The State Government is desperately looking for some way out to end the standoff between the Appellate Tribunal for Electricity (ATE) and the Odisha Electricity Regulatory Commission (OERC) on the issue of noncompliance of the former’s several orders to the latter to compute the Annual Revenue Requirement (ARR) on realistic loss levels for determining power tariff.
One of the options before the Government is to approach the Supreme Court for its intervention which it is considering at the highest level. The OERC has been refusing to implement the ATE’s directives from 2006-07 to 2014-15 on the pretext that appeals have been filed against the ATE orders in the Supreme Court. But the apex court refused to grant any stay on the ATE order. More so, in the course of these proceedings before the ATE, the OERC had filed applications before the Supreme Court seeking a stay, which was never granted.
The OERC did not implement the ATE orders, pointing out some difficult situations like the rise in the number of consumers from 23 lakh in 2006-07 to 53 lakhs in 2013-14, and most of them are the lT and BPl consumer categories, a sharp decline in the HT and EHT industries, tariff hike due to revision of past year ARR to be borne by the existing lT and new consumers.
The commission estimated that the amounts to be recovered after implementation of the ATE orders from the consumers would be approximately Rs4,200 crore from 2006-07 to 2012-13. “It would be difficult to pass through such a huge amount in one-year tariff”, the OERC had informed the ATE as well as the Supreme Court.
The ATE in its last order on November 30 last, however, rejected the OERC’s contention, saying, “Sec 61 empowers the State Commission for tariff determination. It is only after the ARR is computed on realistic loss levels that the gap is ascertained that measures to bridge such gap which could be either through Retail Supply Tariff (RST) hike, or decrease in Bulk Supply Tariff (BST), or Government subsidy or a combination of all measures is worked out. The State Commission never quantified the amount of gap and its queries pertaining to subsidy support from the Government which was general in nature.”
Experts, however, pointed that it is not necessary to re-determine the tariff retrospectively. Secondly, any hike in tariff as a consequence of the actual ARR assessment by the OERC need not to be passed on to the consumers and others in one year. Even for the coming years, there can be several approaches to meet the gaps without stiff or no increase in tariff, they pointed out. Even then, the OERC is in no mood to implement the ATE’s orders despite no stay from the apex court on the orders. Now it wants to fire the salvo on the shoulder of the Government, which barely has any role in determination of tariff. “The State Government has no locus-standi. The role of the Government only will come after tariff determination by the OERC if it wants to give subsidy. This is the sixth consecutive year the ATE has passed consequential order. The OERC has remained silent and had gone to the Supreme Court where it did not get any relief. This year, it is trying to bring the Government to picture hoping to get some relief,” said Supreme Court lawyer Hasan Murtaza.
Incidentally, the Government has already clarified that post privatiation, it would not give subsidy under Section 65 of the Electricity Act 2003. Prior to privatisation, in 1995-96, the Government had given a subsidy of Rs256 crore.
In contrast, the neighbouring States like Andhra Pradesh gave a subsidy of Rs4,066 crore, Bihar Rs2,120 crore, Madhya Pradesh Rs1,538 crore for 2011-12 and continue to give subsidies to boost the power sector. The Odisha Government may have to follow suit to make provisions for subsidy if it approaches the apex court in the matter to get some relief for the defiant OERC, observers remarked.