PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO 220-221, SECTOR 34-A, CHANDIGARH

Petition No. 23/2002

Date of order: 22.5.2003

IN THE MATTER OF Petition dated 24.12.2002 filed by PSEB for the purchase of additional power to the tune of 1500 MUs for the year 2002-03

Present Sri R.S. Mann, Chairman

Sri S.K. Sharma, Member

Sri L.S. Deol, Member

ORDER

The Punjab State Electricity Board on 13.12.2002 filed a petition before the Commission for purchase of additional power to the tune of 1500 MUs for the year 2002-03. .It was stated that due to failure of monsoon in the year 2002-03, the availability of power from Hydel Power Stations got reduced and at the same time there was an increased demand in agricultural pump sets which required 9 to 10 hours uninterrupted power supply during paddy season. It was further stated that the Council of Ministers in its meeting held on October 16, 2002 considered the additional requirement of power and in the interest of farmers and economy of the State decided to further ensure 6-8 hours uninterrupted power supply for Rabi crops.

Keeping this in view, Chief Secretary to Govt. of Punjab also issued directions to the Punjab State Electricity Regulatory Commission under Section 39 of the ERC Act, 1998 to allow PSEB to purchase additional power to the extent of 1500 MUs over and above the power purchase allowed by the Commission in its Tariff Order. On this reference of the Govt. to the Commission, the Commission gave detailed response to the Govt. vide its D.O. letter No. 2193 dated November 8, 2002. In this the methodology adopted by the Commission for determining the requirement of power purchase while issuing the tariff order for the year 2002-03 was elucidated. It was highlighted in this reference that the quantum of power purchase approved by the Commission was based on assessment of energy requirement for the agricultural sector on very liberal side, hydel generation at a level much lower than even projected by the Board and the energy demand at the same level as projected by the Board. Inspite of all these factors if the Govt. still felt that there was an unavoidable necessity for purchase of additional power over and above the purchase already allowed by the Commission, the Commission had no objection to such purchase being effected by the Board provided the additional cost of power, which may be of the order of Rs.300 to 400 crores is borne in full either by the Govt. or by the Board from its own sources. However, in any case, it was not possible for the Commission to load this additional burden on the common consumers without following the due procedure of law laid in this regard including public hearings etc. in accordance with the ERC Act, 1998 and the Regulations of the Commission made there under and duly notified. In response to this communication of the Commission, the Govt. later conveyed its views stating that the Commission may consider the request of the Board for allowing purchase of additional power on merits having regard to facts and figures placed by the Board before the Commission and suitably capture the tariff impact of the same in the tariff order for the year 2003-04.

In the above cited petition, the Board also quoted directions from the Govt. of Punjab to the Board under Section 78-A of the Electricity Supply Act 1948 for ensuring 8 hours uninterrupted power supply to agricultural sector during Rabi season i.e. for the months from November 2002 to March 2003. In addition, the above cited correspondence between the Commission and the Govt. of Punjab on the issue in response to directions of the Govt. to the Commission on the matter under Section 39 of the ERC Act, 1998, were also quoted.

Subsequently on December 19, 2002 the Board filed a supplementary petition for purchase of additional power in the year 2002-03. Both the original and the supplementary petitions were disposed of by the Commission vide its order dated December 19, 2002 wherein it was noticed that the supplementary petition was based totally on new and different grounds. Moreover, the State Govt. had not been impleaded as a party though the directions were issued by the Govt. It was further observed that the petition does not contain details of purchase of additional power even though huge additional financial liability was involved. The Commission further observed that no mention was made regarding sale of additional power, the additional revenue expected therefrom, the net additional revenue gap which might result from these transactions and how this additional revenue gap is proposed to be met by the Board. On pointing out of these flaws the Board, wanted to withdraw these two petitions and file a fresh petition. The Board was permitted to withdraw the two petitions.

After withdrawing the earlier two petitions; the Board on December 24, 2002 filed a fresh petition. In this petition the Govt. was made a party by the Board. The same was heard by the Commission. An interim order was passed by the Commission on December 30, 2002 to the effect that the Commission did not consider it necessary to pass any order to allow interim relief regarding purchase of additional power already made and the Board was asked to intimate the requirement of power purchase due to applicability of ABT with effect from 1.12.2002 alongwith cost thereof and the additional revenue to be generated by sale of the energy after carefully establishing class of consumers to which the energy will be supplied. Notice was also issued to the Government. The information asked for was supplied by the Board and taken on record of the case. No reply was received from the Government and no person appeared on its behalf before the Commission. Thereupon the Commission decided on 10.03.2003 that this Petition be clubbed with the Review Petition and Annual Revenue Requirement filing of the Board for the year 2003-04, since all the issues involved in this petition are covered in the revised ARR for the year 2002-03.

The Petition has, therefore, been heard along with Annual Revenue Requirement & Tariff Application of the Board for the year 2003-04. As all the issues in the petition are interlinked with the Revised Estimates for purchase of power during the year 2002-03 which is included in the ARR filing of the Board for the year 2003-04, the issue shall be covered and decided in the order determining the ARR & Tariff for the year 2003-04. This petition is disposed of accordingly.

Sd/- sd/- sd/-

(L.S.Deol) (S.K. Sharma) (R.S.Mann)

Member Member Chairman

Place: Chandigarh

Dated : 22.5.2003