Before the
MAHARASHTRA ELECTRICITY REGULATORY
COMMISSION
13th
floor, Centre No.1, World Trade Centre, Cuffe Parade, Mumbai 400 005.
Tel. 22163964 /
22163965, Fax No. 22163976
E-mail mercindia@mercindia.com
Website: www.mercindia.com
CASE No. 9 of 2003
In the matter of
Petition filed by M/s Balaji
Electro Smelters Ltd., Yavatmal
In respect of Commission's
Order dated 24.3.2003 in the matter of withdrawal / termination of wheeling of
NTPC Power from 15% unallocated quota
to export oriented Ferro Alloy Industries
Shri P. Subrahmanyam, Chairman
Shri Jayant Deo, Member
Dr Pramod Deo, Member
O R D E R
Dated: July 21, 2003
M/s Balaji Electro Smelters Ltd. (BESL), Yavatmal have filed a
Petition on 30.4.2003 seeking review of the Commission's Order dated 24.3.2003
in Case No. 39 of 2002 in the matter of their original Petition regarding
withdrawal/ termination by the Maharashtra State Electricity Board (MSEB) of
wheeling NTPC Power from the 15% unallocated quota to export oriented ferro
alloy industries. The Review Petition
has the following prayers:
a) i. Provide power to the Petitioner at a
special tariff @ 194 paise for KWH on the basis of actual 2% T&D losses and
without the burden of cross subsidy and allow Power Factor and Bulk Discount
incentives with effect from April 1, 2003;
ii. To direct the Respondent Board to furnish a
break up of the NTPC tariff and revise its charge as per the applicable tariff
without penalties etc. and actual NTPC
pooled tariff in the break up from 1999 and credit the excess paid by the
Petitioner to its account;
b) Pending the
hearing and final disposal of this petition, this Hon'ble Commission be pleased
to direct the Respondent its servants, agents, subordinates and
successors-in-office be directed to permit the Petitioner to effect payment of
its electricity bills at NTPC Tariff, till the disposal of this petition by
issuance of final orders in the matter of providing special tariffs, to
facilitate the Petitioner executing committed export orders in hand;
In their supplementary affidavit dated 13.5.2003, BESL have set out
additional grounds, and also modified the prayer at (a) (ii) and (b) above to
read as follows:
a)
ii)
To direct the Respondent Board
to furnish a break up of the NTPC tariff and revise its charge as per the
applicable tariff without penalties etc.
in the break up from 1999 and to charge actual NTPC pooled tariff with
6% transmission losses and credit the excess paid by the Petitioner to its
account;
b) Pending the hearing and final disposal of this
petition, this Hon'ble Commission be pleased to direct the Respondent its
servants, agents, subordinates and successors-in-office to continue supply of
power at NTPC Tariff and consequently raise billsand/or permit the Petitioner
to effect payment of its electricity bills at NTPC Tariff, till the disposal of
this petition by issuance of final orders in the matter of providing special
tariffs, to facilitate the Petitioner executing committed export orders in
hand;"
The
Review Petition was heard for admission on 16.6.2003.
2. In their Petition and other written
submissions, BESL have stated that, considering the high cost of power on
account of cross subsidization etc, which made it difficult for ferro alloy
industries, which are power intensive, to compete in export markets, and
considering the representations received from them and consultations with other
authorities concerned, the Ministry of Power (MoP), Govt. of India, decided in
1994 to allocate NTPC power from the unallocated quota to the export oriented
ferro alloy industries through the SEBs at the NTPC rate with wheeling charges,
etc. BESL, with the concurrence of the
State Govt., was provided NTPC power under the scheme from 1996 onwards for
certain hours. Various issues had
arisen with MSEB which were decided upon by MERC, lastly under the Order dated
24.3.2003 which is sought to be reviewed.
3. BESL have stated, that subsequent to MERC's
Order, they came to know on 1.4.2003 of a letter dated 11.3.2003 (the copy of
this letter submitted as an Exhibit in Case No. 10 of 2003 bears the date
17.3.2003) of MoP addressed to the Central Electricity Authority (CEA) to the
effect that, in view of changed circumstances, viz. the establishment of State
Regulatory Commissions, implementation of ABT, extra burden on the unallocated
quota in view of power shortages, and the special tariff provided to Ferro
alloy units in various States, etc., the 1994 scheme of allocation of NTPC
Power to such units would be discontinued from 1.4.2003. The power so withdrawn would be reallocated
to the concerned States, and the ferro alloy units need to approach the
concerned SERC for providing special tariff for them. BESL have submitted that the directives dated 11.3.2003 of the
MoP were communicated to them only on 1.4.2003, i.e. after the Commission passed its Order. Therefore, this fact could not be brought to the notice of the
Commission during the original proceedings.
They contend that this communication constitutes disclosure of a new and
important matter of fact which was not within BESL's knowledge before the
original Order was passed and would, therefore, justify the admission of the
Petition for hearing on merits and for grant of the interim reliefs prayed for.
In effect, the communication of the discontinuance of NTPC power communicated
by MSEB on that basis would result in negating the Order passed by the
Commission. BESL pointed out that, in
their letter dated 11.3.2003, MoP themselves have clearly stated that the ferro
alloy units need to approach the concerned SERC for provision of power at a
special tariff.
4. Referring to the Commission's direction
in its Order dated 24.3.2003 to MSEB to rectify the bills issued to the
applicant and give necessary credits to correctly reflect the outstanding and
avoid billing disputes, BESL had pursued the matter with MSEB, but they have
neither refunded the amount nor replied to them.
5. BESL have given
details of the special tariff provided in States such as Andhra Pradesh,
Orissa, Chattisgarh & Meghalaya to ferro alloy units, not restricted to
exporting units. Their Petition also
sets out various computations in support of their claim for the particular tariff
that should be made applicable to ferro alloy units subsequent to the
discontinuance of the MoP scheme.
Amplifying on these contentions, in oral arguments, Shri Bharucha,
Counsel for BESL, submitted that MoP had withdrawn the scheme considering the
changed circumstances set out in their letter, but that letter also shows that
they are satisfied that the industry requires a special dispensation with
regard to tariff for which they should
approach the concerned ERCs.
Accordingly, the matter has now been entrusted to MSEB on terms to be
decided by the Commission, MoP having divested themselves of such discretion. Counsel for BESL submitted that it is MSEB's contention that the
Review Petition is not maintainable since the principal Order no longer subsists
in view of the withdrawal of the scheme itself by MoP. He submitted, however, that the MoP scheme
was in force uptil 31.3.2003, i.e. for some period after the Order was
passed. He submitted that the Review
Petition had been filed under the ERC Act, but similar relevant provisions were
contained in the new Electricity Act, 2003.
The Petition invokes the powers of the Commission to determine tariff
under Section 22 and Section 29(2)(e) which enjoins that the tariff should take
into account consumer interest.
Moreover, under Section 29(3), although no undue preference can be
shown, the tariff can differentiate on the basis of purpose. These matters are within the exclusive
domain of the Commission.
6. Counsel for BESL
also drew attention to Regulation 24 which establishes the Commission's
threshold jurisdiction and procedure, and enables "any affected or
interested party" to approach it.
When the Regulation states that "the Commission may initiate any
proceedings", the word 'may' must be equated with 'shall' in view of the
exclusive jurisdiction conferred under Sec.22 and 29, and Counsel subsequently
submitted Supreme Court judgments in support.
He contended that the Commission would necessarily have to entertain the
Petition under Regulation 24. The only ground on which admission could be
declined would be if BESL are not an
interested or affected party. That is
clearly not the case since BESL continue to be a ferro alloy exporter to whom
the 1994 scheme had been applicable.
7. Counsel for BESL submitted that Sec.22 of
the ERC Act states that, subject to Chapter 3, the Commission "shall
discharge" certain functions. These are duties, and, therefore,
responsibilities. Sec 22(1)(a) makes
clear the Commission's exclusive jurisdiction with regard to tariff. Sec 22(1)(b) is not relevant except to the
extent of wheeling charges. The other
sub-clauses are also relevant in view of cross subsidies and unjustified costs
of MSEB. Under Sec.29, the tariff
"shall be determined by the Commission" having regard to various
factors. While conceding that policy
matters are to be dealt with elsewhere, he submitted that the statute also
recognizes the Commission's role in this regard by providing for a State
Advisory Committee and for advice to the State Government. He submitted that BESL are not asking the
Commission to issue directions to NTPC, MoP or the State Government, who are
therefore not necessary parties. Thus,
admission can be denied only if MSEB shows that BEL are not an affected or
interested party.
8. BESL Counsel submitted further that
MSEB's contention that the Petition is bad for misjoinder is not correct
because no directions have been sought against the Central Government and,
therefore, they are not concerned.
Moreover, if, after admission, the Commission feels it necessary, it has
statutory powers under Regulation 40 to issue notice to anyone. Regulation 55 is also relevant in this
regard.
9. In their written reply, and in oral
arguments MSEB, through their Counsel, Ms. Deepa Chawan, pointed out that the
reliefs sought in the Review Petition are altogether different from those
sought by BESL in their original Petition in Case No. 39 of 2002 leading to the
Order dated 24.3.2003. Thus, MSEB
contend that BESL have, in effect, filed a totally new Petition in the guise of
seeking review, and that it deserves to be dismissed on this ground alone.
10. MSEB submitted that, in accordance with the
decision of MoP, they have stopped wheeling of NTPC Power to BESL w.e.f.
1.4.2003 and have, accordingly, billed them from 1.4.2003 onwards as per the
MSEB tariff applicable to them.
11. MSEB have pointed out that the Commission's
Order dated 24.3.2003 directed MSEB to maintain the status quo until such time
as clear directives were received from MoP on the policy of wheeling of NTPC
Power. Such directives have been given
by MoP through their letter dated 11.3.2003 and, therefore, the Commission's
Order is no longer in force. Therefore,
the question of reviewing it does not arise.
Moreover, any claim for review has to meet the test of Regulation 87,
and no ground has been given by BESL to justify admission under that
Regulation.
12. As far as the mention by MoP in their
letter that the Commission be approached for a special tariff, MSEB submitted
that MoP cannot issue directions to the Commission, nor is it, in fact, a
direction. Although the Commission
admittedly has absolute powers to decide the tariff and the categories, this
would have to be in the form of a proper tariff proposal for ferro alloy industries
and not in isolation. Finally, MSEB
pointed out that MoP were a necessary party, but have not been joined by the
Petitioner.
13. The Commission notes that, essentially,
BESL are seeking review of the Commission's Order dated 24.3.2003 on the ground
that the discontinuation of MoP's 1994 scheme by their letter dated 11.3.2003
came to be known to them only on 1.4.2003, after the Order in their original
Petition was passed and the proceedings closed. BESL contend that, thus, a new and important matter of fact had
become available which would materially affect it and justify review of the
Order. Counsel for BESL has also
argued, with regard to the prayers relating to the determination of a special
tariff, that review or tariff fixation is a matter of procedure, and rules of
procedure cannot take away substantive jurisdiction. If the prayer for determination of a special tariff is not
covered within the ambit of a review, then it can be taken up as a plea from an
aggrieved consumer. The Commission notes
that, as pointed out by MSEB, the prayers in the Review Petition are altogether
different from the prayers in the original Petition on which Orders were passed
on 24.3.2003. In that Order, the
Commission had disposed of the Petition while directing:
i)
MSEB to maintain the status quo ante in the
matter till the emergence of clear directions in the matter of the MoP policy
review, since the Petitioner has met his obligations for availing of such
power.
ii)
MSEB to rectify the bills already issued to
the applicant in line with direction (i) above and give necessary credit to
correctly reflect the outstanding and avoid billing disputes arising out of the
same.
iii)
That the right of MSEB to argue its case for
review of the present scheme / policy before the Commission covering all the
legal points is upheld without prejudice.
14. Essentially, in the original case, the
issue was whether MSEB were entitled to unilaterally discontinue a dispensation
which had been mandated by MoP, ostensibly on the ground that the scheme provides
for review at regular intervals and on account of various other factors. It is clear from the original prayers as
well as the directions given in the Order that the status quo was to be
maintained inter alia, until such time as clear directions to the contrary were
received from MoP. Under their letter
dated 11.3.2003 discontinuing the scheme from 1.4.2003, such directions have
now been given. Therefore, the case does
not subsist.
15. The prayers and reliefs sought in the
original Petition in Case No. 39 of 2002 were as follows:-
i)
To direct the MSEB to withdraw the notice
dated 23/07/2002 for discontinuation of NTPC power,
ii)
To restrain the MSEB from reviewing the policy
of the Ministry of Power in respect of wheeling of NTPC power to export oriented
Ferro Alloy Industries, and to restrain them from charging tariff different
from the NTPC tariff for the power consumed by the Petitioner,
iii)
To restrain the MSEB from giving effect to
their decision till the decision is decided by the Commission,
iv)
To direct the MSEB to release wheeling of
additional allocated 0.95 MW NTPC power to the Petitioner.
Thus, it will be
evident that, had the MoP communication been available at the time of original
proceedings, these prayers would, in effect, have become irrelevant from
1.4.2003 in view of the discontinuation of the scheme by MoP themselves rather
than unilaterally by MSEB. In these
circumstances, the Review Petition clearly does not meet the test of Regulation
87, and the dispensation sought has no
nexus with the Order sought to be reviewed.
It may be mentioned that, as far as the prayer for a special tariff is
concerned, as it happens a separate proceeding for determination of MSEB's
Tariff for the year 2003-04 has been separately initiated in which BESL would
have an opportunity to be heard with regard to its claims.
15. In these circumstances, the Commission
rejects admission of the Review Petition.
| Sd/- | Sd/- | Sd/- | |
| (Jayant Deo) | (Dr Pramod Deo) | (P. Subrahmanyam) |
|
| Member | Member | Chairman, MERC |
|
Sd/- |
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| (A.M. Khan) | |||
| Secretary, MERC | |||
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