Power tribunal quashes notice to REL cos

In a relief to Reliance Energy Ltd (REL), the Appellate Tribunal on Electricity has quashed a notice by the Orissa Electricity Regulatory Commission (OERC) for the suspension of licence of the three power distribution companies (distcos) managed by REL.

The tribunal, however, observed that the OERC was free to start fresh proceedings against the distribution companies, namely Nesco, Wesco and Southco.

In its January 27 order, OERC had prima facie found the distcos guilty of violating the terms and conditions of the distribution licence. OERC had issued notices to the distcos, observing that it was necessary in public interest to suspend their licence.

REL challenged the order in the tribunal on the ground that OERC had no jurisdiction to issue such a notice. The tribunal, in its interim order, had stayed the notice.

It had also withdrawn the powers of the chief executive officers of the three distcos and appointed two special officers "" VD Lulla, former member of the Central Electricity Authority and K Ranganathan, CMD of the Northern Power Distribution Company of Andhra Pradesh "" to look after the day-to -day affairs of the companies.

The tribunal had also asked the special officers to submit a report on the working of the three REL companies.

Quashing the OERC order on the ground of procedural defects, the tribunal recalled the two special officers and restored the management control of the companies to REL.

Despite the relief to REL, the tribunal observed that the company should not make use of technical deficiencies in the OERC order to shirk its responsibilities. REL, being the major shareholder in the three distcos, should see that power sector reforms succeeded in the state, it added.

REL had also raised the issue of 15 per cent increase in the Bulk Supply Tariff (BST) allowed by OERC to Grid Corporation of Orissa (Gridco) without any commensurate increase in the retail supply tariff (RST) in the tariff order of 2006-07.

The tribunal has directed OERC to re-determine the bulk supply tariff (BST), retail supply tariff (RST) and transmission tariff within six weeks of the date of the order.

It directed Gridco to collect BST at the old rate (as per 2005-06 tariff order) from December 15 till the rate is re-determined by the commission.

However, the existing BST and transmission tariff will continue. Gridco is expected to lose Rs 30 crore revenue every month on account of this.