Section 60 in Joint Electricity Regulatory Commission for the State of Goa and Union Territories (Generation, Transmission and Distribution Multi Year Tariff) Regulations, 2018
60. Operation and Maintenance (O&M) expenses for Retail Supply Business.
- 60.1 The Operation and Maintenance Expenses for the Retail Supply Business shall be computed in accordance with this Regulation.60.2O&M Expenses shall comprise of the following:(a)Employee expenses - salaries, wages, pension contribution and other employee costs;(b)Administrative and General expenses including insurance charges if any; and(c)Repairs and Maintenance expenses.60.3The Licensee shall submit the required O&M expenses for the Control Period as a part of Multi Year Tariff Petition. O&M expenses for the base Year shall be approved by the Commission taking into account the latest available audited accounts, business plan filed by the transmission Licensee, estimates of the actuals for the Base Year, prudence check and any other factors considered appropriate by the Commission.60.4O&M expenses for the nth Year of the Control Period shall be approved based on the formula given below:O&Mn = (R&Mn + EMPn + A&Gn) x (1 - Xn) + Terminal LiabilitiesWhere,R&Mn = K x GFAn-1 x (WPIinflation)EMPn = (EMPn-1) x (1+Gn) x (CPIinflation)A&Gn = (A&Gn-1) x (CPIinflation)`K' is a constant (expressed in %). Value of K for each Year of the Control Period shall be determined by the Commission in the Multi Year Tariff Order based on Licensee's filing, benchmarking of repair and maintenance expenses, approved repair and maintenance expenses vis-a-vis GFA approved by the Commission in past and any other factor considered appropriate by the Commission;CPIinflation - is the average increase in Consumer Price Index (CPI) for immediately preceding three (3)Years before the base Year;WPIinflation - is the average increase in the Wholesale Price Index (CPI) for immediately preceding three (3) Years before the base Year;EMPn - Employee expenses of the Distribution Licensee for the nth Year;A&Gn - Administrative and General expenses of the Distribution Licensee for the nth Year;R&Mn - Repair and Maintenance expenses of the Distribution Licensee for the nth Year;GFAn-1 - Gross Fixed Asset of the transmission Licensee for the n-1th Year;Xn is an efficiency factor for nth Year. Value of Xn shall be determined by the Commission in the Multi Year Tariff Order based on Licensee's filing, benchmarking, approved cost by the Commission in past and any other factor the Commission feels appropriate;Gn is a growth factor for the nth Year. Value of Gn shall be determined by the Commission for each Year in the Multi Year Tariff Order for meeting the additional manpower requirement based on Licensee's filings, benchmarking, approved cost by the Commission in past and any other factor that the Commission feels appropriate:Provided that in case the Licensee has been in operation for less than three (3) Years as on the date of effectiveness of these Regulations, the O&M Expenses shall be determined on a case to case basis.60.5Terminal liabilities of employees of Licensee including pension expenses etc. shall be approved as per actuals submitted by the Licensee, subject to prudence check or be established through actuarial studies. Additionally, any variation due to changes recommended by the pay commission shall be allowed separately by the Commission, subject to prudence check.60.6For the purpose of estimation, the same value of factors - CPIinflation and WPIinflation shall be used for all Years of the Control Period. However, the Commission shall consider the actual values of the factors - CPI inflation and WPI inflation during the truing up exercise for the Year for which true up is being carried out and true up the O&M Expenses for that Year, only to the extent of inflation.
