The Odisha Electricity Regulatory Commission (OERC) on 04-03-2015 revoked the distribution licences of three power distribution companies (discoms) managed by Reliance Infra.
The licences of Southern Electricity Supply Company of Odisha Limited (Southco), North Eastern Electricity Supply Company of Odisha Limited (Nesco) and Western Electricity Supply Company of Odisha (Wesco) were cancelled because of unsatisfactory performance. Reliance Infrastructure owned the majority 51% share in these firms.
OERC sources said the licences had been scrapped for reasons such as poor energy audit, failure in technical and commercial loss control, billing inefficiency, non-payment of arrears with regard to bulk supply price and disobeying OERC orders.
"Before scrapping the licences, OERC had been continuously monitoring the performances of these discoms. The company has not invested a single rupee to improve transmission infrastructure. It has also failed to reduce the aggregate technical and commercial (ATC) loss," said energy secretary Suresh Mohapatra.
On the basis of its findings, OERC had lodged a suo motu petition against the company in 2013. It had issued show-cause notices asking why the licences should not be revoked.
"We have issued several show-cause notices to the company. They neither responded nor complied with the OERC directions to improve distribution network," said OERC secretary G K Dhall.
"I have not gone through the report since I am outside the state. We will examine it and see what we can do," said A K Bohra, chief executive of Central Service Office, the umbrella arm of the Reliance infra discoms in Odisha.
OERC has temporarily handed over the management of the three discoms to Gridco (formerly Grid Corporation of Odisha), which held 49% stake in the companies.
"To ensure that our decision does not affect the consumers, the chairman-cum-managing director of the Gridco has been appointed as the administrator of the discoms," Mohapatra said.
The services of employees, including the CEO and MD, appointed by Reliance Infrastructure, have been terminated. However, employees belonging to Gridco would not be affected.
On the legal aspect of the decision, Mohapatra said, "Let them move a tribunal or court. We have enough reasons to back our stand."
"We are concerned with the revocation of our licences by OERC. We have always complied with statutory and regulatory requirements. We will approach the hon'ble appellate tribunal for electricity for redressal," a release on behalf of Nesco, Wesco and Southco said.