HC sets aside APERC order to discoms to collect Rs 2,000cr
TNN | Jul 30, 2011,
HYDERABAD: Coming down heavily on the state-owned power distribution companies (discoms) and the AP Electricity Regulatory Commission (APERC) for being unscientific in their functioning, Justice N V Ramana of the A P High Court on Friday set aside an order of the APERC that allowed the discoms to collect an additional Rs 2,000 crore in the form of fuel surcharge adjustment (FSA) from consumers in the state.

The judge delivered this judgment after hearing at length as many as 1,700 industrial consumers in the state who challenged this surcharge as an additional burden on them. The discoms, which collect the cost of electricity from the consumers, are empowered to collect any additional cost they incur within one month after the quarterly assessment is over.

The discoms stated that they had incurred heavy expenditure as they bought power at higher prices from private players in 2009 and got an approval from the commission to levy this surcharge on consumers to get back their cost. Accordingly, the FSA was adjusted in the power bills and it was paid by most of the consumers. Industrial consumers found it burdensome and challenged the move.

Justice Ramana found fault with the discoms for approaching the regulatory commission with the FSA proposal long after the stipulated three months time was over. The commission did not assign any reasons as to why it allowed the plea of the discoms without questioning them about the nearly one year and ten months delay in making such a demand.

Arguing the case of the industries, counsel K Gopal Chowdary, who obtained most of the FSA related information through the RTI route, told the court that though it was mandatory for the commission to conduct a public hearing before agreeing for any such FSAs, nothing of that sort was conducted.

Justice N V Ramana, while setting aside the order of the commission, said the discoms were now free to make fresh applications. The judge, however, cautioned the state about the ill effects of filling an autonomous commission like the APERC with ineligible members. He also expressed his displeasure over the sad state affairs at the commission which is supposed to be independent and protect the interests of all the stakeholders in the power sector.

If this order of the HC comes into effect, the state will have to reimburse nearly Rs 2,000 crore to the discoms, a power sector expert said.