OERC revokes licences of three Reliance Group discoms

The Odisha power regulator OERC today revoked licences of three power distribution companies controlled by Anil Ambani-led Reliance Energy for allegedly disobeying its orders on improvement in power supply efficiency.
Revoking the licence, Odisha Electricity Regulatory Commission (OERC) appointed state-owned Grid Corporation of Odisha (Gridco's) Chairman-cum-Managing Director as administrator of the three discoms NESCO, WESCO & SOUTHCO which transmits power to northern, eastern and southern areas of the state.
The regulator added that licences of Reliance Energy- owned discoms were cancelled for disobeying of previous orders of OERC on improvement in power supply efficiency among other reasons.
The OERC order said the distribution companies have failed to invest in improving distribution infrastructure. The company was seeking frequent upward revision of tariff without caring for reduction of aggregate technical and commercial (AT&C) losses.

"The discoms did not invest anything from their own funds to improve infrastructure, which forced the Commission to revoke their licence," Principal Secretary, Energy, Suresh Chandra Mohapatra, told reporters here.
When contacted, Reliance Group did not offer any comment.

In 2005 the state government had revoked the license of the three discoms, who then challenged it and moved the Central Electricity Regulatory Commission (CERC) and the Supreme Court.
As performance of the companies never improved, the OERC had lodged a suo motu case against them along with a show cause notice asking why their licence should not be revoked.
Mohapatra said though the discoms worked for 15 years, the improvement was not satisfactory. They were unable to bring down the AT & C losses, which stayed at 40 per cent in contrast to Delhi and Mumbai where the loss was only 15-20 per cent.

The OERC order said the GRIDCO CMD will function under the supervision and control of the principal secretary to the department of energy, Government of Odisha as far as the administration of the distribution utilities are concerned.