Bangalore Electricity Supply Company Limited Truing up for FY-14 and ARR for FY-16

CHAPTER – 10

New Proposals

1. Withdrawal of Solar rebate:

i) To encourage consumers to use environmental friendly energy i.e renewable energy and
also to reduce the morning peak, solar rebate was introduced to domestic consumers
who install solar water heater. It was presumed that, by installing the solar water
heater, morning peak load will reduce, thus deferring the interest on that investment.
That deferred interest was shared with the consumer as incentive.

Now, the situation is entirely different,

 Distribution system is now strengthened and interest and depreciation on these
investments are being passed through tariff.
 Government has notified the mandatory installation of solar water heaters.
 Commission approved tariff for solar energy generation from Solar roof top PV plants
@ Rs.9.56 per unit.
 Government of Karnataka is also providing subsidy for solar generation to an extent of
30%.
 The present slab rates after 200 units are more or less equal to Average cost of supply.
Hence, consumers are voluntarily not only installing solar water heaters but also
providing solar street light to their parks around there residential apartments and
approaching BESCOM for extension of rebates to their premises on similar lines.

Under the above circumstances, the extension of solar rebate has became futile.
Hence, solar rebate is to be withdrawn.

2. Tariff for professional Jobs:

Erstwhile KEB provided domestic tariff to the consumers for carrying out their professional
jobs in a portion of their residence. The professional jobs are: Engineering, Architecture,
Medicine, Astrology, Legal, Income tax, Charted accountants, Job typing, Tailoring,
Gold smithy, Chawki rearing, Paying Guests, Personnel Computers, Dhobies, Beauty
Parlors. (Emphasized bold professional jobs)

The objective of providing such relaxation was with the forethought that by carrying out
their professional jobs in a portion of their residence yielded very less or no revenue to an
individual. Now the situation has changed. There are very few professional jobs that are
being carried out at the residence and the revenue earned from these professions are equal
to commercial activity. An inspection drive was initiated in Bangalore Cubbonpet and
Nagarth pet area, wherein nearly 800 cases were noticed for misuse of tariff (ie., gold smith)

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Hence extending domestic tariff to the portion of the house is misunderstood by the public
as well as the concerned Authorities. Providing subsidized tariff (below average cost of
supply) to these high yielding commercial activities are burdening the other consumers
besides pushing the Distribution companies into legal entangles. Hence, it is appropriate to
categorize these professional activities as commercial and the consumer who desires to
carry out such business in their residence may be insisted to provide separate meter under
commercial tariff.

3. Tariff for Hoardings and Advertisements:

Outdoor advertising or out of home advertising is one of the fastest growing sector in
advertising domain due to its immense public reach.
The existing tariff structures for hoardings and advertisements are commercial tariff for
permanent usage and temporary tariff for temporary usage.

It is submitted before the Commission, Hoardings and Advertisement giving information to

the public for promoting to their own business in their premise is to be differentiated from
Hoardings and advertisement for commercial usage. It is proposed to continue Commercial
tariff for the Hoardings and Advertisement who provide information in the interest of
public, for promoting to their own business in their premises.

With the growing demand, at the current rate, the Company is likely to continue facing load
shedding during peak hours. In a bid to avoid curtailing the power consumption, a new
tariff category may be proposed for Hoarding and Advertisements.

Hoardings/public display boards that use high energy consuming luminaries cause a
significant wastage of energy. Such hoardings/public display boards may be considered for
billing under separate category at a tariff higher than the Non-Domestic category.

RATE SCHEDULE
Fixed Charge 200

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(Rs/month/connection)
Energy Charge 15.00
(Rs./kWh)

4. MODE OF PAYMENT: There are around 10400 HT installations in BESCOM. BESCOM

wishes to make the payment procedure easy for HT consumers by giving them option of
paying their electricity bill through RTGS/NEFT. The Consumer who has registered with
BESCOM website can pay their power supply charges through RTGS/ NEFT. It is proposed
before the Commission to make payments above one lakh through RTGS /NEFT mandatory.
BESCOM will bear the processing charges/service charges for RTGS transaction.

5. PROMPT PAYMENT INCENTIVE:

Encouraging the behaviour of customers who pay early, prompt payment incentive is
proposed. BESCOM proposes, if the payment is made within 5 days of the bill being received
an incentive for prompt payment of the bill amount should be given to the consumers in the
same month’s energy bill. A discount of 1% on the amount of monthly energy bill
(excluding statutory levies, etc.)in the same month, if the payment of the bill is received by
BESCOM within 5 (Five) days from the due date. This incentive is applicable to the
payments received from all E-payment modes. The consumers with arrears shall not be
eligible for prompt payment incentive.

Proposed graded incentive is as under:

Bills paid 15 to13 days 1.5% ob bill amount excluding statutory levy will be
advance of due date given on the same month
Bills paid 12 days 1.4% ob bill amount excluding statutory levy will be
advance of due date given on the same month
Bills paid 11 days 1.3% ob bill amount excluding statutory levy will be
advance of due date given on the same month
Bills paid 10 days 1.2% ob bill amount excluding statutory levy will be
advance of due date given on the same month
Bills paid 9 days 1.1% ob bill amount excluding statutory levy will be
advance of due date given on the same month
Bills paid 8 days 1% ob bill amount excluding statutory levy will be given
advance of due date on the same month
Disincentive
Bill paid upto due date No disincentive
15 th day to 30 day 12% of interest per annum on the amount due subject

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to miminum of Rs,10 per month will be levied on the

same month
18% of interest per annum on the amount due subject
30th day to 90 days to minimum of Rs,10 per month will be levied on the
same month
24% interest per annum on the amount subject to
Above 90 days miminimum of Rs.10 per month will be levied on the
same month

Advance payment: For the consumers who pays one year advance payment based on the
estimated bill of the previous year. For such advance payment interest at the rate of 4% per
annum will be allowed.

6. Gate way charges for on line payment:

To encourage the e-payments among the customer, the consumers who pays the
energy charges in advance ie., before due date, gate way charges will be borne by
the Licensee for the bill amount upto Rs.10,000/-.

7. Include 6AM to 10AM as peak hours under Time of Day:

The objective of ToD billing is to encourage the consumers to shift their load from
peak hours to non –peak hours by incentivizing them and also to levy penalty to
discourage the consumers to use energy at peak hours. The idea of introducing
differential pricing method was to clip of the load curve during peak hours which
has not happened.

Of late, it is noticed that the ToD consumers who neither shift the load to the off peak hours
nor reduce the consumption during the peak hour are getting incentive (benefit) due to
inherent error in the existing provision. As per the existing ToD tariff structure, penalty at
Rs.1.25 per unit is being levied for the consumption during peak hours ie., 6PM to 10PM ( 4
hours) and incentive at the rate of Rs.1.00 per unit is being extended to the half peak hour ie
10PM to 6 AM.
Maximum peak recorded in BESCOM in each month for the year FY-14 is tabulated below:

Month Maximum Time Minimum time

April-13 4034 19:21 2330 0:01

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May’13 3895 8:41 1767 23:20

June’13 3777 8:16 1806 4:37
July’13 3732 8:32 1895 23:52
Aug’13 3829 8:40 1786 3:08
Sep’13 3808 10:24 1950 23:05
Oct’13 3934 8:45 1827 2:04
Nov’13 4001 7:58 1704 23:59
Dec’13 4221 7:15 2104 0:43
Jan’14 4297 7:49 2293 23:56
Feb’14 4321 7:40 2300 4:40
Mar’14 4275 7:42 2291 23:03

It could be seen from the above table, the maximum peak records in the morning. Hence, it
is necessary to consider morning period from 6AM to 10AM is also peak hours.

Consumers who neither reduce the load during the peak hour nor shift the load to the off
peak hours get only 4 hours penalty and are rewarded with 8 hours of incentive, net
incentive of 37.5%. Hence to rectify the error, the Hon’ble Commission is requested to levy
penalty for the morning peak from 6AM to 10AM.

8. Billing on KVA basis to EHT/HT consumers:

BESCOM’s distribution loss trajectory is around 13%. Further, reduction of technical loss is
very crucial. Consumers contribution towards reduction in loss is a prime factor. It is
proposed to bill the consumption under KVA basis for HT- installations.
At present the contract load is measured in kVA and billing is done in kW terms. The current
tariff structure is a two part tariff, fixed/demand charges are billed in KVA and energy
charges are billed under kW. To this tariff structure, low power factor surcharge for power
factor less than 0.90 is also built in. The proposal is to introduce kVAh based billing for HT
consumers. Forfeiting low power factor surcharge and kWh based billing. The kVAh based
billing calculates accurately the energy charges for the contract load. The licensees
therefore expect the consumers to have Unity Power Factor.

9. Increase in minimum interest charges to the extent of Rs.10/- for the bill
amount more than Rs.100/- in case of LT

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The existing interest on belated payment, simple interest at the rate of 1 % per month is
being levied on the actual No. of days of delay subject to a minimum of Re.1/- for LT
installation and Rs.100/- for HT installation. No interest is however levied for arrears of
Rs.10/- and less.
Since minimum interest rate is Rs.1/-, there is slackness in paying the bills by the
consumers. Hence, to push the consumers to pay the bills before due date, it is requested
to increase the minimum interest from Rs.1 to Rs.10/-. No interest is however levied for
arrears of Rs.100/- and less.

10. Increase of consumption limit from 18 units to 30 units. (lifeline

consumption)
The existing policy, allows the BJ/KJ consumers to consume upto18 units and the Cost is
borne by the Government at the rate of Commission Determined Tariff ( at
Average Cost of Supply). If the consumption exceeds 18 units that installations for that
month it is to billed under LT2 (a) Tariff and the cost is to be borne by the concerned
consumer for that month.

It is pertinent to say that more than one lakh consumers of BJ/KJ consumers are swinging
between BJ/KJ tariff and other domestic tariff. ie., LT1 and LT 2 Tariff. Since, the consumers
whose consumption more than 18 unit should bear the cost of the bill for that month, and
in another month if their consumption is within 18 units, then the cost is borne by the
Government.

It is agreed all over India, that the life line consumption is 30 units per month. Commission
also in its all tariff orders fixing the rate for 30 units(life line consumption) at the rate of
50% of average cost of supply Hence, it is proposed to increase the existing
consumption limit of 18 unit to 30 units to the BJ/KJ consumers. It is also proposed
to shift the BJ/KJ consumer permanently to domestic (LT-2 (a)) tariff if the
consumption of particular installation exceeds 30 units in any three months in a
financial year.

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