In exercise of the powers conferred on it by Section 181 of the Electricity Act

EXTRAORDINARY PART III—Section 4 PUBLISHED BY AUTHORITY No. 821] NEW DELHI, FRIDAY , DEC EMBER 8, 2023/ AGRAHAYANA 17, 1945 CG-JK-E-09122023-250538 JOINT ELECTRICITY REGULATORY COMMISSION (For the UT of J&K and the UT of Ladakh ) NOTIFICATION Jammu, the 10 th November, 2023 No. JERC -JKL/Reg./2023/14 .—In exercise o f the powers conferred on it by Section 181 of the Electricity Act, 2003 (36 of 2003) and all the powers enabling it on this behalf, the Joint Electricity Regulatory Commission for the UT of Jammu & Kashmir and the UT of Ladakh hereby makes the following Regulations. 1. SHORT TITLE, COMMENCEMENT AND EXTENT 1.1. These Regulations shall be called the Joint Electricity Regulatory Commission for the UT of Jammu & Kashmir and the UT of Ladakh ( Compliance Audit ), Regulations, 2023. 1.2. These Regulations shall be applicable in the whole of the Union Territory (UT) of Jammu & Kashmir and the UT of Ladakh. 1.3. These Regulations shall come into force from the date of their publication in the Official Gazette. 2. DEFINITIONS AND INTERPRETATIONS 2.1 In these Regulations, unless the context o therwise requires: a. “Act'' shall mean the Electricity Act, 2003 (36 of 2003), as amended from time to time; b. “Commission” shall mean the Joint Electricity Regulatory Commission for the UT of Jammu & Kashmir and the UT of Ladakh c. “Regulated Entities” mean dist ribution licensees, generation companies, transmission licensees, intra -UT Electricity Traders, and State Load Dispatch Centre(s); 2.2 Words and expressions used and not defined in these Regulations but defined in the Act shall have the meanings assigned to t hem in the Act; expressions used herein but not specifically defined in these regulations or in the Act but defined under any law, passed by a competent legislature and applicable to the electricity industry, in general, shall have the meaning assigned to them in such law passed by a competent legislature and is generally assigned to them in the electricity industry in the state/UT shall have the meaning assigned to them in such law. 3. COMPLIANCE AUDITS 3.1. The Commission may, at any time, conduct an audit of a R egulated Entity for verifying their compliance with the Act, Rules, Regulations made thereunder, orders, and directions issued by the Commission 3.2. The Commission may, by order, empanel Consultants / Auditors required to assist the Commission in the discharge of these functions on the terms and conditions as deemed fit. 3.3. The Commission may either appoint Consultants/ Auditors empaneled with it for an audit or go through the process of fresh selection through competitive bidding if required for a specific situat ion. 3.4. The Commission may also consider the single source selection of Consultants/ Auditors in exceptional cases where it is appropriate, duly mentioning the reasons for such single source selection recorded in writing. 3.5. The Commission, before initiating an audit, will frame the Terms of Reference which will detail out the specific outputs that are to be provided by the Consultant/Auditor in relation to the task, the timeframe in which the task has to be completed and other terms relevant to the task. 3.6. The Com mission shall assign, through a notification, the specific task of audit to the Consultant / Auditor based on the Terms of Reference framed by it before the audit of the Regulated Entity starts. 4. REQUIREMENTS OF CONSULTANT/ AUDITOR The Consultants / Auditors shall provide professional, objective, and impartial advice and at all times hold the Commission’s interests paramount, without any consideration for future work, and that in providing advice they avoid conflicts with other assignments and their own corpo rate interests. Consultants / Auditors shall not be hired for any assignment that would be in conflict with their prior or current obligations to other clients, or that may place them in a position of being unable to carry out the assignment in the best in terest of the Commission. Without limitation on the generality of the foregoing, Consultants / Auditors shall be engaged keeping in view the circumstances set forth below: (i) A consultant or an auditor engaged for a particular audit must not hold office or ha ve a commercial or any other interest in the regulated entity for a period of Five (5) years preceding the engagement by the Commission. (ii) While conducting an audit, the consultant or auditor would be expected to do so honestly, fairly, professionally, indep endently objectively and exercise a standard of skill, care, and diligence that would be reasonable to expect of a person who is skilled, and who has substantial experience, in the provision of services the same or as similar to those to be provided by the auditor. (iii) The selected consultant or auditor would be required to provide a written declaration to the Commission that he has no conflict of interest while performing the tasks and functions assigned to him under these regulations nor by its nature, may be in conflict with another assignment of the consultant or auditor. (iv) Depending upon the requirement of the specific task, the Commission may specify the minimum educational qualification of the Consultant / Auditor. Consultant / Auditor may be a firm or a pe rson with qualification of CA/ICWA/MBA (Finance) if the task deals with financial aspects or the minimum qualification could be LLB, if the task deals with legal aspects or the minimum qualification could be specified as BE/BTECH if the task deals with the Electricity related issues. In all cases, minimum 5 years’ experience in the relative field shall be necessary. (v) The remuneration/fee payable to the Consultant / Auditor may be specified by the Commission in the Terms of Reference separately or may be deci ded through competitive bidding, if necessary. 5. EXPENSES 5.1 All expenses of, and incidental to, any audit made under these regulations, as per the terms of reference, shall be paid to the auditor/consultant by the Commission, and such expenses shall be settle d by the regulated entity in favor of the Commission within 60 days of the claim made by the Commission. 5.2 The regulated entities shall be permitted to claim the said expenses as pass -through in its annual revenue requirement. 6. METHODOLOGY 6.1 The consultant/aud itor, at any time, shall, on being directed to do so by the Commission, make an inspection to be made, by one or more of his officers, of any regulated entity and his books of account, registers, and other documents in its custody, and to investigate into the affairs of the regulated entity in a manner as deemed fit by the Commission. Provided that the regulated entity shall be given a reasonable advance notice not less than 15 days in writing of such inspection and/or investigation. 6.2 It shall be the duty of every regulated entity, to produce before the consultant/auditor, all such books of account, registers, and other documents and to furnish him with any statement and information relating to the affairs of the regulated entity, as the said consultant/audit or may require of him within such time as the said consultant/auditor may intimate in writing in this behalf. 6.3 The consultant/auditor shall collect a sufficient amount of evidence to document the work performed and to serve as the basis for the conclusions reached during the course of the audit. The information gathered will be generally through: (a) Data Requests - The primary method of obtaining data shall be through data requests to the concerned regulated entity. The data obtained through data requests could include financial and operational information, procedure manuals, organization charts, reports, email and voice mail records, and studies. The data may be obtained either electronically or as paper documents (depending upon the requirement). (b) Site Visits – The consultant/auditor shall conduct Site visits to ensure accurate interpretation of the information provided by the concerned regulated entity. The consultant/auditor shall inter alia collect materials on -site, observe processes, and offer an opportunit y to conduct face -to-face interviews, as relevant to the audit. (c) Interviews – The consultant/auditor may conduct interviews in person and over the phone. (d) As the data are collected from the regulated entity under audit, the consultant/auditor shall compile a nd analyze the data. The consultant/auditor shall analyze information gathered from multiple sources, including filings made before the Commission by such regulated entity, as well as from public records. Advanced analysis may require the creation of compl ex spreadsheets and databases, and the use of sampling to test for potential non -compliance with the Act, rules, regulations made thereunder, orders, and directions issued by the Commission. (e) Third -party complaints - Areas of non -compliance may also be iden tified through third -party complaints, for example, customer complaints. 6.4 The consultant/auditor will be required to provide full reports to the Commission, which shall contain, as a minimum: (a) a description of the reporting scope and methodology, which shoul d include all matters specified in the terms of reference; (b) a description of the systems and procedures that have been established to comply with regulatory obligations, including the identification of relevant documentation and responsible positions; (c) discu ssion of how compliance is managed, addressing generic compliance issues and any specific issues identified for that report; (d) details of any non -compliance identified and the actions being undertaken by the regulated entity to rectify them, and an assessmen t of the adequacy of the actions. 6.5 The report shall include a statement, signed by the Auditor, which states that: (a) The terms of reference have been complied with by the Consultant/Auditor in making findings and in preparing the report; and (b) The report reflec ts the professional opinion of the Auditor. 6.6 The consultant/auditor shall also supply to the regulated entity a copy of his report as referred above. 7. ORDER ON REPORT On receipt of any report under these regulations, the Commission may, after giving such opp ortunity to the regulated entity, to make a representation in connection with the report as in the opinion of the Commission, seems reasonable, by order in writing take appropriate action under the Act on being satisfied regarding the non - compliance or con travention, as the case may be. 8. POWER TO REMOVE DIFFICULTIES If any difficulty arises in giving effect to any of the provisions of these regulations, the Commission may, by general or special order, take suitable action, not being inconsistent with the Ac t, which appears to the Commission to be necessary or expedient for the purpose of removing the difficulties. 9. POWER TO AMEND The Commission may at any time and on such terms, as it may think fit, amend any provision of these Regulations for the purpose of meeting the objectives for which these Regulations have been framed. 10. ORDERS AND PRACTICE DIRECTIONS Subject to the provisions of the Act, the Commission may from time -to-time issue orders, and practice directions in regard to the implementation of these R egulations. By order of the Commission. V. K. DHAR , (JKAS) Secy . [ADVT. -III/4/Exty./ 603/2023 -24] Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi -110064 and Published by the Controller of Publ ications, Delhi -110054.