Procedural History

On examination of both the applications of CESCO, it was noticed that information and analysis with regard to a number of items which are extremely relevant for the determination of Tariff & Revenue Requirement had not been furnished. The Commission forwarded its comments/queries to CESCO calling for clarifications as well as additional informations.


Subsequently, the licensee furnished the same and thereafter the filing of both the applications was treated as complete and both the applications were admitted for hearing. Ever since its inception, Commission has essayed to render transparent, participatory and consultative approach to the entire process of Utility’s Revenue Requirement and Tariff setting. In order to invite objections from the public, the licensee was directed to publish public notices on the proposed Retail Supply Tariff as well as on the proposed Revenue Requirement in the format approved by the Commission.


Notices were published in different leading English and Oriya daily newspapers having wide circulation in the licensee’s area of supply on two consecutive days and also in the Commissions’ website : www.orierc.org indicating the broad features of licensee’s proposed Tariff & Revenue Requirement and also the procedure for filing of objections.


The intending objectors had right to inspect/peruse licensee’s applications and to obtain the salient features of the applications/full set of applications on payment of prescribed fees from the specified offices of the licensee.


In response to the above notices, objections were received from different quarters. In respect of the Tariff Application for 2001-2002, the Commission received as many as 25 objections from the following objectors :-

(1) National Aluminium Company Ltd., Bhubaneswar, (2) Orissa Consumers’ Association, Cuttack, (3) Mahanadi Coal fields, Burla, Sambalpur, (4) Jagdish Mines & Metals (P) Ltd., Jharpada, Bhubaneswar, (5) Cuttack Municipal Corporation, Cuttack, (6) Orissa Grahak Mahasangha, Bhubaneswar, (7) R.C. Padhi, Nayapalli, Bhubaneswar, (8) Federation of Consumer Organisation, Bhubaneswar, (9) Electrical Contractors Association, Cuttack, (10) Aditya Aluminium (HINDALCO), Bhubaneswar, (11) Confederation of Indian Industries, Bhubaneswar, (12) Akhil Bharatiya Grahak Panchayat, Bhubaneswar, (13) Tata Iron & Steel Company Ltd., Bhubaneswar, (14) Orissa Young Enterpreneurs Association, Cuttack, (15) Sarat Chandra Mahapatra, Janpath, Bhubaneswar, (16) Coastal Orissa Steel Manufacturers Association, Cuttack, (17) J.P. Das & Associates, Cuttack, (18) Orissa Small Scale Industries Association, Cuttack, (19) Cuttack District Small Scale Industries Asssociation, Cuttack, (20) Utkal Chamber of Commerce & Industry, Cuttack, (21) Executive Engineer, Public Health Division, Bhubaneswar, (22) Association of Industrial Entreprenuers’ of Bhubaneswara, Bhubaneswar, (23) Orissa Assembly of Small & Medium Enterprises, Cuttack, (24) Orissa Industries Federation, Jagatpur, Cuttack, (25) R.P. Mahapatra, Jaydev Bihar, Bhubaneswar.


All the above objections were scrutinised. Twenty four objections were admitted for hearing whereas objections at Sl. No.4 of Jagdish Mines & Metals (P) Ltd., Bhubaneswar was not admitted for hearing due to its non-compliance with the terms and conditions as laid down in the aforesaid public notice. However, the relevant issues raised by him in his objection has been taken into consideration.


In respect of licensee’s application for Revenue Requirement for 2002-2003, the Commission received seven objections from the following objectors :-

M/s Utkal Chamber of Commerce & Industry, Cuttack, (2) M/s Tata Iron and Steel Company Ltd., Bhubaneswar, (3) Shri R.P. Mohapatra, Jayadev Vihar, Bhubaneswar, (4) Confederation of Indian Industries, Bhubaneswar, (5) Shri R.C. Padhi, Nayapalli, Bhubaneswar, (6) Orissa Grahak Mahasangha, Bhubaneswar, (7) Orissa Consumers Association, Cuttack. All the seven objections were scrutinised and admitted for hearing.


The licensee was given chance to file rejoinder, if any, to the objections filed by the objectors and accordingly, the licensee filed its rejoinder serving copy to the objectors in both the cases.


The date of hearing in both the cases was fixed on 23.3.2002. Notices were published in leading English and Oriya daily newspapers requiring the licensee and the objectors to appear personally or through their authorised representatives or duly constituted attorney to take part in the hearing. The Commission also issued notice to the State Government to appear as an interested party. The Commission has received no response from the Government nor any representative on behalf of the State Government was present during the hearing.


Both the cases were heard analogously on 23.3.2002. The Chief Executive Officer, CESCO supported both the applications and prayed for approval of the Tariff proposal as well as Revenue Requirement. Objectors present were heard in person or through their authorised representatives or duly constituted attorneys. The Director (Tariff) of the Commission raised certain queries to the licensee by way of clarification. Subsequently, the licensee submitted required clarifications to the queries of the Director (Tariff).


In its consultative process, Commission convened Commission Advisory Committee (CAC) meeting on 30.3.2002 and consulted with its constituent members about the proposed tariff and revenue requirement of the licensee.


Legal Objections as to the maintainability of the Cases

During hearing, the following objections were raised regarding the maintainability of the cases by some objectors.


The Commission has not prescribed any methodology and procedure for calculating the expected revenue from charges which the licensee may be permitted to recover pursuant to the terms of its licence and for determination of tariff to collect those revenues.


As per the provisions of Sec.57 and 57 A read with sixth Schedule of Electricity (Supply) Act, 1948, no application of revision of tariff can be made within three years.


As the Commission is going to pass final orders in both the cases without following the procedures laid down in Sec.29 of the Reform Act, 1995, the proceedings are vitiated.


The licensee has filed its tariff application for the financial year 2001-2002. Since the said financial year is going to expire after a few days and before passing of the tariff order, the application has become infructuous.


Issues at paras 2.2.1 and 2.2.2 were raised during the tariff proceedings in Case No.23/ 1999 and had been dealt with by the Commission giving clear findings that such objections were not at all valid. The Hon’ble High Court of Orissa were pleased to deal with these objections and did not find validity in any of them in their order dtd. 22.12.2000 passed in M.A. No.51/2000. The Commission finds no reason to depart from its earlier findings and hence, such objections are to be over-ruled.


Now, we propose to deal with the objection raised in para 2.2.3 above. Sub-Section (1) of Section 28 of Reform Act, 1995 contemplates that where the Commission is satisfied that a licensee is contravening, or is likely to contravene any relevant conditions or requirement of its licence, it shall by final order under Section 29 and, if it thinks it appropriate in accordance with Sub-Section (2) by interim order under this Section, issue such directions as it deems proper for securing compliance. Final order as envisaged u/s 29 of Reform Act, 1995 must relate to the contravention of a condition of licence by the licensee. But the present proceedings relate to the determination of tariff and revenue requirement and not to the contravention of any condition of licence by the licensee. Therefore, we are of the considered opinion that Section 29 of Reform Act, 1995 has no relevance to the present proceedings and the contention raised on this score is not tenable in the eye of law.


As regards the objection raised in para 2.2.4 above, it has to be stated that the licensee has submitted at the time of hearing that tariff may be enhanced from the date of the order or from a future date to be fixed by the Commission in its order and its application should not be rejected merely because the financial year 2001-2002 is going to expire after a few days. It is a well-established convention that a tariff order can be made effective prospectively. As such, the tariff application filed by the licensee can not be said to be infructuous.


We, therefore, note that none of the legal objections raised by various objectors has any force in the eye of law and that we have to proceed according to the procedure and principles established by us in the last four sets of tariff orders namely in March, 1997, November, 1998, December, 1999 and January, 2001.


We now proceed to examine the present tariff filing and give our findings on the same.


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