p. 6265-6277.
3 Subs. vide Not. No. HPERC/F(5)(3)(1)(Retail) dated 1 st November, 2013 published in the R.H.P.
dated 4 th November, 2013 at p. No 4579 to 4596 and before its substitution regulation 11 read as under:
“(11) True Up
(1) The true up across various controllable and uncontrollable parameters shall be conducted as per principles stated below: -
(a) Variation in revenue / expenditure on account of uncontrollable sales and power purchase shall be trued up every year. Truing-up shall be carried out based on the actual/audited information and prudence check by the Commission:
Provided that if such variations are large, and it is not feasible to recover in one year alone, the Commission may take a view to create a regulatory asset, as per the guidelines provided in clause 8.2.2 of the National Tariff Policy:;
Provided further that under business as usual conditions, the Commission, to ensure tariff stability, may include the opening balances of uncovered gap / trued-up costs in the subsequent control period’s ARR instead of including in the year succeeding the relevant year of the control period after providing for transition financing arrangement or capital restructuring.
(b) for controllable parameters - Compendium of HPERC Regulations, March 2021 11 (A) at the times -
(i) for the previous years of the previous control period for which true-up has not been carried out and/or for the previous control period:- true up shall be done along with the MYT/APR petition(s) filed for/during the control period;
(ii) for the previous years of the control period:- true up shall be done along with the annual performance reviews (APRs) filed during the control period;
(iii) for the control period and/or for the years of the control period for which true-up is not carried out during the control period- true up shall be done along with the MYT/APR petition(s) filed for/during the next control period;
Provided that the Commission may entertain true up proposals even prior to the above times if the accounts of the licensee are finalized;
(B) as per principles –
(a) Variation in revenue / expenditure on account of uncontrollable sales and power purchase shall be trued up every year. Truing-up shall be carried out based on the actual/audited information and prudence check by the Commission:
Provided that if such variations are large, and it is not feasible to recover in one year alone, the Commission may take a view to create a regulatory asset, as per the guidelines provided in clause 8.2.2 of the National Tariff Policy:
Provided further that under business as usual conditions, the Commission, to ensure tariff stability, may include the opening balances of uncovered gap/trued-up costs in the subsequent control period’s ARR instead of including in the year succeeding the relevant year of the control period after providing for transition financing arrangement or capital restructuring;
(b) for controllable parameters -
(i) any surplus or deficit on account of the O&M expenses shall be to the account of the licensee and shall not be trued up in ARR unless such is treated as uncontrollable by the Commission in accordance with these regulations;
(ii) any surplus or deficit on account of the distribution losses shall be shared between the licensee and the consumers in accordance with these regulations;
(iii) during mid-term performance review and during the end of the control period true up –
(i) any surplus or deficit on account of O&M expenses shall be to the account of the licensee and shall not be trued up in ARR; and
(ii) at the end of the control period – I. the Commission shall review actual capital investment vis-à-vis approved capital investment.
II. depreciation and financing cost, which includes cost of debt including working capital (interest), cost of equity (return) shall be trued up on the basis of actual/ audited information and prudence check by the Commission.
(2) Notwithstanding anything contained in these regulations, the gains or losses in the controllable items of ARR on account of force majeure factors after adjusting for proceeds from any insurance scheme, if any, shall be passed on as an additional charge or rebate in ARR over such period as may be mentioned in the order of the Commission.” 12 Compendium of HPERC Regulations, March 2021
(i) O&M expenses treated as uncontrollable may be trued-up on the basis of actual/ audited information and prudence check by the Commission;
(ii) any surplus or deficit on account of variations in the costs and targets of distribution losses treated as uncontrollable, may be truedup on the basis of actual/audited information and prudence check by the Commission and shall be shared between the licensee and the consumers in accordance with these regulations;
(iii) the Commission shall review the actual capital investment vis-à-vis approved capital investment;
(iv) depreciation and financing cost, which includes cost of debt including working capital (interest), cost of equity (return) shall be trued up on the basis of actual/ audited information and prudence check by the Commission.
1[(2) The distribution licensee, for the approved true-up of any year over and above that approved in the Tariff Order for that year, shall be entitled to a carrying cost at one (1) Year weighted average State Bank of India (SBI) MCLR / any replacement thereof as notified by RBI for the time being in effect applicable for one (1) Year period of the relevant Year plus 300 basis points and for any true-up resulting in less than that approved in the Tariff Order for that year, the carrying cost shall be recovered at the same rate.]
(3) Notwithstanding anything contained in these regulations, the gains or losses in the controllable items of ARR on account of force majeure, change in law and change in taxes and duties after adjusting for proceeds from any insurance scheme, if any, shall be passed on as an additional charge or rebate in ARR over such period as may be mentioned in the order of the Commission.