Petition of the CERC (Conduct of Business) and (Terms and Conditions of Tariff) Regulations for determination of transmission tariff for HPPTCL – EQ

Summary:

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### **1. PETITION OVERVIEW**

* **Petitioner:** Himachal Pradesh Power Transmission Corporation Limited (HPPTCL)
* **Respondents:** Himachal Pradesh State Electricity Board Limited (HPSEBL) and Others
* **Subject:** A petition filed under the **Electricity Act, 2003** and relevant CERC regulations for:
1. **Truing up** of the transmission tariff for the **2019-24** period (adjusting past tariffs based on actual costs).
2. **Determination** of the transmission tariff for the **2024-29** period (setting future tariffs).
* **Assets Involved:** The petition pertains to **three (3) Inter-State Transmission System (ISTS) assets** owned by HPPTCL.

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### **2. PROCEEDINGS & COMMISSION’S DIRECTIONS**

During the hearing, the Petitioner’s counsel confirmed the petition’s purpose. The Commission then issued the following procedural and substantive directions:

**A. Procedural Timeline:**
1. **Notice** to be issued to all Respondents.
2. **Respondents** must file their **replies (on affidavit) within two weeks**, with an advance copy to HPPTCL.
3. **HPPTCL** may then file its **rejoinder within one week**.

**B. Specific Information Sought from HPPTCL (on affidavit within two weeks):**
The Commission directed HPPTCL to provide the following critical documents and justifications:
1. **Justification for Weighted Average Rate of Interest (WAROI):** HPPTCL must explain its use of a **10% WAROI** in its calculations.
2. **Tax Documentation:** Submission of **Assessment Orders or Income Tax Returns** for Minimum Alternate Tax (MAT) for Financial Years **2022-23 and 2023-24**.
3. **Detailed Note on Disputed Financial Components:** A comprehensive explanation claiming:
* **Interest on Loan (IoL)** for Asset-1.
* **Return on Equity (RoE)** for all assets in this petition.
* **Critical Context:** The Commission had previously **disallowed** these very components (IoL & RoE) in its past orders dated **16.5.2016 (Petition 119/TT/2014)** and **27.9.2021 (Petition 305/TT/2020)**. HPPTCL must now justify why these claims should be reconsidered.
4. **Auditor’s Certificates:** Submission of auditor-certified statements for the assets covering both the **2019-24 and 2024-29 tariff periods**.

**C. Next Hearing Date:** The petition is scheduled for the next hearing on **19 February 2026**.

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### **3. KEY BUSINESS & REGULATORY IMPLICATIONS**

* **Regulatory Scrutiny:** CERC is subjecting HPPTCL’s tariff claims to **rigorous scrutiny**, especially on financial parameters that have been contentious in the past.
* **Critical Financial Disputes:** The core of the inquiry revolves around **Interest on Loan (IoL)** and **Return on Equity (RoE)**, which are major components of the tariff. HPPTCL’s ability to successfully justify these claims, contrary to past rejections, will significantly impact the final approved tariff and its revenue.
* **Data-Driven Justification:** The Commission demands **concrete evidence and detailed justifications** (WAROI rationale, tax proofs, auditor certifications) rather than mere claims, emphasizing **prudence and transparency**.
* **Historical Precedent:** HPPTCL faces an uphill task as it must argue against the **Commission’s own past decisions** that disallowed similar claims. This indicates a potentially significant regulatory hurdle.
* **Impact on Tariff:** The outcome of this petition will determine the **transmission charges** that HPPTCL can levy on users (like HPSEBL) for using its three ISTS assets for the next five years (2024-29) and will settle accounts for the previous five years (2019-24).

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