Power supply firm at court’s door

Cuttack, May 24: Engineers of Western Electricity Supply Company (Wesco), Orissa, moved Orissa High Court to seek the annulment of the “arbitrary” hike in Bulk Supply Tariff for 2007-08.

The supply firm has also challenged the continuance of the escrow mechanism between Wesco and Gridco, for the realisation of Gridco dues.

The Engineer Services Association of Wesco has alleged that a 45 per cent hike in tariff has pushed the distribution company to “severe financial crunch”. It has made the firm unable to foot the monthly employee salary bill of Rs 9.12 crore. Besides, employees also face deprivation of other statutory dues like EPF, not to mention terminal benefits of retiring workers, the petitioner association have leaded. Wesco, as a distribution licensee, has operation areas in and around districts of Sambalpur, Sundergarh, Deogarh, Bargarh, Nuapara, Kalahandi, Sonepur, Jharsugada and Bolangir. At present they have a total workforce of 4,998 employees.

To supply power to consumers within 48,000 sq km, Wesco purchases power with an annual transmission charge from Orissa Power Transmission Company Ltd, and with an annual bulk charge from Gridco.

Orissa Electricity Regulatory Commission (OERC) determines charges for both the transmission and bulk supplies annually.

According to the Wesco petition, three distribution-companies, including Wesco, had challenged the Bulk Supply Tariff and Retail Supply Tariff orders of OERC for 2006-2007.

In a combined order on December 11, 2006, the appellate tribunal found various “irregularities” in the process of determination of tariff and set aside the annual revenue requirement (ARR) projection of Gridco for 2006-2007 and the BST approved by OERC. “So there were basically no parameters for determination of Bulk Supply Tariff for 2007-08,” the petition claimed. Also an escrow mechanism was created by which an escrow account was opened with Union Bank of India, called the escrow agent, into which Wesco was required to credit all the receivables to defray the dues of Gridco for power supply.

Wesco has to deposit all collections compulsorily in the escrow account, but it has no power or authority to operate it. To meet its establishment and salary expenditures Wesco has to submit a written request every month to Gridco.

“It has to manage with the amount Gridco allows to be withdrawn from the account, which is invariably less and sometimes not even adequate to meet the statutory dues of existing and retired employees,” the association pleaded.

“Moreover as per the said arrangement Wesco is also required to open ‘letter of credit’ in favour of Gridco with the escrow agent to further secure the payment of all monthly amount dues payable from Wesco to Gridco,” the petition added.