Upon Petitions of R-Infra's Delhi Discoms, APTEL directs DERC to effectively implement Fuel & Power Purchase Adjustment mechanism...

 

Reliance Infrastructure's Delhi Distribution Companies BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited BYPL) have filed and petition to the Appellate Tribunal of Electricity  for some fundamental issues relating to the functioning of the Delhi Electricity Regulatory Commission as well as certain aspects of the tariff determination for the Discoms. APTEL has issued a judgment in favor BRPL and BYPL and directed DERC to effectively implement the Fuel & Power Purchase Adjustment Mechanisms while arriving at tariff for the Discoms.

 

Major points as filed by the Discoms are:

• Adverse impact on the cash flow and financial crisis due to the acts and omissions by the Delhi Commission by failing, refusing and neglecting to perform the statutory functions.
• Ineffective implementation of an efficacious Fuel Price Adjustment.
• In spite of lapse of nearly 9 years since the enactment of the Act, 2003, there has been no effective implementation of an efficacious Fuel Price Adjustment.
• The first effective order allowing Fuel Price Adjustment was passed on 1.2.2012 giving an ad-hoc allowance of 5% and an unjustified disallowance of 5.75% from the claim of 10.75% increase as per the prescribed formula.
• The second order was passed on 1.5.2012 by the State Commission, which again gave only an ad-hoc allowance of 6% as against the claim of 7.27% increase without dealing with the backlog of the previous quarter.
• Lace of effective Power Purchase Cost Adjustment Mechanism for the tariff calculations.
• Continuous failure to determine the cost of the reflective tariff in a timely manner in terms of Part VII of the Act, 2003 resulted in an ever increasing accumulation of a Regulatory gap.
• The Delhi Commission refused to provide any recovery mechanism and amortization schedule along with carrying cost for the admitted revenue gap of nearly Rs.3658 Crores accumulated over the years.
• The Delhi Commission refused to follow the directions and findings of this Tribunal in three direct judgments related to Delhi Commission since 2009 on the basis that the Delhi Commission has already proposed to file Appeals in these cases before Hon’ble Supreme Court.

APTEL after hearing to the pleas of both the parties have given the following judgments:

• The Petitions filed by the Discoms under Section 121 of the Electricity Act, 2003 are maintainable.
• The refusal by the DERC to implement the judgments of this Tribunal would amount to judicial indiscipline and is against the settled position of law. Mere filing of the Appeal or proposal to file the Appeal would not amount to the effect of automatic stay of the Tribunal’s judgment.
• However, in view of the affidavit filed by Delhi Commission in Appeal No.14 of 2012 and submissions made in these petitions, any penal actions against the DERC are not proposed except to advise it to correct its mistakes committed earlier and follow the directions issued by APTEL in future.
• As regards recovery/amortization schedule of the admitted regulatory assets and effective implementation of Fuel & Power Purchase Adjustment mechanism, DERC is directed to take immediate action in pursuance to the directions given in OP No.1 of 2011 dated 11.11.2011.

The full judgment as issued by APTEL can be downloaded from here.

Source: ATPEL