THE HUKERI RURAL ELECTRIC CO-OPERATIVE SOCIETY LTD., HUKERI

Application for Annual performance Review for FY-17

Registered Office, HUKERI

Hukeri Taluka Belagavi Dist-591309

Karnataka State

Accts/2017-18/4146 Date:28-11-2017

To,

The Receiving Officer,

Karnataka Electricity Regulatory Commission

6th & 7th Floor, Mahalaxmi Chambers,

No-9/2, M.G.Road,

Bengaluru – 56001,

Sir,

Sub:- Application for approval of Annual Performance review of

Accounts of our Society for FY-2016-17 and Revised ERC

for FY-19 and Retail Tariff Application for FY-19

Ref: Your letter no B/08//17/1295 dated 07-11-2017.

We are herewith submitting an application for approval of Annual

Performance Review of Accounts of our Society for the financial year-2016-17

in six sets along with Affidavit supporting the same for the approval of the

Hon’ble Commission.

We are also herewith submitting the ERC for FY-19 and Retail Tariff

Application for FY-19 of our Society in six sets with Affidavit supporting the

same & one soft copy of the same for kind consideration & approval of the

Hon’ble Commission.

Thanking you,

Yours faithfully

Managing Director

‘A’

BEFORE KARNATAKA ELECTRICITY REGULATORY COMMISSION

BENGALURU.

Filing No………… Case No………… IN THE MATTER OF An Application for approval of Annual Performance Review (APR) along

with the audited Accounting Statements of Hukeri Rural Electric Co-

operative Society Limited, under the provisions of the Electricity Act,

2003 and KERC (Terms and Conditions for Determination of Tariff for

Distribution and Retail Sale of Electricity) Regulations, 2006, for FY

2016-17.

AND IN THE MATTER OF

Hukeri Rural Electric Co-operative Society Limited, a Co-operative

Society incorporated under the provisions of the Karnataka Co-operative

Societies Act, 1959, having its registered Office at HUKKERI ---

APPLICANT

THE APPLICANT ABOVE NAMED MOST RESPECTFULLY

SHOWETH THAT:

1. The Applicant is a Co-operative Society, incorporated under the

provisions of the Karnataka Co-operative Societies Act, 1959 and a

‘Distribution and Retail Supply Licence” under Section 14 of the

Electricity Act, 2003.

2

2. The Applicant is hereby submitting its audited Accounting

Statements for the financial Year 2016-17 for the scrutiny of the

Hon’ble Commission and also for the purpose of Annual Performance

Review as provided under Regulation 2.8 of the Karnataka Electricity

Regulatory Commission (Terms and Conditions for Determination of

Tariff for Distribution and Retail Sale of Electricity) Regulations, 2006

(hereinafter referred to as “the MYT Regulations”) or truing up

exercise to be conducted by the Hon’ble Commission, in compliance

of the directions of the Hon’ble Commission.

3. The Applicant submitted that in the tariff order dated 30-03-2016,

Hon’ble Commission had approved. 312.57 MU of power purchase at

the cost of Rs. 12120.84 lakhs and sale of 260.21(including AEQUS

14.39) MU of energy resulting in 52.36 MU energy loss, which

translates into 16.75% which includes transmission loss also.

Distribution loss and transmission loss of 3.8%, As against the above

approval, the Society has achieved 312.24 MU of power purchase at

the cost of Rs. 15530.51 lakhs (including the power purchase cost &

interest of previous period amounting to Rs. 3350.25 lakhs) and sale

of 265.63 MU of energy resulting in 46.61 MU loss , which translates

into 14.93% T & D loss.

4. The audited Accounting Statements of the applicant for the Financial

Year 2016-17 shows a revenue loss of Rs. 3204.80 Lakhs, after taking

into account a sum of Rs. 8642.35 lakhs IP set and BJ/KJ subsidy

accounted in the books of account of the Society. The Government of

3

Karnataka is required to pay a sum of Rs. 4760.57 lakhs towards

outstanding Subsidy for the period ending of FY-17. The Government

of Karnataka may be ordered to release this amount, at the earliest

with carrying costs.

5. The Applicant respectfully submits before the Hon’ble Commission

that Share Capital at the beginning of FY 17 is Rs. 594.65 lakhs. The

Commission in its successive Tariff Order did not allow RoE for the

reason that accumulated losses have eroded the Equity Capital. The

Commission taking in to consideration the efficiency of the Applicant

in its operation, kindly to allow 15.5% Return on Equity on the

opening balance grossed up with applicable tax at 30% and Cess of

3% of Rs. 131.84 lakh as a special case.

6. The Applicant prays that notional interest on working capital and

other savings made by the Society may be allowed to be retained by

the Society as reward for the efficiency, as provided under the MYT

Regulations. The Commission in their Order dated 30-03-2016 had

allowed interest on working capital of Rs. 251.39 lakh for FY 17

which may kindly be retained in the Annual performance Review for

FY 17 and determine the ARR for FY 19 accordingly.

7. It is respectfully submitted before this Honourable Commission that

the following tables indicates the various items of revenue

requirements as approved by the Commission and also, as per

Audited accounts/notional item like interest on working capital for

FY 2016-17.

4

Rs. in lacs

Particulars FY 2016-17

(Approved)

FY 2016-17

(As per

Audited Accounts)

Difference Remarks

Power Purchase Cost 12120.84 15530.51 3409.67

Employee Expenses

1257.28 1134.86 (122.42)

R& M Expenses

A & G Expenses

Depreciation 111.70 119.28 7.58

Interest and Finance

Charges

Interest on Loan Capital 22.59 8.40 (14.19)

Interest on Working Capital 251.39 *251.39 - Notional

Interest on Consumer

Deposit

96.73 84.95 (11.78)

Return on Equity 0 *131.84 131.84 Notional

Less: Other Income

including revenue from sale

of power to AEQUS

846.17 960.61 114.44

Total Expenses 13014.36 16300.62 3286.26

Add Surplus of FY 2015

carried forward

1211.94 1211.94 - For Tally

purpose

Regulatory Asset of FY 17

as per Tariff order dated

30-03-2016

50.00 50.00 - For Tally

purpose

Net ARR 11752.42 15038.68 3286.26

It is submitted before the Hon’ble Commission to allow Rs.32.8626

Crores in the ARR of FY19 which has been factored in the application for

revised ARR and tariff application filed alongside of this application for

the kind consideration of the Hon’ble Commission.

5

8. The Applicant Hukkeri RECS respectfully submit to this Hon’ble

Commission that the Subsidy due from the State Government to the

Applicant is mounting year on year and no interest is calculated and

paid by the Government. Whereas Hubbali Electricity Supply

Company is claiming interest year on year which has the cascading

effect of inflating the power purchase cost from HESCOM. It is

therefore, submitted that a suitable direction may kindly be issued for

waiving the interest claimed by the Hubballi Electricity Supply

Company from time to time as Applicant is not receiving any interest

on the subsidy due. It is also earnestly requested by the Applicant that

Hon’ble commission to give direction to Government of Karnataka to

release Rs. 4760.57 lakh which is due as on 31-03-2017. The details

of the dues to be received from the Government was taken up vide

our letter dated 07-08-2017 which is placed in the Petition and

marked as Annexure B

9. The Applicant is ready and willing to provide any further

information/clarifications, in due course, if sought by the Hon’ble

Commission.

6

PRAYER

10. WHEREFORE, in the light of the above submissions, the applicant

prays that this Hon’ble Commission may be pleased to :

(i) To allow gap of Rs.32.8626 Crores of the year 2016-17 in the

ARR of FY19 which has been factored in the application for

revised ARR and tariff application filed alongside of this

application for the kind consideration of the Hon’ble

Commission.

(ii) Approve the annexed audited Accounting Statements of the

Applicant for the Financial Year 2016-17;

(iii) Direct the Government of Karnataka to release the outstanding

Subsidy amount payable to the Applicant amounting to Rs

4760.57 lakhs as per Audited Accounts;

(iv) Allow the items Interest on working capital and RoE for the

year 2016-17 as mentioned in para 5 & 6 under revenue

requirement which are normative in nature which are allowed

by the MYT Regulations as a reward for the efficiency,

(v) Allow the recovery of filing fees, costs and other expenses to be

incurred in this regard as a pass through;

(vi) Pass such other Orders as the Hon’ble Commission deems fit

under the facts and circumstances of the case; and

(vii) Allow this application, in the interest of justice.

Place: Hukkeri Sd/-

Date: 28-11-2017 Applicant

7

BEFORE KARNATAKA ELECTRICITY REGULATORY COMMISSION

BENGALURU.

Filing No………… Case No………… IN THE MATTER OF

An Application for approval of Annual Performance Review (APR) along

with the audited Accounting Statements of Hukeri Rural Electric Co-

operative Society Limited, under the provisions of the Electricity Act,

2003 and KERC (Terms and Conditions for Determination of Tariff for

Distribution and Retail Sale of Electricity) Regulations, 2006, for FY

2016-17.

AND IN THE MATTER OF

Hukeri Rural Electric Co-operative Society Limited, a Co-operative

Society incorporated under the provisions of the Karnataka Co-operative

Societies Act, 1959, having its registered Office at HUKKERI

---APPLICANT

AFFIDAVIT

I, Sanjeevkumar S Pujari, son of Siddappa, aged about 50 years working

as Managing Director of the Applicant and residing at Hukkeri, do hereby

solemnly affirm and state on oath follows.

1. I am the Managing Director of the Applicant Society and I am duly

authorized by the said Applicant to make this affidavit. I am

conversant with the facts of the matter and hence I am competent

to depose to this Affidavit.

8

2. The averments made in paragraphs 1 to 10 of the Application

accompanying this Affidavit, herein now marked with letter “A” are

true to the best of my knowledge, information and belief.

3. I further say that the statements made and data presented in the

aforesaid Application are true to the best of my knowledge, as per

records of the Applicant Society and based on estimations.

Further, to my knowledge and belief, no material information has

been concealed in the aforesaid Application.

Solemnly affirmed at Hukkeri on this 28th day of November 2017

that the contents of the above affidavit are true to my knowledge,

no part of it is false and nothing material has been concealed

therefrom.

Place: Hukkeri DEPONENT

Date : 28-11-2017

Identified by me:

Annexure B

Month Units Actual Demand Amount received

from GovtExcess/ Less

Aug-08 8345843 5288978

Sep-08 4553183 3666115

Oct-08 9123104 5627389 6800000 EN 55 PSR 2008 Bangalore 03-11-08

Nov-08 8847684 5505467 6200000 EN 55 PSR 2008 Bangalore 03-11-08

Dec-08 9507680 5801857 5600000 EN 55 PSR 2008 Bangalore 21-11-08

Jan-09 10381721 6182200 5700000 EN 55 PSR 2008 Bangalore 17-01-09

Feb-09 9260943 5702880 6200000 EN 55 PSR 2008 Bangalore 11-02-09

Mar-09 10632532 6312422 1600000 EN 55 PSR 2008 Bangalore 24-03-09

Total (Aug-08 to

Mar-09)70652690 44087308 32100000 11987308

Apr-09 12307588 7008155 5800000 EN 37 PSR 2009 Bangalore 15-04-09

May-09 10622939 6321964 5800000 EN 37 PSR 2009 Bangalore 30-05-09

Jun-09 7748526 5079750

Jul-09 5197029 3984030

Aug-09 10453564 6253635 7400000 EN 37 PSR 2009 Bangalore 11-08-09

Sep-09 6905401 4722849

Oct-09 6901142 4791179 6300000 EN 37 PSR 2009 Bangalore 26-10-09

Nov-09 7712314 5090903

Dec-09 10796991 6418264 5500000 EN 37 PSR 2009 Bangalore 03-12-09

Jan-10 10075458 6108994 3600000 EN 37 PSR 2009 Bangalore 18-01-10

Feb-10 10931278 6475823 6300000 EN 37 PSR 2009 Bangalore 31-03-10

Mar-10 13042371 7425978 4700000 EN 37 PSR 2009 Bangalore 31-03-10

Total (Apr-09 to

Mar-10) 112694601 69681524 45400000 24281524

Apr-10 12357177 7090077.33 16300000 EN 18 PSR 2010 Bangalore 12-05-10

May-10 12972770 7381153.50 3000000 EN 18 PSR 2010 Bangalore 12-05-10

Jun-10 8783559 5640988.59 4500000 EN 18 PSR 2010 Bangalore 19-05-10

Jul-10 8653355 5548249.07 20000000 EN 18 PSR 2010 Bangalore 09-06-10

Aug-10 8746409 5611469.60 10000000 EN 18 PSR 2010 Bangalore 28-06-10

Sep-10 7188220 4948385.99 16300000 EN 18 PSR 2010 Bangalore 24-07-10

Oct-10 7270751 5061204.52 40000000 EN 18 PSR 2010 Bangalore 17-08-10

Nov-10 9100117 24878345.29 20000000 EN 18 PSR 2010 Bangalore 30-08-10

Dec-10 13923149 37070025.83 30000000 EN 18 PSR 2010 Bangalore 30-09-10

40000000 EN 18 PSR 2010 Bangalore 08-11-10

30000000 EN 18 PSR 2010 Bangalore 08-12-10

Jan-11 12796770 34237964.93 5000000 EN 18 PSR 2010 Bangalore 07-02-11

Feb-11 11948038 32103256.88 5000000 EN 18 PSR 2010 Bangalore 01-03-11

Mar-11 12053418 32435703.11 7400000 EN 18 PSR 2010 Bangalore 24-03-11

Total (Apr-10 to

Mar-11) 125793733 340644277 247500000 93144277

Apr-11 11772088 31412491 20000000 EN 22 PSR 2011 Bangalore 26-04-11

May-11 12162985 32360723 40000000 EN 22 PSR 2011 Bangalore 12-05-11

Jun-11 8094956 22199637 40000000 EN 22 PSR 2011 Bangalore 04-06-11

Jul-11 9789798 26465377 40000000 EN 22 PSR 2011 Bangalore 01-07-11

40000000 EN 22 PSR 2011 Bangalore 26-07-11

Aug-11 9516523 25789755

Sep-11 7062258 19679431 40000000 EN 22 PSR 2011 Bangalore 16-09-11

Oct-11 9760196 26562154

Nov-11 13685216 36293161 50000000 EN 22 PSR 2011 Bangalore 21-11-11

Dec-11 14538077 55383031 100000000 EN 22 PSR 2011 Bangalore 14-12-11

Jan-12 14939522 56922962 50000000 EN 22 PSR 2011 Bangalore 17-01-12

91076223

Feb-12 14609260 55664476 50000000 EN 22 PSR 2011 Bangalore 25-02-12

Mar-12 16440660 62638797 14600000 EN 22 PSR 2011 Bangalore 29-03-12

Total (Apr-11 to

Mar-12) 142371539 542448218 484600000 57848218

Apr-11 to Nov-11 difference bill

Rs.2.50 to Rs.3.81

THE HUKKERI RURAL ELECTRIC CO-OPERATIVE SOCIETY LTD., HUKKERI

Statement showing Actual Demand, Amount received from Government and the balance to be received from Government up to 10 HP

(IP Sets) from August-2008 to Mar-2017

Government order No. & date

Apr-10 to Oct-10 difference

bill of Rs-2.10per Unit 138637452.00

Month Units Actual Demand Amount received

from GovtExcess/ Less Government order No. & date

Apr-12 13958649 53178685 50000000 EN 14 PSR 2012 Bangalore 23-04-12

May-12 16928886 64500543 50000000 EN 14 PSR 2012 Bangalore 09-05-12

Jun-12 13672803 52092871 50000000 EN 14 PSR 2012 Bangalore 05-06-12

Jul-12 14131404 53836127

Aug-12 14017952 53404930 50000000 EN 14 PSR 2012 Bangalore 06-08-12

Sep-12 12619035 48082711 90000000 EN 14 PSR 2012 Bangalore 06-09-12

Oct-12 13116822 53913807 50000000 EN 14 PSR 2012 Bangalore 04-10-12

Nov-12 11330600 46568766 40000000 EN 14 PSR 2012 Bangalore 02-11-12

Dec-12 13567364 55761409 110000000 EN 14 PSR 2012 Bangalore 14-12-12

Jan-13 14364464 59033767 20000000 EN 14 PSR 2012 Bangalore 11-01-13

Feb-13 13557606 55723236

Mar-13 13745466 56496139 87500000 EN 14 PSR 2012 Bangalore 01-03-13

Total (Apr-12 to

Mar-13) 165011051 652592991 597500000 55092991

Apr-13 14388192 59131262 40000000 EN 13 PSR 2013 Bangalore 05-04-13

May-13 14896768 61221975 40000000 EN 13 PSR 2013 Bangalore 02-05-13

Jun-13 11154512 51423983 50000000 EN 13 PSR 2013 Bangalore 22-06-13

Jul-13 10865841 50091688 20000000 EN 13 PSR 2013 Bangalore 03-07-13

40000000 EN 13 PSR 2013 Bangalore 29-07-13

Aug-13 13608192 62733393 50000000 EN 13 PSR 2013 Bangalore 28-08-13

Sep-13 14318042 54844683 70000000 EN 13 PSR 2013 Bangalore 16-09-13

Oct-13 11896588 66001909 70000000 EN 13 PSR 2013 Bangalore 08-10-13

Nov-13 15516607 71529362 40000000 EN 13 PSR 2013 Bangalore 07-11-13

80000000 EN 13 PSR 2013 Bangalore 24-11-13

Dec-13 16058766 74035206

Jan-14 14818179 68308240 30000000 EN 13 PSR 2013 Bangalore 08-01-14

100000000 EN 13 PSR 2013 Bangalore 29-01-14

Feb-14 14549160 67076505

Mar-14 18103500 83465556 150000000 EN 13 PSR 2013 Bangalore 03-03-14

3000000 EN 13 PSR 2013 Bangalore 26-03-14

Total (Apr-13 to

Mar-14) 170174347 769863762 783000000 -13136238

Apr-14 16481374 75984679 80000000 EN 17 PSR 2014 Bangalore 19-04-14

May-14 15745334 72581165 80000000 EN 17 PSR 2014 Bangalore 05-05-14

Jun-14 15201661 70077784 60000000 EN 17 PSR 2014 Bangalore 02-06-14

Jul-14 13576416 63534472 70000000 EN 17 PSR 2014 Bangalore 01-07-14

Aug-14 12216200 57171816 30000000 EN 17 PSR 2014 Bangalore 02-08-14

Sep-14 9858996 46041350 60000000 EN 17 PSR 2014 Bangalore 01-09-14

Oct-14 13788170 64394417 40000000 EN 17 PSR 2014 Bangalore 01-10-14

Nov-14 14320332 66874515 70000000 EN 17 PSR 2014 Bangalore 03-11-14

Dec-14 15311532 71500947 80000000 EN 17 PSR 2014 Bangalore 01-12-14

Jan-15 15207788 71019316 50000000 EN 17 PSR 2014 Bangalore 20-01-15

Feb-15 15508836 72421819 60000000 EN 17 PSR 2014 Bangalore 03-02-15

Mar-15 15870336 74114196 100000000 EN 17 PSR 2014 Bangalore 24-03-15

As per KERC APR-13 72523000

Total (Apr-14 to

Mar-15) 173086975 878239476 780000000 98239476

Grand Total 959784936 3297557556 2970100000 327457556

Month Units Actual Demand Amount received

from GovtExcess/ Less Government order No. & date

Apr-15 15774336 73502344 60000000 EN 6 PSR 2015 Bangalore 29-04-15

May-15 17808520 82987435 60000000 EN 6 PSR 2015 Bangalore 18-05-15

Jun-15 14494144 67546424 50000000 EN 6 PSR 2015 Bangalore 04-06-15

Jul-15 18626370 86796602 60000000 EN 6 PSR 2015 Bangalore 01-07-15

Aug-15 13891176 64731616 60000000 EN 6 PSR 2015 Bangalore 03-08-15

Sep-15 11814803 55052179 60000000 EN 6 PSR 2015 Bangalore 01-09-15

Oct-15 10781145 51211484 50000000 EN 6 PSR 2015 Bangalore 15-10-15

Nov-15 18546990 88100577

Dec-15 19713591 93640603 60000000 EN 6 PSR 2015 Bangalore 03-12-15

50000000 EN 6 PSR 2015 Bangalore 05-12-15

10000000 For FY 2014-15 05-12-15

Jan-16 17701511 83372055 50000000 EN 6 PSR 2015 Bangalore 23-01-16

Feb-16 16485430 77649700 53500000 EN 6 PSR 2015 Bangalore 04-02-16

Mar-16 18045076 84988133 60000000 EN 6 PSR 2015 Bangalore 01-03-16

2300000 For FY 2014-15 01-03-16

163900000 EN 6 PSR 2015 Bangalore 08-03-16

14200000 For 2007-08 to 2014-15 26-03-16

Total (Apr-15

to Mar-16) 193683092 909579152 863900000 45679152

Grand Total 1153468028 4207136708 3834000000 373136707.6

Apr-16 16094837 74997764

May-16 15714644 73233358 50000000 EN 25 PSR 2016 Bangalore 07-05-16

50000000 EN 25 PSR 2016 Bangalore 31-05-16

Jun-16 13156364 61307392 50000000 EN 25 PSR 2016 Bangalore 27-06-16

Jul-16 10493572 48775650 50000000 EN 25 PSR 2016 Bangalore 18-07-16

Aug-16 11150178 51852262 50000000 EN 25 PSR 2016 Bangalore 17-08-16

Sep-16 13726446 63831319 40000000 EN 25 PSR 2016 Bangalore 14-09-16

Oct-16 13854225 64145062 60000000 EN 25 PSR 2016 Bangalore 05-10-16

Nov-16 15683983 72618103 50000000 EN 25 PSR 2016 Bangalore 04-11-16

Dec-16 16135457 74712218 80000000 EN 25 PSR 2016 Bangalore 16-12-16

Jan-17 18906149 88268155 50000000 EN 25 PSR 2016 Bangalore 20-01-17

Feb-17 17993836 84031214 50000000 EN 25 PSR 2016 Bangalore 04-02-17

Mar-17 21043302 98247916 33800000 EN 25 PSR 2016 Bangalore 01-03-17

137800000 EN 25 PSR 2016 Bangalore 10-03-17

1500000 EN 25 PSR 2016 Bangalore 27-03-17

Total (Apr-16

to Mar-17) 183952993 856020413 753100000 102920413

Grand Total 1337421021 5063157121 4587100000 476057121

Accounts Officer