PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO NO. 220-221, SECTOR 34-A, CHANDIGARH

 

 

                                                                        Date of Order:   08.08.2011

                                                                                               

 

In the matter of :       Compliance of the directions of the Appellate Tribunal Judgement dated 25.2.2011 passed in Appeal No.5 of 2008 and Appeal No.63 of 2008 filed by Steel Furnace Association of India, Ludhiana and Government of Punjab, Department of Power, respectively against the PSERC Order dated 13.9.2007.

 

                                               

Present:                    Smt.Romila Dubey, Chairperson

                                    Shri Virinder Singh, Member    

                                    Shri Gurinderjit Singh, Member

 

 

 ORDER

 

 

            The Appellate Tribunal for Electricity rendered a common Judgment dated 25th February, 2011 in Appeal No.5 of 2008 and 63 of 2008 filed against Order dated 13.9.2007 passed by the Commission.

      

 2.        Steel Furnace Association is the Appellant in Appeal No.5 of 2008, The Govt. of Punjab is the Appellant in Appeal No.63 of 2008. The issues in Appeal No.5 of 2008 are as follows:

 

“1.        Allocation of cost of Ranjit Sagar Dam Project between the Electricity Board and the Irrigation Department;

2.         Diversion of funds towards meeting out revenue requirement of the Electricity Board;

3.         Determination  of  category-wise cost of supply.”

 

            The Appeal No.63 of 2008 filed by the Punjab Govt. is against the decisions of the Commission wherein the Commission in its various tariff orders had decided to pass on the part of interest liability, paid by the State Electricity Board on funds diverted from Capital to Revenue works, to the State Govt.

3.         In its Summary of Findings, the Aptel has observed as under:

(a)       Appeal No.63 of 2008

“The State Commission correctly decided to burden the Appellant the interest on diverted fund to the tune of Rs.289.92. The interest cost of Rs.289.92 crores is directed to be disallowed from the interest payable on Government loans in the ARR for the year 2006-07 when the same is reviewed in the Tariff Order for the year 2007-08. This amount shall not be paid by the Board to the State Government. If it is already been paid the State Government will refund this amount to the Board. This will result in relief of Rs.289.92 crores to the consumers.

In view of our above findings, we do not find any merit in this Appeal No.63 / 2008 as such it does not call for interference. Accordingly, this Appeal is dismissed. No order as to costs.”

            (b)       Appeal No.5 of 2008:

“I.         The State Commission has complied with the directions of the Tribunal given in the remand order on issues (1) & (2),

II.         On the third issue the State Commission is again directed to carry out the Tribunal’s directions of determining category wise cost of supply and setting limit of consumption for subsidized consumers for which support through cross subsidy may be provided.”

4.         The Commission notes that the Tariff Order for the year 2005-06 was issued on 14.6.2005. Aggrieved by this Tariff Order of the Commission, the Power Intensive Industrial Consumers filed appeals against the Tariff Order with the Appellate Tribunal. In their appeals the Industrial Consumers emphasized that tariff needs to be based on the cost of supply of electricity to each category of consumer having regard to voltage at which supply is made available. The Appellate Tribunal disposed of these appeals in its judgment dated May 26, 2006. In Para 119 of its judgment, the Tribunal directed as under:

i.          The Commission shall determine the cost of electricity to different class and categories of consumers;  

ii.         The Commission shall also determine the average cost of supply;

iii.        Once the figures of cost of supply and average cost of supply are known, the Commission shall determine the extent of cross subsidies added to tariff in respect of each class/category of consumers; and

iv.           The consumers who are being cross subsidized by the Commission, a limit of consumption shall be specified for which special support through cross subsidy may be provided. Once the consumer exceeds the limit, he shall be charged at normal tariff. These directions shall be applicable from the next tariff year onwards.

In compliance of the directions of the Aptel, the Commission passed impugned Order dated 13.9.2007.

5.         The Commission dealt with the directions of the Aptel  with regard to  setting limit of consumption for subsidized categories in its Tariff Order for the year 2007-08 as under:-

“Commission notes that the first slab of Domestic Supply and Agricultural Power consumers are the only two subsidized categories in the State. A subsidized tariff is charged in the case of Domestic Supply only up to a limit of the first 100 units after which a higher tariff becomes payable. In the case of AP consumers, it is necessary to observe that out of a total of about 9.5 lac such consumers, only 13441 connections are presently metered. The Board which had been directed to effect 100% metering in the past has expressed its inability to achieve this objective in the near future for reasons that have to do both with the cost affectivity of the proposed metering and the resistance experienced from the consumers in installing the meters. While the Commission on its part has clarified to the Board that it is unable to review its earlier directive for comprehensive metering of agricultural power connections, the fact remains that the Board has yet to take any concrete steps in this direction. There may be several practical difficulties in evolving a normative limit for subsidized agricultural consumption given variations in agro-climatic conditions and differing cropping patterns in the State. Even if such a norm could over time be evolved, practical enforcement of minimum consumption limits for each consumer would be impossible in the absence of complete metering of agricultural connections. In these circumstances, it has not been possible for the Commission to fix a limit on subsidized consumption in the case of AP consumers.”

 

6.         The Commission in its Tariff Order for the year 2011-12 has again directed the PSPCL (licensee) to comply with the requirements of the Electricity Act, 2003 for 100% metering of all the connections including AP. The Commission is also conscious of the provision of Tariff Policy wherein it is provided that the tariff should progressively reflect the cost of supply of electricity with tariffs being brought within ±20% of the average cost of supply latest by the end of 2010-11. Going by the provisions of the tariff policy, the Commission has progressively reduced the cross subsidy level of the subsidized categories and in its Tariff Order for the year 2011-12, the subsidized categories are within ±20% of the average cost of supply.

7.         So far as determination of category-wise cost of supply is concerned, the Commission had been directing the Board (now PSPCL) in its various Tariff Orders to have a study undertaken in this regard and submit its findings to the Commission. The Commission observes that the licensee has already appointed the consultants for conducting cost of supply study and the results of such a study are expected in near future.

 

           

Sd/-                                                     Sd/-                                    Sd/-

(Gurinderjit Singh)                           (Virinder Singh)                (Romila Dubey)

Member                                               Member                             Chairperson                                         

Chandigarh

Dated:  08.08.2011