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Home News Power Sector News APTEL issues notice to SERCs for non-revision of rates

APTEL issues notice to SERCs for non-revision of rates

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APTELThe Appellate Tribunal for Electricity (APTEL) has issued notices to all state electricity regulatory commissions (SERCs) and joint commissions to send the status report on determining an annual revenue requirement and rate for all years since these bodies were constituted. The SERCs have been asked to give necessary particulars and information in the form of a status report before March 7. APTEL has slated the next date of hearing on March 14 to pass further orders.

A recent communication sent by the power ministry requesting APTEL to invoke its authority under section 121 of the Electricity Act, 2003 and to issue suitable directions to all SERCs especially when the rate revisions have not taken place in most of the states prompted the move. Th ministry communique said this was in turn contributing to the poor financial health of state distribution utilities as reported by the Finance Commission.

The 13th Finance Commission estimated that the net losses of state transmission and distribution utilities will rise from Rs 68, 643 crore in 2010-11 to a staggering Rs 1,16,089 crore in 2014-15 if immediate steps are not taken to reform the utilities.

According to the Finance Commission, absence of timely rate increases has increased the gap and has impaired utility operations further. Some states have not raised tariffs for the past eight to nine years in spite of increasing deficits.

APTEL has treated the power ministry letter dated January 21 as a petition and issued notices to SERCs and joint commissions. The power ministry said that one of the reasons for the delay in rate revisions was that the utilities have failed to file annual rate revision petitions in time. As per the Tariff Policy, SERCs can suo-motu take up the revision of tariffs even if the utilities have not filed the revision petitions for the same in time. Power ministry sources confirmed APTEL's directive to all SERCs and joint commissions.

The ministry argued that determination of annual revenue requirement and rate was in the interest of improving the financial health and long-term viability of the electricity sector in general and distribution utilities in particular.

APTEL ruled: "In view of the particulars given in the letter and also request made by the Power Ministry, we deem it appropriate to take up suo-motu action. Accordingly, we entertain this letter as a suo-motu petition. While we issue notices to all state commissions, we think it fit to appoint MG Ramachandran, Amit Kapur, RK Mehta and Buddy A Ranganadhan, the learned counsels as Amicus Curiae to assist this Tribunal for passing appropriate orders in the matter."

The APTEL has also issued notice to the secretary of the Forum of Regulators to assist the Tribunal by collecting all particulars from the SERCs concerned.

Source- Business standard


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