LexThe Rajasthan State Electricity Distribution Management Responsibility Act, 2016
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THE RAJASTHAN STATE ELECTRICITY DISTRIBUTION
MANAGEMENT RESPONSIBILITY ACT, 2016
(Act No. 7 of 2016)
[Received the assent of the Governor on the 8th day of April, 2016]
An
Act
to provide for responsibilities of the State Government and
State Distribution Licensees to ensure financial and operational
turnaround and long -term sustainability of the State -owned
Distribution Licensee to enable adequate electricity supply to
consumers through financial restructuring, support on sustainable
basis in the areas of long term planning, corporate governance,
regulatory compliances, and laying down of policy directives and
various other measures connected therewith or incidental thereto.
Be it enacted by the Rajasthan State Legislature in the
Sixty-Seventh Year of the Republic of India, as follows:-
1. Short title, extent and commencement. - (1) This Act
may be called the Rajasthan State Electricity Distribution
Management Responsibility Act, 2016.
(2) It extends to the whole of the State of Rajasthan.
(3) It shall come into force on such date as the State
Government may, by notification in the Official Gazette, appoint.
2. Definitions.- (1) In this Act, unless the context otherwise
requires,-
(a) “action plan” means the action plan referred to in
clause (b) of sub -section (1) of section 3 of this
Act;
(b) “aggregate technical and commercial loss”, in
relation to a given period, means the difference
between the energy input into the distribution
system and the energy realized for the period
wherein the energy realized shall be equal to the
product of energy sold for which bills have been
issued to consumers and collection efficiency for
the period, expressed as a percentage of the energy
input;
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(c) “Authority” means the Central Electricity Authority
referred to in sub -section (1) of section 70 of the
Electricity Act;
(d) “Board” shall have the meaning assigned to it under
the Electricity Act;
(e) “collection efficiency” means the ratio of total
revenue realized against sale of energy to the total
amount billed for sale of energy for the same
period;
(f) “Electricity Act” means the Electricity Act, 2003
(Central Act No.36 of 2003) as in force from time
to time;
(g) “financial restructuring plan” means the plan for
financial restructuring of the Distribution
Licensees as approved by the State Government
from time to time in accordance with the
provisions of the Financial Restructuring Scheme
notified by the Central Government in terms of
Office Memorandu m No. 20/11/2012 -APDRP
dated 05th October, 2012;
(h) “financing vehicle” means the Rajasthan Rajya
Vidyut Vitaran Vitt Nigam Ltd. as constituted in
terms of sub-section (1) of section 6;
(i) “key performance indicators” means the performance
standards l aid down by the State Commission, if
any, and/or in the Financial Restructuring Plan, if
any, and till such time the key performance
indicators are laid down as above, the key
performance indicators as specified in the Schedule
to this Act;
(j) “nodal ban k” means the bank nominated by the
Department of Financial Services, Ministry of
Finance, Government of India, for the purposes of
financial restructuring of the State Distribution
Licensee and for the purposes of co -ordination
with the State Government, S tate Distribution
Licensee and the participating Lenders;
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(k) “notification” means notification published in the
Official Gazette.
(l) “prescribed” means prescribed by rules made by the
State Government under this Act;
(m) “rules” means rules made under the Act;
(n) “State Commission ” means Rajasthan Electricity
Regulatory Commission constituted under section
82 of the Electricity Act;
(o) “State Distribution Licensee” means a government
company vested with the function of distribution of
electricity;
(p) “true up petition” means a petition filed by the
distribution licensee for previous years expenses
and revenue based on audited accounts viz-a-viz
the approved forecast and categorization of
variation in performance as those caused by
controllable and uncontrollable factors;
(2) Words and expressions used but not defined in this Act
and defined in the Electricity Act shall have the meanings assigned
to them in that Act.
3. State Electricity Distribution Management Statement
to be laid before the State Legislature. - (1) The State
Government shall lay, in each financial year during the Budget
Session, before the State Legislature, a State Electricity
Distribution Management St atement on the measures taken by the
State Government in relation to electricity distribution in the State
including, in the areas of long -term planning, consumer protection,
regulatory compliance, corporate governance, financial
restructuring of the State Distribution Licensee, so as to bring
about the operational and financial viability of the State
Distribution Licensee, on sustainable basis and in particular it shall
comprise of the following:-
(a) State Electricity Distribution Strategy Statement
mentioning the targets for the key performance
indicators and laying down the policies and
strategies of the State Government for achieving the
targets set for the key performance indicators, for
the ensuing financial year, relating to the
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conditions or pro visions referred to in section 4,
section 5, section 6, section 7 and section 9, and
description of other activities which have
potential implications on financial and operational
turnaround of the State Distribution licensees;
(b) time bound actio n plan, on long -term, medium term
and short-term basis including,-
(i) activities to achieve targets for key
performance indicators;
(ii) monitoring mechanism to ensure
achievements of targets for key performance
indicators;
(iii) feedback loop for in/ mid -course
corrections; and
(iv) such other actions as may be required to
meet the obligations cast under this Act on
the State Government to achieve the
objectives of this Act:
Provided that the Action plan shall contain
steps, including disciplinary action against
defaulting officers, for eliminating/ minimizing
deviation in actual performance and targets for key
performance indicators.
(c) State Electricity Distribution Performance
Statement laying down an assessment of
compliance, by the State Electricity Distribution
Licensees or the State Government, as the case may
be, with the conditions or provisions referred to in
sections 4, section 5, section 6, section 7 and section
9 and vis-à-vis the key performance indicators.
(2) The State Electricity Distribution Management
Statement shall be in such form as may be prescribed.
(3) The State Electricity Distribution Management
Statement shall be without prejudice to any consequences to which
the State Distribution Licensee may be liable under the Electricity
Act, in particular, the timeline referred to in section 55 of the said
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Act and any orders and directions of the authorities in relation to
any of the requirements under the said Act:
Provided that nothing in this section shall imply relaxation
of any requirement under the Electricity Act.
4. Long term Planning for sustainability of State
Distribution Licensee. - The State Government shall undertake
appropriate measures to provide for the following matters,
namely:-
(a) that the State Distribution Licensees estimates the
demand and availability of electricity on long term
basis and, contracts, with the approval of the State
Commission, through long/ medium/ short term
agreements for purchase of power to meet the
demand;
(b) that the State Distribution Licensees prepares, with
the approval of the State Commission, a time bound
road map for aggregate technical and commercial
loss reduction:
Provided that the road map shall be prepared
within six months from the date of coming int o
force of this Act;
(c) that the State Distribution Licensees undertake
energy accounting and auditing of all 33 Kilo Volt
feeders and 11 Kilo Volt feeders along with
consumer indexing and time bound metering of
each category of consumers and in doing so the
Distribution Licensee considers latest developments
in metering technologies. Distribution Transformer
level energy auditing will be carried out in
Restructured Accelerated Power Development and
Reforms Programme towns within two years:
Provided that the road map in relation to
energy accounting and auditing and time bound
metering of all consumers shall be prepared within
six months from the date of coming into force of
this Act and approval for the same shall be sought
from the State Commission:
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Provided further that the consumer indexing
shall be completed within one year from the date of
coming into force of this Act:
Provided also that the State Distribution
Licensees shall submit to the Authority and the
State Commission half yearly progress repor ts with
respect to energy accounting, auditing, metering and
feeder wise consumer indexing;
(d) that if the State Government requires the grant of
any subsidy to any consumer or class of consumers,
the State Government shall declare the quantum of
subsidy in advance categorically stating the
consumer or the class of consumers to whom it is to
be provided;
(e) creation of annual budgetary provision and also
timely release of subsidies, if committed, in
accordance with section 65 of the Electricity Act;
(f) that there are no arrears of electricity charges for
electricity supplied to various departments and
institutions of the State Government on or before
the date of coming into force of this Act and in case
of failure to do so it shall be adjusted against the
budgetary grant;
(g) that the State Load Dispatch Centre is operated
within one year from the date of coming into force
of this Act, by a Government company or any
authority or corporation (other than the State
Transmission Utility) established or c onstituted by
or under any State Act, as may be notified by the
State Government, and provide for other measures
which shall ensure functional and financial
autonomy and independent and sustainable revenue
streams and adequate manpower:
Provided that such a government company
or any authority or corporation shall not engage in
any functions other than those prescribed under
sections 32 and 33 of the Electricity Act;
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(h) the formation of subsidiaries, joint venture
companies or other schemes of division,
amalgamation, merger or reconstruction or
arrangements in relation to the State Distribution
Licensees which shall promote the profitability and
viability of the resulting entity, ensure economic
efficiency, public private partnership, encourage
competition and protect consumer interests; and
(i) such other matters as may be prescribed.
5. Financial Restructuring Plan for State Distribution
Licensee.- (1) The State Government shall take appropriate
measures to ensure that the trajectories of the operational and
financial parameters in the financial restructuring plan are achieved
within the stipulated time frame.
(2)The State Government shall provide financial support to
the State Distribution Licensees through the financing vehicle and
shall ensure monitoring for achieving,-
(i) the operational and financial trajectories included in
the financial restructuring plan; and
(ii) the measures as may be specified in the financial
restructuring plan or any other financial
restructuring scheme:
Provided that the se fiscal responsibilities shall be
consistent with the budgetary constraints, if any.
6. Constitution and functions of the financing vehicle
and Government support. - (1) As soon as may be after
commencement of this Act, the State Government shall establi sh
the Rajasthan Rajya Vidyut Vitaran Vitt Nigam Ltd. under the
provisions of the Companies Act, 2013 (Central Act No. 18 of
2013) to act as a financing vehicle for the purposes of this Act and
to facilitate raising of capital and/or lower cost borrowings for the
State Distribution Licensees.
(2) The State Government shall provide following financial
support to the financing vehicle for every financial year for a
period upto financial year 2021 -22 starting from financial year
2015-16 , namely:-
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(a) an amount equal to electricity duty collected by the
State;
(b) an amount equal to compounding charges collected
under the Electricity Act; and
(c) such other amounts as may be granted by the State
Government from time to time.
(3) The financing vehicle may raise funds from the market
for the purposes of this Act with the approval of the State
Government.
(4) The State Government may guarantee the repayment of
funds raised under sub-section (3).
(5) Subject to the general or specific directions of the State
Government, the financing vehicle shall provide financial support
to the state distribution licensees for the purposes of this Act.
7. Accounting measures .- (1)The State Government shall
ensure that the State Distribution Licensees establish, within si x
months from the date of coming into force of this Act, an
Empowered Committee to ensure identification, provisioning and
write offs of receivables and bad and doubtful debts in the books of
accounts of the State Distribution Licensee:
Provided that the State Distribution Licensees shall prepare
accounting policies which shall provide for its financial
management and management of its receivables and provisioning
for bad and doubtful debts containing timeline for writing them
off.
(2) The State Government shall ensure that the Distribution
Licensees complete physical verification and prepare fixed assets
register as per accounting standards prescribed under the
Companies Act, 2013 (Central Act No. 18 of 2013) within two
years of the enactment of this Act.
(3) The State Government shall, by notification in the
Official Gazette, establish an Empowered Committee for each
State Distribution Licensee. The Empowered Committee shall
consist of the following namely:-
(i) Secretary in charge of
the Energy Departmen t
of the State
-
Chairperson;
(ii) Managing Director of
the State Distribution
-
Member-
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Licensee Secretary; and
(iii) Director (Finance) of the
State Distribution
Licensee concerned
-
Member
Explanation.- For the purpose of this sub -section,
“Secretary in charge” means the Secretary in charge of the
Department and includes an Additional Chief Secretary and
Principal Secretary when he is in charge of a department.
8. Corporate Governance.- (1)Subject to the provisions of
the Companies Act,2013(Central Act No.18 of 2013) the State
Government shall ensure that the Board of Directors of the State
Distribution Licensee has an optimum combination of functional,
nominee and independent directors:
Provided that the number of functional directors (including
Chairman and Managing Director / Managing Director) shall not
exceed fifty percent of the actual strength of the Board:
Provided further that the number of nominee directors
appointed by the State Govern ment shall be restricted to a
maximum of two:
Provided also that the number of independent directors
shall be as per the provisions of the Companies Act, 2013 (Central
Act No. 18 of 2013).
Explanation.- „independent director‟ shall have the same
meaning as defined in sub -section (5) of section 149 of the
Companies Act, 2013(Central Act No.18 of 2013).
(2) The State Government shall lay down a code of conduct
in line with the Guidelines on Corporate Gover nance for Public
Sector Enterprises, as notified by the Department of Public
Enterprises, Government of India, for all Board Members and
senior management of the State Distribution Licensee, which shall
include but shall not be limited to a clear delineati on of the roles
and division of responsibilities between the Board and the
management.
9. Regulatory compliance and tariff filings .- (1) The
State Government shall, twice in a year, evaluate the status of
compliance by the State Distribution Licensees wit h the Electricity
Act and rules and regulations made thereunder as also regulatory
directives and policies as well as steps taken to rectify instances of
non-compliances since the last such evaluation.
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(2) The State Government shall ensure regular and timely
filing of true-up petitions, aggregate revenue requirement and
tariff
petitions, and petitions for adjustments on account of fuel
and cost of power purchased by the State Distribution Licensees,
as per the orders or regulations specified by the State Commission.
(3)The State Government shall ensure that the State
Distribution Licensees shall take necessary steps to liquidate the
regulatory assets within a period of five years from the date of their
existence or within such period stipulated , if any, by the State
Commission whichever is earlier.
10. Memorandum of Understanding. - (1) The State
Government and the State Distribution Licensees, shall, within a
period not exceeding six months from the date of coming into
force of this Act, enter into a memorandum of understanding for
setting targets for key performance indicators and performance
evaluation of the State Distribution Licensees for each financial
year:
Provided that the memorandum of understanding shall be
aimed at providing greater autonomy to the State Distribution
Licensees to perform and comply with its legal and regulatory
obligations including but not limited to-
(a) timely filing of aggregate revenue requirement and tariff
petitions and adjustments on account of fuel and cost
of power purchased by the State Distribution Licensee;
(b) prudent investment and capital expenditure planning;
and
(c) financial management, to enable adequate and
affordable electricity supply to consumers:
Provided further that the memorandum of unde rstanding
shall provide for performance milestones for all the financial and
operational parameters prescribed under this Act and State
Electricity Distribution Management Statement.
(2) The State Distribution Licensees shall submit every six
months, a rep ort to the State Government, on its operational and
financial performance as required under various provisions of this
Act:
Provided that the report shall lay down the strategy and
plan for achieving the performance milestones and actual
performance agains t these performance milestones as prescribed
by the State Government:
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Provided further that the State Distribution Licensee shall
indicate revised strategies and plans in case they fail to achieve the
agreed milestones.
11. Monitoring Mechanism.- The State Government shall,
by notification in the Official Gazette, establish a Committee for
effective implementation of this Act, consisting of the following,
namely:-
(a) Chief Secretary of the State - Chairperson;
(b) Secretary in charge of Finance
Department
- Member;
(c) Secretary in charge of Energy
Department
- Member-
Secretary;
(d) Managing Director of ea ch of
theStateDistributionLicensees
-
Member;
(e) Managing Director, Rajasthan
VidyutUtpadan Nigam Limited
-
Member;
(f) Managing Director, Rajasthan
VidyutPrasaran Nigam Limited
-
Member;
(g) Representatives of the Nodal
Bank and three major lenders of
the State Distribution Licensees
-
Member;
(h) RepresentativefromtheAuthority
- Member.
Explanation.- For the purpose of this sub -section,
“Secretary in charge” means the Secretary in charge of the
Department and includes an Additional Chief Secretary and
Principal Secretary when he is in charge of a department.
12. Measures to enforce compliance. - (1) The Committee
established under section 11 shall review, every quarter,
compliance of the obligations cast on the State Government and
State Distribution Licensees under this Act and recommend
remedial measures, if any.
(2)Where owing to unforeseen ci rcumstances, there is a
deviation in fulfilling the obligations cast on the State Government
and State Distribution Licensees under this Act, the State
Government shall make a statement before the State Legislature
explaining-
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(i) the reasons for deviation in fulfilling the obligations
cast on the State Government and State Distribution
Licensees under this Act;
(ii) whether such deviation is substantial and has potential
implications on financial and operational turnaround
of the State Distribution Licensees; and
(iii) the remedial measures that the State Government
proposes to take on the recommendations made by the
Committee established under section 11.
13. Powers of State Government to make rules. - (1) The
State Government may, within six months from the date of coming
into force of this Act, by notification in the Official Gazette, make
rules for carrying out the purposes of this Act.
(2) In particular and without prejudice to the generality of
the foregoing power, such rules may provide for all or any of the
following matters, namely: -
(i) the form of the State Electricity Distribution
Management Statement referred to in sub -section (2)
of section 3;
(ii) such other matters for long term planning under
clause (i) of section 4;
(iii) any other matter which is required to be, or may be,
prescribed.
(3) All rules made under this section shall be laid, as soon
as may be, after they are so made, before the House of the State
Legislature, while it is in session, for a period of not le ss than
fourteen days which may be comprised in one session or in two
successive sessions and, if before the expiry of the session in
which they are so laid or of the session immediately following, the
House of the State Legislature makes any modification in any of
such rules or resolves that any such rules should not be made, such
rules shall thereafter have effect only in such modified form or be
of no effect, as the case may be, so however, that any such
modification or amendment shall be without prejudi ce to the
validity of anything previously done thereunder.
14. Protection of action taken in good faith .- No suit,
prosecution or other legal proceeding shall lie against the State
Government or State Distribution Licensee or any officer of the
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State Go vernment or State Distribution Licensee, for anything
which is in good faith done or intended to be done under this Act.
15. Application of other laws not barred.- The provisions
of this Act shall be in addition to and not in derogation of the
provisions of any other law for the time being in force.
16. Power to remove difficulties .- (1) If any difficulty
arises in giving effect to the provisions of this Act, the State
Government may by order published in the Official Gazette, do
anything, not inconsisten t with the provisions of this Act, which
appears to it to be expedient for removing the difficulty:
Provided that no such order under this section shall be
made after the expiry of a period of one year from the date of
commencement of this Act.
(2) Every order made under this section shall be laid, as
soon as may be, after it is so made, before the House of the State
Legislature.
17. Act not to apply in certain cases.- Nothing in this Act
shall apply to any State Distribution Licensee that is not owned o r
controlled by the State Government or to a successor entity of the
State Distribution Licensee that is not owned or controlled by the
State Government.
18. Repeal and savings. - (1) The Rajasthan State
Electricity Distribution Management Responsibility Ordinance,
2016 (Ordinance No. 1 of 2016) is hereby repealed.
(2) Notwithstanding such repeal, all things done, actions
taken or orders made under the principal Act as amended by the
said Ordinance shall be deemed to have been done, taken or made
under the principal Act as amended by this Act.
SCHEDULE
[see Sec. 2(i)]
Key Performance Indicators
The State Electricity Distribution Management Statement
as provided in section 3 of this Act shall include but not be limited
to, the following Key Performance Indicators:-
1. Aggregate technical and commercial loss reduction
trajectory:
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(a) Aggregate technical and commercial losses to be
reduced at least at the rate 3% per year if losses
are above 30%;
(b) Aggregate technical and commercial losses to be
reduced at least at the rate 1.5% per year if losses
are in the range of 20% to 30%;
(c) Aggregate technical and commercial losses to be
reduced at least at the rate 1% per year if losses
are in the range of 15% to 20%;
(d) Aggregate technical and commercial losses to be
reduced at least at the rate 0.5% per year if losses
are in the range of 10% to 15%.
2. Energy accounting and energy auditing of all 33 Kilo
Volt feeders and 11 Kilo Volt feeders - to be
achieved within one year.
3. Percentage of Feeder metering and consumer
indexing - to be maintained at level of 100%, as
measured at the end of each quarter. A feeder shall be
considered to be non -metered only if it is non -
metered for a period as may be notified by the State
Government provided that it shall not exceed two
months. Similarly, a consumer shall be considered to
be non-indexed only if he is non-indexed for a period
as may be notified by the State Government provided
that it shall not exceed two billing cycles - to be
achieved within one year.
4. Percentage of consumers billed on actual meter
reading - to be achieved at the level of 98% w ithin
two years. Meter will be considered as defective if it
remains defective for period as may be notified by the
State Government provided that it shall not exceed
two billing cycles.
5. Collection efficiency - to be maintained above 99% in
each year.
6. Recovery of past receivables - Past receivables to be
reduced at the rate 10% per year till the normative
level allowed by the Commission in the working
capital computation.
7. Timely preparation and audit of annual accounts
(Annual accounts to be pr epared within due date of
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30th September and realigned with the current
accounting standards.
8. Corporate Governance:
(a) Number of functional directors - As per guidelines
for Corporate Governance for Central Public
Sector Undertakings.
(b) Number of ind ependent Directors - As per
guidelines for Corporate Governance for Central
Public Sector Undertakings.
ब्रजेश कुमार डाांगरा,
Principal Secretary to the Government.