CASE NO. 21 of 1998

Present:
Shri S. C. Mahalik, Chairman
Shri A. R. Mohanty, Member
Shri D. K. Roy, Member

In the matter of an application u/s 19 of the Orissa Electricity Reform Act, 1995 filed by M/s Grid Corporation of Orissa Ltd. (Gridco), Janpath, Bhubaneswar-751 007 for amendment of Transmission & Bulk Supply Licence, 1997 (No.2/97)

For Petitioner:
Shri B.M.M. Rao, Director (Distribution)
Shri R.C. Mohapatra, Director (Commercial)
Shri U.K. Panda, Company Secretary
Shri B.P. Rekhani, General Manager (RAU)

For Affected Party:
Shri K.N. Jena
Shri K. Acharya

Date of argument: 18.12.98

Date of Order : 31.03.99

M/s Grid Corporation of Orissa Ltd. (Gridco, for short) is the holder of "The Orissa Transmission & Bulk Supply Licence, 1997 (No.2/97)" for carrying out business of Transmission & Bulk Supply of electrical energy in the State of Orissa since 1.4.1997. Gridco also holds another licence namely "The Orissa Distribution & Retail Supply Licence, 1997 (1/97)" from the aforesaid date pursuant to which it carries on business of Distribution & Retail Supply of Electricity to the end users in the State of Orissa. Meanwhile, Gridco has restructured itself by incorporating four wholly owned subsidiary companies to take over the business of Distribution & Retail Supply in the State of Orissa while retaining the Transmission as well as Bulk Supply business in consonance with the objectives of the OER Act, 1995. Gridco, therefore, considered it necessary to seek amendment of the Orissa Transmission & Bulk Supply Licence, 1997 (2/97) and has applied for the amendment in terms of Section 19 of the Act indicating changes proposed to the said licence.

2. Upon receiving the application dt.27.3.98, certain omissions & commissions found therein were pointed out to M/s Gridco in Commission's letter No.OERC-Engg.-24/ 98/640 dt.06.4.98 (55/c) for supplying the same within 3 weeks from the date of receipt of the said letter. Most of the omissions & commissions were removed by M/s Gridco by its letter No.RAU-99 dt.20.5.98 (95/c) and RAU-90 dt.27.6.98 (102/c).

2.1 The Commission thereafter permitted M/s Gridco vide its letter No.Engg-24/98/2016 dt.16.7.98 and No.2034 dt.16.7.98 to proceed with the publication of the notice inviting objections from public in two each English and Oriya daily newspapers. The Commission further directed in its aforesaid notice that any person wishing to purchase copies of the draft licence may also do so from M/s. Gridco by applying to their registered office.

2.2 The notice published in the English and Oriya dailies, interalia, mentioned that the proposed amendment was intended to make it compatible with the structural and legal framework to reflect and highlight the re-organisation of the Gridco by totally divesting Distribution & Retail Supply business in favour of four newly formed subsidiaries and to retain only the business of Transmission & Bulk Supply of electricity.

2.3 It was further notified that every interested person was entitled to inspect the application as well as the draft amendments suggested to the Orissa Transmission & Bulk Supply Licence, 1997 (2/97) at the registered office of Gridco with a right to purchase a copy thereof, either in person or by post, on payment of Rs.50/-. The public notice further stated that any local authority, utility or person having any objection to the proposed amendments of the licence may send his objection in writing to the Commission Secretary within 3 months from the date of publication of the notice indicating name and address of the objector, particular licence/licences to which objection is being made, reasons for objection to the proposed amendment of licence and whether the objector wanted to be heard in person by the Commission.

3. In response to the public notice, only one objection was received from Mr. K.N. Jena, General Secretary, Orissa Consumers' Association, Biswanath Lane, Cuttack on 15th October, 1998.

3.1 There was no specific objection to the proposed amendments of M/s Gridco with respect to Licence No.2/97. In other words, no reason, whatsoever, was assigned as to why the amendments proposed by M/s Gridco to Licence No.2/97 would not be allowed. Incidentally, the objection filed in this case (21/98) noted some peripheral points with regard to Distribution & Retail Supply Licence.

3.2 The above objection filed by Mr. Jena was however admitted as he was the sole objector in this case. A public notice was issued fixing the hearing on 7.12.98.

4. The Commission by order dt.5.12.98 appointed Mr. S.K. Jena, Director (Tariff) & Mr. B.K. Sahu, Director (Engg.) of the Commission to render expert advice and opinion to the Commission in course of hearing of the licence application in terms of Reg. 51 & 129 of the OERC (Conduct of Business) Regulations, 1996.

5. On 7.12.98, at the outset of hearing, Mr. Jena, the General Secretary of Orissa Consumers' Association, Cuttack raised certain preliminary objections and contended that he be furnished certain documents and informations by Gridco in terms of his application dt.2.12.98.

5.1 The preliminary objection was, however, overruled by the Commission vide para 7.1 of the Order dt.18.12.98.

5.2 In view of the preliminary objections raised, the date of hearing was rescheduled to 18.12.98.

6. On 18.12.98 the Commission heard Director (Commercial), Gridco, Mr. K.N. Jena, the sole objector and Mr. K. Acharya, who appeared and represented the sole objector Mr. K.N. Jena.

7. The Director (Tariff) & Director (Engg.) who had been appointed as experts in this case to make a full appraisal of the licence application submitted separate queries, in writing, with regard to proposed amendments to Transmission & Bulk Supply Licence from legal, technical and tariff angle. Copies of queries raised by the two experts were submitted to the Commission, the petitioner as well as objector; and they were taken on record for purpose of consideration.

7.1 Responding to the queries raised by the two experts, Mr. B.P. Rekhani, General Manager (RAU), Gridco submitted that the petitioner be permitted to file necessary corrections/amendments to the proposed draft licence. Pursuant to the aforesaid submission, Gridco filed corrections/amendments (vide Annexure-I) to the Transmission & Bulk Supply Licence on 30.1.99.

8. As has been pointed out earlier (para 3.1.) and also in the written notes of arguments filed by Mr. K. Acharya, there is no specific objection to the proposed amendments to Licence No.2/97. Objections pertain to the Distribution & Retail Supply Licence.

9. Proposals for amendment to the Licence No. 2/97 made by Gridco have been examined carefully by the Commission. Some important amendments proposed are indicated below :-

1. Gridco in their proposals have sought for change in several definitions used in the licence. After careful examination, the definitions have been amended by way of deleting and adding words to the definition wherever required and such revised definitions find place in the approved licence enclosed with this order.

2. One important suggestion made by Gridco is for changing the word "Consumer" to "end user" for the persons taking supply from the Distribution and Retail Supply Licensee. This change has become necessary because EHT consumers will remain consumers of Distribution companies although they will be connected to the Transmission System. This amendment has been accepted in view of restructuring of the Retail Supply Business. Gridco's proposal to amend the definition of "Distribution Code" could not be accepted by the Commission since "Distribution Code" refers to and includes Distribution (Planning and Operation) Code and Orissa Electricity Regulatory Commission Distribution (Condition of Supply) Code, 1998 issued by the Commission.

3. Another important suggestion made by Gridco relates to the definition of "Electricity Operator". The Commission accepts this amendment and confirms that the word "Electricity Operator" shall mean "a licensee including Bulk Supplier; or a person who owns or operates a generating station or Authorised person connected to the Transmission System".

4. Gridco's proposal to remove reference to "Distribution and Retail Supply Business" from the definition of "Separate Business" could not be accepted by the Commission as the possibility of Transmission and Bulk Supply Licensee engaging in the business of Distribution and Retail Supply cannot be entirely ruled out in future.

5. Gridco's proposal to include buildings for accommodating plant, machineries and operating staff in the definition of "Transmission System" is accepted.

6. The Commission suo motu decides that it will be more appropriate to change the title of the General Conditions at para 5 from "Prohibited Activities" to "Restrictions".

7. Gridco has suggested to replace "Total System" with "Transmission System" as Gridco's obligation to notify the major incidents affecting the system is limited to Transmission System only as "Total System" also included "Distribution System". The Commission considered the proposal and decided to replace "Total System" with "Transmission System" for the sake of reporting major incidents.

8. Gridco's suggestion for amendment with reference to "encumbrance" relating to restrictions on activities has been accepted. It is also ordered that "Disposal of Assets" should also include sale of shares and stock. Further, it is ordered that the cost of assets disposed when aggregated with the cost of all other assets (if any) forming part of the same overall transaction equals or exceeds Rs.30.00 lakhs should also require approval of the Commission. The cumulative sale of shares and stock to a single party shall be considered to form part of the same overall transaction.

9. Gridco's proposal suggesting to omit issues arising under Section 33 of the Reform Act in the matter of arbitration was not accepted by the Commission. The Commission ordered reference to Section 37(1) in the matter of arbitration as provided in the Act.

10. Having thus prepared a draft of the amended licence for Transmission & Bulk Supply, the Commission approved the same on 25.2.99 upon consideration of the application dt.27.3.98 and additional filings and averments made from time to time by M/s Gridco., objection filed thereto and submissions made during the course of hearing of this case. A copy of the draft amended licence was forwarded to the Licensee in terms of Regulation 90 & 91 of the Orissa Electricity Regulatory Commission (Conduct of Business) Regulations, 1996 vide Commission's letter No.406 dt.27.2.99 so as to obtain its consent regarding acceptance thereof on or before 7.3.99.

10.1 The Director (Commercial), Gridco in his letter No.Com.VIII-19/98 (Vol.VIII)/ RAU-106 dated 06.03.99 communicated the acceptance to the draft Licence annexed to the Commission's letter referred to in Para-10 above.

11. In the light of the above observation, it is hereby ordered that the amended Transmission and Bulk Supply Licence, 1997 (No.2/97), approved by the Commission and accepted by the licensee be issued which shall come into operation with effect from 01.04.1999. It is further ordered that the licensee shall publish a notice in one English and two Oriya dailies having largest circulation in the State of Orissa and one Oriya daily which has the largest circulation at the headquarter of the four Distribution Zones for two consecutive days, informing the general public that a copy of the amended Transmission & Bulk Supply Licence, 1997 (No.2/97) is available in the headquarter office of the Gridco at Bhubaneswar for free inspection for a period of two weeks.

12. The Licence issued shall form a part of this order.

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