The Commission shall adopt multiyear tariff framework for approval of ARR and expected revenue from tariffs and charges for the control period. The multiyear tariff framework shall be based on the following: -
(a) Business plan of the distribution licensee for the entire control period to be submitted to the Commission for approval, prior to the beginning of the control period;
(b) Applicant’s forecast of expected wheeling tariff and retail supply tariff for each year of the control period, based on reasonable assumptions of the underlying financial and operational parameters, as submitted in the business plan;
(c) Trajectory for specific parameters shall be stipulated by the Commission, where the performance of the applicant is sought to be improved through incentives and disincentives;
1 [(cc) “Uncontrollable parameters” for a distribution licensee shall interaliacomprise of the following factors, which were beyond the reasonable control of the licensee, and could not be mitigated by the licensee:—
(a) Force Majeure events,
(b) Change in Law, judicial pronouncements and Orders of the Central Government, State Government or Commission,
(c) Variation in the number or mix of Consumers or quantities of electricity supplied to Consumers,
(d) Variation in the cost of power purchase due to variation in the rate of power purchase from approved sources, subject to clauses in the power purchase agreement or arrangement approved by the Commission,
(e) Variation in fuel cost,
(f) Change in power purchase mix,
(g) Inflation,
(h) Transmission Charges,
(i) Variation in market interest rates for long-term loans,
(j) Taxes and Statutory levies,
(k) Taxes on income,
(l) Income from the realisation of bad debts written off:
Provided that where the applicant believes, for any variable not specified above, that there is a material variation or expected variation in performance for any Financial Year on account of uncontrollable factors, such applicant may apply to the Commission for inclusion of such variable and the Commission may incorporate the same, under this regulation for such Financial Year:]
2 [(d) annual performance review (APR) shall be conducted for the variations in performance on account of uncontrollable parameters for each year of the control 1 Subs. vide Not. HPERC-F(1)-1/2018 dated 22nd November, 2018 published in R.H.P. dated 27th November, 2018 at p. 6265-6277.Before its substitution it stood as under:- “Uncontrollable parameters shall include power purchase and power sale by the distribution licensee;” 2 Cls. (d) and (dd) subs. for Clause (d) 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 Cls.(d) read as under:- Compendium of HPERC Regulations, March 2021 7 period vis-à-vis the ARR approved in the first year of the control period for those years;
(dd) mid-term performance review (MPR) shall be conducted for the year after the mid-year of the control period and shall comprise the annual performance review for that year on account of uncontrollable parameters and for the variations in performance on account of controllable parameters for the control period vis-à- vis the ARR approved in the first year of the control period;]
(e) Profit sharing shall be applied on the profits arising from the distribution licensee’s better performance vis-à-vis distribution loss targets and targets for the other controllable parameters specified by the Commission. The distribution licensee shall be free to utilise its share in the profit.
1 [(f) Variation in revenue/cost on account of uncontrollable parameters shall be trued up annually during the annual performance review.]