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10.2 Tariff determined in the MERC Order Another reason for reopening is the order for determination of tariff for sale of power issued by the Maharashtra Regulatory Commission for financial 2004-05 in assessee case of 18 of 2003, dated 1.7.2004. As admitted by the Assessing Officer himself in the reasons recorded, this order was not available at the time of completion of original assessment, therefore, the assessee cannot be considered to have not disclosed full facts when the said order itself was not available and even the proceedings have not been initiated for any of the assessment years under consideration. As can be seen from the order of the MERC, the order itself indicates that it is in a matter of "approval of M/s BSES Ltd) (Now a Reliance Energy Ltd)'s annual revenue requirements for financial year 2003-04 and 2004-05 and determination of tariff for FY 2004-05". The issue before the MERC under the 16 ITA 4654/M/09 ITA 4630/M/09 ITA 4702/M/09 ITA 4703/M/09 Reliance Energy Ltd Electricity Act, 2003 vide powers vested in section 61 & 62 in the MERC was for determination of the tariff for supply of electricity to various categories of consumers. In its detailed order, the MERC has taken into consideration various factors, objections and also the details, particularly, the statements submitted by the BSES, objections from the general public and ultimately made various adjustments towards capital cost, fuel adjustment, revenue projections, requirement of funds in next few years, past profits of the company in the detailed order. The first part of the order consist of brief history of tariff determination, second part contains various objections raised and the issues and the findings on the issues and third part comprises commissions analysis and its decisions on BSES submissions, ARR and tariff objections for FY 2003-04 and 2004-05 and commission's reasoning in arriving at acceptable figures with reference to the figures furnished by BSES. The last part contains the determination of tariff for various categories in financial year 2004-05. This indicates that entire exercise of the regulatory commission was with reference to determining annual revenue requirement and fixing the tariff for supply of electricity to various consumers groups. As per the provisions of the Electricity Act, as modified by the various provisions of State Act, the MERC has, for the first time issued a tariff order on 1st July 2004 which is applicable for financial year 2004-05. In determining the tariff, there are various parameters to be considered and in that one such parameter is the reasonable rate of return at 16% of the capital cost. However, there are various methodologies in arriving at various workings for determining the tariff and this is based on the provisions of the Act, various instructions and findings of the commission. As per the MOP Notifications investments made after 31.3.1999 are eligible for reasonable return of 16%. licencees were also entitled for 0.5% return on loans from approved institutions and on the investment allowances reserve. Further it indicates that on account of commission's philosophy in reducing the reserves to match the shortfall in clear profit on yearly basis stated capital base was higher than the capital base projected by the BSES. Accordingly, the restated level of reasonable returns for the period FY 2002-03 to financial year 2004-05 has been given in detail in page 117 of the order. As seen from the order and the table, there are various rates of return for investments made by the assessee company from capital base on 31st March 1965 to 1st April 1999 and at various percentages of 17 ITA 4654/M/09 ITA 4630/M/09 ITA 4702/M/09 ITA 4703/M/09 Reliance Energy Ltd reasonable return. The probable reasonable returns were estimated by the MERC. The projections also indicate that the assessee submitted that the reasonable return at Rs 337.37 crores whereas MERC arrived at 256.66 crores. Likewise, clear profits were discussed in para 21 and at the end of the discussion, the commission has left this note "Thus, the revised net surplus between clear profit and the reasonable return in financial year 2004-05 based on the existing tariff and the commission's projections of expenses works out to 309.4 crores, which was adjusted by the revising tariff to different categories based on the commission's tariff philosophy discussed in the next section".