Tariffs

(1) The holder of each licence granted under this Act shall observe the methodologies and procedures specified by the Commission from time to time, in calculating the expected revenue from charges which it is permitted to recover pursuant to the terms of its licence and in designing tariffs to collect such revenues.

(2) The Commission shall, subject to sub-section (3), have the power to lay down methodology and the terms and conditions for determination of revenue of the licensee under sub section (1) of this section and the determination of tariff, in such other manner as the Commission considers appropriate and for doing so, the Commission shall be guided by the following factors, namely:-

(a) the financial principles and their applications provided in sections 46, 57 and 57-A of the Electricity (Supply) Act, 1948 (54 of 1948) and in the sixth schedule thereto;

(b) in the case of the Board or its successor entities, the principles under section 59 of the Electricity (Supply) Act, 1948;

(c) that the tariff progressively reflects the cost of supply of electricity at an adequate and improving level of efficiency;

(d) the factors which would encourage efficiency, economical use of the resources, good performance and optimum investments and other matters which the Commission considers appropriate for the purpose of this Act ;

(e) the interest of the consumers are safeguarded and at the same time, the consumers pay for the use of electricity in a reasonable manner based on the average cost of supply of energy;

(f) the electricity generation, transmission, distribution and supply are conducted on commercial principles

(g) national and state power plans formulated by the Central or State Government, as the case may be :

Provided that the contracts concluded by the Government of Karnataka and/or the Board with generation and transmission companies prior to commencement of the Act shall be deemed to have been approved by the Commission under the provisions of this Act and shall be given effect by the Commission.

(3) Where the Commission departs from factors specified in the sixth schedule to the Electricity (Supply) Act, 1948 (Central Act 54 of 1948) while determining revenue of the licensee and tariffs, it shall record the reasons therefor in writing.

(4) Any methodology or procedure specified by the Commission under sub-sections (1), (2) (3) above shall be to ensure that the objectives and purposes of the Act are duly achieved.

(5) Any tariff implemented under this Act,-

(a) shall not show undue preference to any consumer of electricity, but may differentiate according to the consumer’s load factor, power factor, and total consumption of energy during any specified period or the time at which supply is required, or the geographical position of any area , the nature of the supply and the purpose for which the supply is required; or paying capacity of category of consumers and need for cross subsidisation; and

(b) shall be just and reasonable and be such as to promote economic efficiency in the supply and consumption of electricity; and

(c) shall satisfy all other relevant provisions of the Act, regulations and conditions of the license.

(6) The Commission also shall endeavour to fix tariff in such a manner that, as far as possible, similarly placed consumers in different areas pay similar tariff.

(7) Every licensee shall provide to the Commission, at such time and in such manner, as may be specified in the regulations, full details of its calculations for the ensuing financial year of the expected aggregate revenue from charges, which it believes to have been permitted to recover pursuant to the terms of its licence and such further information, as the Commission may reasonably require to assess such calculations. Within ninety days of the date on which the licensee has furnished all the information, the Commission shall notify either,-

(a) that it accepts the licensee’s revenue calculations and tariff proposals; or

(b) that it does not consider the licensee’s revenue calculations and tariff proposals to be in accordance with the methodology or procedure prescribed, and such notice shall,-

(i) specify fully the reasons why the Commission considers that the revenue calculations or tariff proposals furnished do not comply with the methodology, specified procedure or are incorrect;

(ii) propose a modification or an alternative calculation of the expected revenue from charges, which the licensee shall accept.

(8) The Commission may, at the time of notifying the decision under sub-section (7) or within fifteen days of such decision, determine whether the tariff charged by the licensee is required to be modified and if so, require the licensee to modify the tariff or any part thereof.

(9) Each holder of the supply licensee shall publish in a daily newspaper having circulation in the area of supply and make available to the public on request, the tariff for supply of electricity within the area of supply and such tariff shall take effect only after seven days from the date of such publication. paying capacity of category of consumers and need for cross subsidisation; and

(b) shall be just and reasonable and be such as to promote economic efficiency in the supply and consumption of electricity; and

(c) shall satisfy all other relevant provisions of the Act, regulations and conditions of the license.

(6) The Commission also shall endeavour to fix tariff in such a manner that, as far as possible, similarly placed consumers in different areas pay similar tariff.

(7) Every licensee shall provide to the Commission, at such time and in such manner, as may be specified in the regulations, full details of its calculations for the ensuing financial year of the expected aggregate revenue from charges, which it believes to have been permitted to recover pursuant to the terms of its licence and such further information, as the Commission may reasonably require to assess such calculations. Within ninety days of the date on which the licensee has furnished all the information, the Commission shall notify either,-

(a) that it accepts the licensee’s revenue calculations and tariff proposals; or

(b) that it does not consider the licensee’s revenue calculations and tariff proposals to be in accordance with the methodology or procedure prescribed, and such notice shall,-

(i) specify fully the reasons why the Commission considers that the revenue calculations or tariff proposals furnished do not comply with the methodology, specified procedure or are incorrect;

(ii) propose a modification or an alternative calculation of the expected revenue from charges, which the licensee shall accept.

(8) The Commission may, at the time of notifying the decision under sub-section (7) or within fifteen days of such decision, determine whether the tariff charged by the licensee is required to be modified and if so, require the licensee to modify the tariff or any part thereof.

(9) Each holder of the supply licensee shall publish in a daily newspaper having circulation in the area of supply and make available to the public on request, the tariff for supply of electricity within the area of supply and such tariff shall take effect only after seven days from the date of such publication.

(10) No tariff or part of any tariff implemented under sub-section (5) may be amended more than once in any financial year, except in respect of any charges expressly permitted under the terms of any fuel surcharge formula as may be approved by the Commission. At least three months before the proposed date for implementation of any tariff or amendment to a tariff, the licensee shall provide details of the proposed tariff or amendment to a tariff to the Commission, together with such further information as the Commission may require to determine whether the tariff or amended tariff would satisfy the provisions of subsection (5). If the commission considers that the proposed tariff or amended tariff of a licensee does not satisfy any of the provisions of subsection (5), it shall within sixty days of receipt of all the information which it required, and after consultation with the Commission Advisory Committee and the licensee, notify the licensee that the proposed tariff or amended tariff is unacceptable to the Commission and it shall provide to the licensee an alternative tariff or amended tariff which shall be implemented by the licensee. The Commission shall notify its decision on the proposed amended tariff within ninety days of receipt of all information.

(11) The licensee shall not amend any tariff unless the amendment has been approved by the Commission and the amended tariff is published in the manner provided under sub-section (9).

(12) Notwithstanding anything contained in sections 57-A and 57-B of the Electricity (Supply) Act, 1948 (54 of 1948), no Rating Committee shall be constituted after the date of commencement of this Act and the Commission shall secure that the licensee comply with the provisions regarding the charges for the sale of electricity, both wholesale and retail, and for connection to, and use of, their assets or system in accordance with the provisions of this Act.

Explanation.- (a) In this section "the expected revenue from charges" means the total revenue which the KPTC or the licensees are expected to recover from charges for the level of forecast supply used in the determination under sub-section (7), in any financial year, in respect of goods or services supplied to customers. (b) "tariff" means a schedule of standard prices or charges for specified services which are applicable to all such specified services provided to the type of customers specified in the tariff published.