No.: F.11(118)/2001-Power/ - In exercise of the powers conferred under section 12 and other applicable provisions of the Delhi Electricity Reform Act, 2000 (Delhi Act No.2 of 2001) and pursuant to the decision made by the Government of National Capital Territory of Delhi on the restructuring of Delhi Vidyut Board and on the bids received for the privatisation of the distribution business, the Government of National Capital Territory of Delhi hereby notifies the following policy directions in amendment to the Notification No.F.11(118)/2001-Power/2889 dated 22nd November, 2001.

AT&C losses for the purpose of tariff computation shall be based on the values of reduction in AT&C loss each year for the year 2002-03, 2003-04, 2004-05, 2005-06 & 2006-07 indicated in the bid submitted by the Purchaser and as finally accepted by the GNCTD (hereinafter referred to as the "Accepted Bid") over the opening level of AT&C loss approved by DERC for each distribution company in the Tariff Order dated 22.02.2002.

The following shall be the method of computation and treatment of over-achievement and underachievement for the year 2002-03 to 2006-07.

In the event the actual AT&C loss of a distribution licensee in any year is better (lower) than the level based on the minimum AT&C loss reduction levels stipulated by the Government for that year the distribution licensee shall be allowed to retain 50% of the additional revenue resulting from such better performance. The balance 50% of additional revenue from such better performance shall be counted for the purpose of tariff fixation.

In the event the actual AT&C loss of a distribution licensee in any year is worse (higher) than the level based on the AT&C loss reduction levels indicated in the Accepted Bid for that year, the entire shortfall in revenue on account of the same shall be borne by the distribution licensee.

In the event the actual AT&C loss of a distribution licensee in any year is worse (higher) than the level based on the minimum AT&C loss reduction levels stipulated by the Government for that year but better (lower) than the level based on the AT&C loss reduction levels indicated in the Accepted Bid for that year, the entire additional revenue from such better performance shall be cunted for the purpose of tariff fixation.

Provided further that for paras 2(i), 2(ii) and 2(iii) above, for every year, while determining such additional revenue or shortfall in revenue the cumulative net effect of revenue till the end of the relevant year shall be taken, in regard to over achievement/under-achievement and appropriate adjustments shall be made for the net effect.

The opening levels of AT&C loss approved by the DERC, AT&C loss reduction indicated in the Accepted Bid and the minimum AT&C loss reductions levels stipulated by the Government for each distribution company are given in the table blow.

The Government will make available to the Transmission Company an amount of upto, approximately, Rs. 3450 crores during the period 2002-03 to 2006-07 as loan to be repaid by the Transmission Company to the Government in a manner agreed to between the Transmission Company and the Government. The Transmission Company will use the loan bridge the gap between its revenue requirement and the bulk supply price which it may receive from the distribution licensees.

The successor companies viz. GENCO, TRANSCO and the three distribution companies shall undertake to repay the loan payable to the Holding Company mentioned in relevant schedules of the Transfer Scheme, within thirteen year from the date of transfer with a waiver on interest and moratorium on principal repayment for the first years. Thereafter the loan would cary interest at the rate of 12% per annum and would be repaid in eighteen equal half yearly installments.

Provided that in case of cumulative underachievement at the end of the fourth year in a distribution company , the waiver on interest and moratorium on principal repayment on Holding Company debt will be extended to the fifth year for the relevant distribution company. The principal repayment after such moratorium shall be in eighteen equal half yearly installments. The additional funds available on account of extension of this moratorium on loan repayment. The distribution company will be free to raise other funds to meet its requirements, subject to the approval of the Commission.

(Ramesh Chandra)
Principal Secretary (Power)

No.: F.11(118)/2001 -Power/187-193