The baseline values (operating and cost parameters) for the base year of the control period shall be determined by the Commission and shall be based on the approved values by the Commission, the latest audited accounts, estimate of the actuals for the relevant year, prudence check and other factors considered appropriate by the Commission:
Provided that in case of substantial difference between the estimates earlier provided/considered for determination of baseline values and the actual audited accounts, the Commission may re-determine the baseline values for the base year.
3 [7. Targets for Controllable Parameters.—The Commission shall set targets for each year of the control period for the items or parameters that are deemed to be “(d) Annual review of performance shall be conducted vis-à-vis the approved forecast and categorization of variations in performance into controllable factors and uncontrollable factors;” 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 Cls. (f) read as under:- “(f) Variation in revenue/cost on account of uncontrollable factors like sales and power purchase shall be trued up annually.” 2 Ins. clause (5-a) vide Not. HPERC-F(1)-1/2018 dated 22 nd November, 2018 published in R.H.P.
dated 27 th November, 2018 at p. 6265-6277.
3 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:- 8 Compendium of HPERC Regulations, March 2021 “controllable”. The “Controllable parameters” for a Distribution Licensee shall comprise of the factors which were within the control of the Licensee, shall interalia include—
(a) Variations in Capitalisation on account of time and/or cost overruns/ efficiencies in the implementation of a capital expenditure project not attributable to an approved change in scope of such project, change in statutory levies or force majeure events;
(b) Variation in Financing cost which includes cost of debt and cost of equity;
(c) Variations in Distribution losses which will include both technical and commercial losses of Distribution Licensee and shall be measured as the difference between total energy input for sale to all its consumers and sum of the total energy billed in its licence area in the same year;
(d) Variations in performance parameters;
(e) Failure to meet the standards specified in HPERC (Distribution Performance Standards) Regulation, 2010;
(f) Variations in labour productivity;
(g) Variation in Bad and doubtful debts, in accordance with the provisions of Regulation 34-A;
(h) Variation in Operation and Maintenance Expenditure which includes employee expenses, repairs and maintenance expenses, administration and general expenses and other miscellaneous expenses viz. audit fees, rents, legal fees etc.; and
(i) Variation in Depreciation:
Provided that the Commission may, while setting the targets, also incorporate suitable mechanisms for automatic adjustments in these targets in case of substantial changes in the basic assumptions/inputs taken into account and may also provide for the requirements in respect of such components of the O&M expenditure as it may consider appropriate as per actual:
Provided further that, based upon abnormal variations in controllable parameters (distribution losses, operation and maintenance expenditure, financing cost and depreciation) and for reasons beyond the control of the distribution licensee, the Commission may, at the time of mid-term performance review, review the approved expenditure vis-a-vis “Targets for Controllable Parameters.- The Commission shall set targets for each year of the control period for the items or parameters that are deemed to be “controllable” and which will include-
(a) Distribution losses, which shall be measured as the difference between total energy input for sale to all its consumers and sum of the total energy billed in its licence area in the same year;
(b) Operation and Maintenance Expenditure which includes employee expenses, repairs and maintenance expenses, administration and general expenses and other miscellaneous expenses viz. audit fees, rents, legal fees etc;
(c) Financing cost which includes cost of debt including working capital (interest), cost of equity (return); and
(d) Depreciation 3 [Provided that the Commission may, while setting the targets, also incorporate suitable mechanisms for automatic adjustments in these targets in case of substantial changes in the basic assumptions/inputs taken into account and may also provide for the requirements in respect of such components of the O&M expenditure as it may consider appropriate as per actual:
Provided further that, based upon abnormal variations in controllable parameters (distribution losses, operation and maintenance expenditure, financing cost and depreciation) and for reasons beyond the control of the distribution licensee, the Commission may, at the time of mid-term performance review, review the approved expenditure vis-à-vis the actual expenditure for these controllable parameters and revise the targets set for the balance years of the control period.” Compendium of HPERC Regulations, March 2021 9 the actual expenditure for these controllable parameters and revise the targets set for the balance years of the control period.]