The Appellate Tribunal for Electricity (ATE) has once again reprimanded the Odisha Electricity Regulatory Commission (OERC) for what it called ‘total lack of judicial approach’.
The tribunal recently passed the order on an appeal filed by the Reliance Infrastructure-managed Distribution Companies (Discoms) Nesco, Wesco and Southco. The Discoms had pointed out that the OERC had not been complying with the ATE orders on their appeals and had challenged the order of the commission for determination of tariff based on the Annual Revenue Requirement (ARR) on unrealistic loss levels.
The commission has been refusing to implement the ATE 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. During these proceedings before the ATE, the OERC had filed applications before the Supreme Court seeking a stay, which was rejected by the court. Yet, the OERC did not implement the ATE orders.
“We have been watching for several years the unfair conduct of this commission (OERC) through its various orders which bent upon violating all our directions given in our every judgment,” the ATE in its November 30, 2014 order has observed.
Further, the ATE observed, “Even though we find that there is deliberate violation on the part of the State Commission, we would like to give one more opportunity to the State Commission to comply with our judgments at least now.”
In its earlier four orders, the tribunal had categorically directed the OERC for setting distribution loss targets based on the ground realities, actual loss revel and realistic loss reduction targets. “As a result, the tariffs based on approved loss levels do not cover even the OERC-approved costs forcing the Distribution Companies into financial distress,” the ATE said.
“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,” the ATE observed.
On the additional expenses incurred, the tribunal said, “As regards the additional expenses incurred on taking energy audit, the energy audit had been undertaken by the appellants (Discoms) since the revocation proceedings had been initiated against the appellants on that ground. Thus, on the one hand the licences of the appellants were sought to be revoked on the ground that spot billing was not introduced and not taking full energy audit and, on the other hand, when the appellants introduced the same, the State Commission had chosen to disallow the additional expenditure on these activities. This finding is wrong.”
On the investment in the distribution companies, the ATE said that even as the State Commission in its order of March 29, 2012 had directed the GRIDCO to release remaining assets to the Discoms for hypothecation after retaining assets of the value of Rs 250 crore. “However, GRIDCO did not adhere to the order of the Hon’ble OERC and did not release the balance-hypothecated assets to the Discoms,” it said.
Despite the above finding of this Tribunal, the State Commission did not permit the cost of energy audit in the ARR of the Discoms and is seeking to capitalise on the Discoms for not carrying out the energy audit, it said.
“Thus, it is crystal clear that the State Commission has violated our directions and refused to pass the consequential orders. In this context, with anguish, we have to observe that the Orissa Commission, over the several years, has been deliberately violating our directions in the various judgments,” the ATE observed.
Giving another chance to the OERC, the tribunal stated, “The matter is remanded to the State Commission to pass consequential orders after hearing the parties, without giving any room for further complaint of violation of our earlier direction. We expect that the State Commission would correct their approach towards the proper path in future without forgetting the maxim ‘Justice is not only to be done but also seen to be done’.”
The tribunal further rapped the OERC, saying, the “Impugned Order (ARR order of OERC) rather reflects incompetence, impertinence as well as insubordination indicating that the State Commission’s attitude that it was not inclined to follow the directions issued by the Appellate Tribunal. This is purely insubordination. We can even condone the
inefficiency and advise them for improvement but not insubordination to the Tribunal.”