SCO NO. 220-221, SECTOR
34-A,
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
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
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
Dated: 08.08.2011