Section 15 in The Maharashtra Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2005
15. Forecast.
- 15.1 The applicant shall submit the forecast of aggregate revenue requirement and expected revenue from tariff for the control period in such manner, within such time limit and accompanied by such fee payable therefore as provided in Part B of these Regulations.15.2Forecast of aggregate revenue requirement15.2.1The applicant shall develop the forecast of aggregate revenue requirement using any one of the following two methodologies:(a)Assumptions relating to the behaviour of individual variables that comprise the aggregate revenue requirement during the control period; or(b)Assumptions relating to-(i)percentage annual change in a suitable macro-economic or market index, or combination thereof, to which the aggregate revenue requirement of the applicant is correlated; and(ii)percentage annual reduction in aggregate revenue requirement due to efficiency or productivity gains proposed to be achieved by the applicant during the control period:Provided that applications under this Regulation for the control period commencing from April 1, 2006 shall be accompanied by forecasts developed using the methodology specified in clause (a) above.15.2.2Where, for any control period, the applicant seeks to change the methodology for forecasting the aggregate revenue requirement, either:(a)from the methodology specified in clause (a) of Regulation 15.2.1 to clause(b)of that Regulation; or(b)from the methodology specified in clause (b) of Regulation 15.2.1 to clause (a) of that Regulation, he shall apply to the Commission for approval of change of methodology along with the rationale therefor and such other details as the Commission may require, at least nine (9) months before the commencement of such control period.15.2.3The Commission may, upon scrutiny of such application and after hearing the affected parties, either(a)pass an order approving the change of method, subject to such conditions as it may specify in the said order; or(b)reject the application for reasons to be recorded in writing, if it is not in accordance with the principles contained in Section 61 of the Act or these Regulations.15.3Forecast of expected revenue from tariff and charges15.3.1The applicant shall develop the forecast of expected revenue from tariff and charges based on the following:(a)In the case of a Transmission Licensee, estimates of transmission capacity allocated to Transmission System Users for each financial year within the control period;(b)In the case of a Distribution Licensee, estimates of quantum of electricity supplied to consumers and wheeled on behalf of Distribution System Users for each financial year within the control period;(c)Prevailing tariffs as at the date of making the application.15.4The applicant shall provide full details supporting the forecast, including but not limited to details of past performance, proposed initiatives for achieving efficiency or productivity gains, technical studies, contractual arrangements and/or secondary research, to enable the Commission to assess the reasonableness of the forecast.15.5Upon studying the application, the Commission shall either-(a)pass an order approving the forecast of aggregate revenue requirement and expected revenue from tariff and charges for the control period, subject to such modifications and conditions as it may specify in the said Order; or(b)reject the application for reasons to be recorded in writing, if it is not in accordance with the principles contained in Section 61 of the Act or these Regulations and direct the applicant to submit a revised forecast taking into consideration such factors as the Commission may deem appropriate.15.6The Commission shall, in its Order passed under Regulation 15.5 above, specify the variables comprised in the aggregate revenue requirement and expected revenue from tariff and charges of the applicant that shall be reviewed by the Commission as part of the annual performance review in accordance with Regulation 17 below:Provided that such variables shall be limited to the major items of cost and revenue forecast of the applicant that, in the Commission's opinion, could have a material impact on the cost of supply of electricity to consumers in the State over the control period:Provided further that the variables, as may be stipulated by the Commission under Regulation 16 below, shall form part of the annual performance review, unless exempted by the Commission from such review in its Order.
