It is stated in the petition that shortage of power vis-à-vis unrestricted requirement of power is also anticipated during the year 2004-05 and the PSEB shall have to impose power cuts, peak load hour restrictions and take other power regulatory measures for maintaining efficient supply and equitable distribution throughout the State of Punjab during the year. It is stated in the petition that previously such orders used to be passed by the Government under Section 22-B of the Indian Electricity Act, 1910 and that with the coming into force of the Electricity Act, 2003, PSERC is empowered under Section 23 of the Electricity Act, 2003 to issue orders in this regard.

The petition was taken up for hearing on March 22, 2004 and the Board was directed to file additional information regarding power cuts actually imposed by the Board during the last 2-3 years along with the financial impact. The Board was also directed to file similar details for power cuts proposed to be imposed by it during the year 2004-05.

The petition was again taken up on March 31, .2004 on which date the Board filed the required information.

Vide order dated April 12, 2004 public notice for inviting objections from public on the petition of the Board was ordered to be issued. Meanwhile past practice in this regard was allowed to be continued for three months i.e. upto June 30, 2004 on the same pattern as allowed by the Government during the previous year.

Accordingly, Public Notice was issued for inviting objections from public. In response three objections were received from various organizations. The objections were sent to the Board for its comments. The Board filed comments on June 10, 2004.

The objectors have raised various issues in their objections. M/S United Cycle & Parts Manufacturers Association has raised issues such as adoption of other alternatives by the Board to cover the alleged deficit in power, minimizing line losses, taking steps to eliminate or reduce theft in power, raising the limit of power that can be used by the industries during peak load hours without payment of any additional charges, reduction of peak load exemption charges etc. M/s Steel Re-Rolling Mills Association of India, Mandi Gobindgarh has accepted necessity of taking such power regulatory measures as power cuts, peak load hour restriction, weakly off days for the industries etc. It has simultaneously raised issues such as justification of continuing monthly minimum charges, reduction of distribution losses and granting of incentives to industries for this purpose, incentive for maintaining higher power factor, monthly charges based on sanctioned contract demand and not on connected load, concessional rates for power supply during night hours. The Consumers Protection and Grievances Redressal Forum has raised number of issues affecting the domestic consumers. These include increasing availability of power during paddy season through national grid or from neighbouring States, installation of micro-hydel projects, energy accounting, incentive for night tariff, reduction of T&D losses, encouragement of captive generation, steps for power conservation, pre- scheduling of power cuts etc. They have also suggested number of measures required to be taken by the Punjab Government such as rain harvesting, diversification of agriculture, harnessing of hydro electric power etc.

The Board in its reply has given exhaustive comments covering these issues. They have also given status and position of the Board on these issues.

The Commission has gone through the contents of the objections raised by the public and the response of the Board thereon. Taking into consideration these and other factors relevant to the case, the Commission agrees that there is basic necessity for imposition of regulatory measures including peak load hours restrictions, regulating agricultural power supply and power cuts to ensure smooth functioning of the power system. Accordingly the Commission decides that the Board is authorized to adopt these power regulatory measures for ensuring smooth functioning of the power system in the State. The Commission, at this stage, however, does not fully accept the projections of demand and availability of power indicated by the Board in its reply. The Commission also does not accept the extent to which relief through such power regulatory mechanism is sought by the Board. The decision on these issues can be taken by the Commission only after more information on the issues is supplied by the Board in its Annual Revenue Requirements and Tariff Applications for the current year. The Commission also needs wider based public participation and discussions and public hearings before finally adjudicating on these issues. Meanwhile seeing urgent necessity of undertaking power regulatory measures, the Commission authorizes the Board to undertake such power regulatory measures. Such measures are, however, to be taken only to the minimum extent to ensure least disturbance, dislocation and inconvenience to the consumers and general public while keeping in view the requirements of the power system. The Board will also ensure that purchase of power for this purpose is only for the minimum quantum and at minimum cost. In case the Commission feels that such power purchases have not been prudently made or have not been made at reasonable cost, the Commission reserves the right to disallow such costs while determining the Annual Revenue Requirements of the Board. Similarly in case the Commission feels that there has been avoidable loss of revenue to the Board due to unreasonable power cuts to the consumers in general or to a particular category of consumers, the Commission reserves the right not to take into consideration such loss of revenue while determining the Annual Revenue Requirements. The Commission is of the opinion that in general, burden of extra cost to the Board on account of avoidable power purchases or loss of revenue due to power cuts, cannot be allowed to be passed on to the consumers who did not in any way gain from such measures. Such burden will therefore necessarily have to be borne either by the Board or the Government or the class of consumers for whose benefit extra costs were incurred. The Commission therefore directs that the Board may undertake such power regulatory measures so as to cause minimum dislocation to public and to ensure minimum cost in power purchase and minimum loss of revenue to the Board.