REL gets back management control over three distribution companies
Friday, December 15, 2006
REL gets back management control over three distribution companies

Bhubaneswar: In a major relief to the Reliance Energy Limited (REL) having management control over three distribution companies (distcos) in the State, the Appellate Tribunal for Electricity has quashed the show-cause notice issued to the distcos for suspension of distribution licence.

While quashing the OERC order showing procedural defects, a division bench comprising Justice E Padmanabhan (judicial member) and HL Bajaj (technical member) said the commission is free to initiate fresh proceedings against the three distcos.

The tribunal recalled the two special officers - VD Lulla, former member of Central Electricity Authority, and K Ranganatham, CMD of Northern Power Distribution Company of Andhra Pradesh - it had appointed for the three distcos and restored the management with REL, the major stakeholder in the companies.

In its January 27 order, the commission had observed that prima facie, the distcos have violated the terms and conditions of distribution licence and it is necessary in public interest to suspend their licence. The commission appointed an administrator for each of the companies.

REL challenged the order on the ground that OERC has no jurisdiction to issue show-cause to a non-licensee. The tribunal while staying the operation of the OERC order had appointed the two special officers.

REL should not take shelter under such technical grounds, the tribunal said and added that it being the major shareholder in the three distcos it should ensure that the power sector reforms succeeded.

The tribunal has also directed OERC to determine the bulk supply tariff (BST), retail supply tariff (RST) and transmission tariff within six weeks from the date of this order. It also directed Gridco to charge the old BST (2005-06) from December 15 till the commission determines the rate.
However, the existing RST and transmission tariff will continue. Gridco will sustain a loss of Rs 30 crores if it implements the appellate tribunal order, sources in the company said.

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