2.

In view of the proceedings pending in the Hon’ble High Court of Orissa and keeping in view the orders passed by the Hon’ble High Court, the above two orders passed by the Commission were not pronounced and were filed in a sealed cover in the Hon’ble High Court on 30.06.2003 in Misc. case No 414 of 2003 & 580 of 2003.

3.

Subsequently, by order dated 02.09.2001 passed in Misc. Case No.1380 & 1805 of 2003, the Hon’ble High Court had directed the Commission as under:

7. “The correctives suggested by the Sovan Kanungo report as accepted by the State Government cannot be implemented over-night and will have to be implemented over a period of time. We, therefore, do not intend to dispose of the writ petition, but keep the same pending for the purpose of monitoring from time to time and ensure that the correctives suggested by the Sovan Kanungo report as accepted by the State Government are implemented by the concerned authorities with all sincerity. But so far as the corrective regarding adoption of Pre 1992 norms for depreciation on the basis of valuation of assets prior to their upvaluation is concerned, we find from the final order dated 23.6.2003 of the Commission that after adopting the said corrective and undertaking the exercise as far as practicable, the Commission has found a downward change in the revenue requirement for the year 2002-03, but has decided to pass on the benefit of such downward change in the revenue requirement to GRIDCO and the four distributing companies. We are not quite sure as to whether this decision of the Commission to pass on the benefit of the downward change in the revenue requirement for the year 2002-03 entirely to GRIDCO and the four distributing companies is consistent with the provisions of section 26 of the Orissa Electricity Reform Act, 1995. It will appear from a plain reading of section 26(ii) of the said Act that the Commission shall be bound by not only the parameters relating to financial principles laid down in sections 57 and 57-A of the Electricity (Supply) Act, 1948 and in the 6th Schedule thereto, but also the factors which would encourage efficiency and economic use of the resources, good performance, optimum investments, performance of licence conditions and other matters which the Commission considers appropriate for the purposes of this Act as well as the interest of the consumers. Hence, the Commission will have to consider if the benefit of the downward change in the revenue requirement for the year 2002-03 due to change in depreciation policy and deviation of the Government Notification from the correctives suggested by the Commission should be passed on to the consumers instead of GRIDCO and the four distributing companies”.

8. “Obviously before a final decision is taken in this regard by the Commission, the consumers and the GRIDCO and the four distributing companies will have to be heard by the Commission and for this purpose we direct the Commission to give an opportunity of hearing to the consumers and the GRIDCO and the four distributing companies in the manner provided in its Regulations and thereafter, finally fix tariff for the year 2002-03. It is also open for the petitioners and the intervenor to participate in the said hearing. The orders so finally passed by the Commission may be challenged by any party by way of appeal as provided in the Orissa electricity Reform Act, 1995raising all grounds as are available to him under law in such an appeal”.

9. “Regarding tariff for the year 2003-04, counsel for the parties have submitted before the Court that the determination of the same will depend upon the finalisation of the tariff for the year 2002-03. The Commission will thus finalise the tariff for the year 2003-04 after finalisation of the tariff for the year 2002-03 after giving a hearing in accordance with the Regulations to the consumers and other parties likely to be affected. Tariffs for the year 2003-04 so finalised by the Commission may also be challenged by way of an appeal by any party taking all such grounds as are available under law”.

   • “The orders passed by this Court on 3.2.2003 and 14.3.2003 accordingly stand modified”.

   • “The Misc. Cases are disposed of”.

   • “Urgent certified copy of this order be granted as per the rules”.

4.

In pursuance of the above directions the Commission issued public notice and also individual notices to the persons who were parties in the proceedings before the Hon’ble High Court and heard the matters on 10.10.2003.

5.

By order dated 10.11.2003, the Commission has decided the issue regarding the benefit of the downward changes in the revenue requirement for the year 2002-03 due to change in depreciation policy and deviation of the Govt. Notification from the correctives suggested by the Commission and the adjustments of such benefits for the regulatory assets created in the past years. The Commission has given detailed reasoning as to why the adjustments have been made for the regulatory assets and as to why the benefits mentioned above was not taken towards reduction of the consumer’s tariffs in the year 2002-03. Consequently there has been no change in the tariffs determined by the Commission for the year 2002-03 and as a result of the above there will be no change in the decision of the Commission as to the tariffs for the subsequent year 2003-04. Accordingly there is no impact on the order passed by the Commission dealing with Long Term Tariff Principles

6.

In the circumstances mentioned above, the Commission is proceeding to pronounce the order passed by the Commission dealing with Long Term Tariff Principles and filed with the Hon’ble Court in a sealed cover on 30.06.2003 In the above order the Commission had provided for certain aspects to be complied by the Licensees within a specified period. Some of these period has already expired. As the Order on the Long Term Tariff Principles is being pronounced now the Licensees are given the liberty to apply to the Commission within 15 days from the date of this Order for extension of time to comply with the specific directions and the Commission will pass appropriate orders on such application. In all other respects the Order passed by the Commission and filed with the Hon’ble High Court on 30.06.2003 shall be effective.