By Bizodisha Bureau, Bhubaneswar, March 6, 2015 :

The Reliance Infra managed three Distribution Companies [Discoms], Nesco, Southco and Wesco on Thursday have challenged the order of the Odisha Electricity Regulatory Commission (OERC) before the Appellate Tribunal for Electricity (ATE) revoking their licenses for power distribution saying that the order “is illegal”.

Three Discoms have pointed out that the OERC had 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 seeking a stay, which was rejected by the Supreme Court, yet the OERC did not implement the ATE orders.

The OERC on Wednesday had revoked the licenses of these Discoms and appointed state-owned Grid Corporation of Odisha (Gridco’s) chairman-cum-managing director [CMD] as administrator of the three Discoms which transmits power to northern, eastern and southern areas of the state.

The regulator has attributed defiance of its orders on improvement in power supply efficiency by three Discoms as the major reason for revocation of the license.

The Discoms had pointed out that they had implemented the OERC’s order but the State Commission has persistently fixed loss level targets without taking into account the ground realities. The ATE in its four earlier judgments had rapped the OERC saying that the lacked judicial approach.

“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”, it said.

The Discoms had appealed before the ATE that the State Commission has not determined the Annual Revenue Requirement [ARR] on realistic loss levels while determining tariff.

“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 Governor 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.

Incidentally, the Tribunal was so anguished that it just remained short of passing a stricture on the Commission. “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”, the ATE observed in its recent order.

Experts are of the opinion that the OERC’s stand that the ATE’ s order if implemented would raise the tariff is not based on the facts.

The ATE has issued notice to the OERC to file their reply by Monday when the former would take up the case for hearing.