iconimg Sunday, March 29, 2015

implications without approval Navneet Sharma, Hindustan Times
Chandigarh, July 19, 2013
In what may lead to a confrontation, the Uttar Haryana Bijli Vitran Nigam (UHBVN) has taken on the state power regulatory body for imposing curbs on powers to issue instructions having financial implications on the consumers without its prior approval.
In an application to the Haryana Electricity Regulatory Commission (HERC), the power utility has sought withdrawal of the instructions, questioning the direction not to issue any sale circular that has a financial impact or alters the relationship between the power utility and the consumer without prior permission. The discom also quoted Section 86 of the Electricity Act, 2003, in its application, saying nowhere it stated that the commission could issue such a direction, sources said.

The regulatory commission gave the instructions three years ago when the two state-owned power distribution companies, UHBVN and DHBVN, which have not implemented several of its directions, had issued "sales circulars" having financial implications directly and indirectly without taking the prior approval.

Though any change in electricity rates or other charges requires approval of the regulatory body, discom officials, in their eagerness to please their political bosses, have been issuing sales circulars to implement their populist announcements for select category of consumers without specifying subsidy support or how the two companies would be compensated.

The commission has not been taking cognisance of sales circulars such as concessions for connections issued in the name of women, change in the supply category of elementary schools and fresh concessions in the slab system rates for agriculture pump-set consumers while determining the annual revenue requirement (ARR) of the two power utilities.

The ARR is determined by the commission based on which revenue gap is worked out and tariff realigned. It also decides the schedule of general and miscellaneous charges. "Any changes in these will alter the balancing of revenue requirement and tariff," sources said.

When contacted, HERC director (tariff) Sanjay Varma said that as per the terms and conditions of the licence issued to the distribution companies, they are under statutory obligation to abide by all rules, regulations, orders and directives issued by the commission.

The HERC has fixed the hearing on the UHBVN application on July 25. This is, however, not the first instance where the power companies have tried to question a decision of the state power regulator.

At a recent hearing, a discom representative had accused the commission of trying to "usurp" the powers of Consumer Grievances Redressal Forum. The commission led by RN Prasher, a retired IAS officer, reacted strongly to the charge and the power utility representative apologised for the remark, promising to withdraw it in writing.