PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

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

 

Petition No. 4 of 2004.

Date of order : May   7 , 2004.

 

In the matter of :         ARR & Tariff Application of Punjab State Electricity Board for the FY 2004-05  -  Application filed by the PSEB for withdrawal of ARR & Tariff Application – Letter dated 21.4.2004 from the Board to the Commission.

 

 

Present:           Sh. R.S.Mann, Chairman.

                                    Sh. L.S.Deol,   Member.

 

 

 

ORDER:

This is with reference to the Commission’s Order dated April 6, 2004 in the matter of application filed by the Board for withdrawal of Annual Revenue Requirement and Tariff Application filed by it earlier for the Financial Year 2004-05.  In the said Order the Commission had allowed withdrawal of ARR and Tariff Application already filed by the Board for the Financial Year 2004-05.  The Commission had also adjudicated on various associated issues linked with such withdrawal such as laying down deadline for filing of the new ARR and Tariff Application, continuance of present tariff structure and other linked matters.

 

2.         The Board vide its letter dated April 21, 2004 addressed to the Commission has stated that in the petition for withdrawal of ARR and Tariff Application, it was also prayed by the Board that the Board be allowed to procure power from the Central Sector Generating Stations so as to meet energy demand to enable the Board to provide reliable and adequate power to all sectors of consumers. It is further stated that the summer heat has picked up early this year and with no rainfall till now, the energy demand has gone up by 30% over the last year.  It is stated that to meet this situation, the Board is continuing to procure power from the Central Generating Stations as per the requirement already filed with the petition so as to minimize power cuts in the State.  It is finally prayed that the Board be allowed to continue to procure power from Central Generating Stations as per requirement filed with the petition upto September 2004 and as per Tariff Order for the year 2004-05 after it becomes available

 

3.         In this connection it is noted by the Commission that the issue regarding approval for continuing power purchase from Central Generating Stations was not raised by the Board  any where in the prayer or in its petition for withdrawal of ARR dated February 27, 2004.  It is true that the issue was mentioned by the Board in its supplementary affidavit dated March 31, 2004.  However, even here the mention on this matter has not been made as a part of prayer.  This led to non-adjudication on the matter by the Commission. The Board is advised to specifically mention all matters requiring adjudication by the Commission under  ‘prayer’ in future.

 

4.         In the instant case, the Commission does accept the fact that continuance of purchase of power from Central Generating Stations is a matter intrinsically related to the ARR of the Board.  The Commission also accepts that the withdrawal of ARR should not come in the way of continuing power purchases from Central Generating Stations by the Board. This is in view of the fact that the quantum of generation of power by the Board is not sufficient to meet the demand of power and as such some purchases from Central Generating Stations are necessary. Discontinuance of such purchases will lead to substantive power cuts in the whole of the State of Punjab, which would not be in the interest of the consumers. In fact substantive power cuts will not be in the interest of the Board or the Government as well. The Commission also notes that such purchases are generally at very competitive rates and as such in the interest of consumers as well.  It is only if quantum of purchases is substantially high that the Board has to resort to such purchases from some Generating Stations at high cost.  It is, therefore, vitally important to regulate such purchases and maintain balance between the cost and the quantum of such purchases.  The Commission further notes that though the Board may have projected certain quantum of power purchases for the year 2004-05 in its ARR, the Board has on its own chosen to withdraw the ARR. Accordingly the Commission has not examined or adjudicated on the issue at all.  As such, it is not possible or appropriate for the Commission to go by the projections for such power purchases as made by the Board in its ARR especially in view of varying cost of power purchases with variation in quantum. The Commission feels that the more appropriate way would be to go by the power purchases allowed from various Central Generating Stations by the Commission in its Tariff Order for the year 2003-04.

 

5.         The Board is accordingly allowed to make power purchases from different Central Generating Stations upto the quantum allowed by the Commission in its Tariff Order for the year 2003-04. The power purchase should be made on merit basis. This quantum being for the whole year, the Board can plan its purchases for different periods on pro rata basis or deviate therefrom at its own discretion.  However in case the Board purchases power in deviation of the quantum reached on pro rata basis, the Board will have to make specific submissions before the Commission to explain such deviations and the Commission will be free to allow for such deviations or otherwise at the time of examination of the Annual Revenue Requirement and Tariff Application for the year 2004-05 to be filed by the Board.

 

Sd/-                                                                  Sd/-

 

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

                          Member.                                                      Chairman.

 

 

Chandigarh

Dated: May  7, 2004.