The Telegraph
Since 1st March, 1999
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Tribunal breather for REL Orissa units

Bhubaneswar, Dec. 15: The appellate tribunal for electricity has quashed the showcause notice issued to three power distribution companies managed by Reliance Energy Limited (REL) over suspension of distribution licence, giving the power company an early Christmas breather.

On January 27, The Orissa Electricity Regulatory Commission (OERC) had issued the notice to REL-managed Wesco, Southco and Nesco, asking them to explain why their distribution licences should not be revoked. The notice followed a petition by Sarat Chandra Mohanty, general secretary of the All Orissa Electricity Workers’ Federation, seeking nullification of licence.

It had then been observed that the three companies violated the terms and conditions of distribution and it was necessary in public interest to suspend their licences. The power major challenged the OERC order in the tribunal.

In an interim order, the tribunal withdrew the managerial, administrative and financial powers of the three companies. It appointed former member of the Central Electricity Authority V.D. Lulla and chairman-cum-managing director of Northern Power Distribution Company, Andhra Pradesh, Kallal Ranganatham as special officers to look after the day-to-day affairs of Wesco, Southco and Nesco.

While quashing the OERC order for its “procedural” defects yesterday, a division bench of the tribunal comprising Justice E. Padmanabhan (judicial member) and H.L. Bajaj (technical member) said the commission was free to initiate fresh proceedings against the three distribution companies treating them as separate corporate entities.

The tribunal also recalled the two special officers — Lulla and Ranganatham — it had appointed in June and restored the management with REL, the major stakeholder in the companies.

The tribunal chastened REL for not doing enough to ensure that power sector reforms succeeded in the state. It also directed the commission to determine the bulk supply tariff (BST), retail supply tariff (RST) and transmission tariff (TT) within six weeks from the date of the order.

The tribunal asked Gridco to charge the old BST (2005-06) from December 15 till the commission determined the new rates. The existing RST and TT would, however, continue.

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