Brief note – Status on
the regulatory environment as regards ‘changeover’ / ‘switchover’ of
distribution licensee by a consumer
1. State Commission in case No.151 of 2011 vide order dated 22.8.2012 while granted relief to RInfra had imposed following restrictions on Tata Power:
(i) From the date of the
order changeover will be allowed from RInfra to Tata Power only for the
residential consumers having an average consumption less than 300 units per
month for next 12 months and after that the Commission will review
the position and decide for future.
2. Aggrieved by the order dated 22.8.2012, both Tata Power and RInfra had filed Appeal No. 246 of 2012 and 229 of 2012 respectively. Appellate Tribunal passed the order dated 28 November 2014.
3. Para 73 and 79 deals with the matter of Mumbai International Airport (MIAL) and the Tribunal has observed as follows:
“Para 73 – “In fact, such a
restriction has denied other consumers from exercising their choice of supplier
guaranteed by the Act. One of such consumer viz., Mumbai International Airport
Limited (MIAL) has filed I.A. No. 395 and 396 of 2014 seeking impleadment and
directions in the present Appeal and has submitted that the directions given by
the State Commission takes away the choice given to MIAL as a consumer
under Section 43 of the Electricity Act to take supply from either of the
licensees.”
Para 79 – “As regards IA
395 and 396 of 2014 filed by Mumbai International Airport, we do not want to
give any specific finding and we direct Mumbai International Airport to file a petition
before the State Commission and the State Commission will decide
the Appeal No. 246 of 2012 & IA Nos. 401 & 402 of 2012 and 71,
245, 439 & 442 of 2013 & IA No. 139 of 2014 AND Appeal no. 229 of 2012
& IA No. 368 of 2012 issue as per law, keeping in view the findings given
in this order.”
Present note is based on order passed in Appeal No. 246 of 2012
and 229 of 2012 on 28 November 2014.
1907 Tata Power allowed
supply to Other licensees and bulk consumers of Factories and Railways whose
annual consumption was not less than 500,000 units (which were generally HT
consumers), and also supply to such consumers for lighting provided the
lighting consumption did not exceed 20% of the total annual consumption only by
agreement with existing licensees.
1930 BSES was given
distribution license for suburban areas. The company was subsequently acquired
by Reliance Energy Limited and is now known as Reliance Infrastructure Limited
(RIL).
1934 Licenses were amended
to incorporate further restriction that Tata's cannot supply energy to any
consumer other than the licensees within their respective areas except with the
written consent of Government which is to be given after consulting the
existing licensees.
1964 Restrictions imposed
on Tata Power were removed and were allowed to supply power to high end
consumers only (more than 1000 kva in Mumbai suburban area) and to other
licensees in bulk and the other distribution licensees were obliged to supply
in retail.
2002 RIL filed petition (No.14
of 2002) before the State Commission under Section 22 of the Electricity
Regulatory Commission's Act 1998 for restraining Tata Power from supplying
electricity to the consumers having contracted demand less than 1000 kVA in the
area of supply of RIL.
2003 State Commission
passed Order dt 03.07.2003 and observed that Tata Power is entitled to
supply energy "for all purposes including supply to other licensees for
their own purposes and in bulk". However, in its order the State
Commission restrained Tata Power from offering new connection to any consumers
with energy requirement below 1000 kVA.
2005 Both parties filed
separate Appeals before Appellate Tribunal (RIL - No.31 of 2005 and Tata Power -
No.43 of 2005).
2006 The Tribunal by the
judgment dated 22.5.2006 disposed of both Appeals by setting aside the order of
the State Commission dated 3.7.2003 holding that the Tata Power under its
license was entitled to supply energy only in bulk to other licensees and it
was not entitled to supply in retail to the consumers irrespective of their
demand.
Against this judgment of the Tribunal, the Appeals were filed by
Tata Power and others before the Hon'ble Supreme Court.
2008 Hon'ble Supreme Court
held that there is nothing in the erstwhile TPC licenses which restricts the
supply of electricity to consumers whose maximum demand is less than 1000 KVA and Tata Power is entitled to
supply electricity directly to consumers whose maximum demand is less than 1000
KVA apart from its entitlement of supplying electricity to other licensees for
their own purpose and in bulk.
Subsequently, as per the Hon'ble Supreme Court's judgment as well
as the Capital Investment approval guidelines, 2005 laid down by the
Maharashtra Commission, Tata Power submitted a Network Rollout Plan of Rs. 1,062
Crores to the State Commission, in which it proposed a network roll out for the
period FY 2009-10 to FY 2011-12 based on the load growth in the ward, land
availability, spare capacity and outlet availability from corresponding 220 kV Receiving Sub Stations
2009 The State Commission
in its Order dated 15.06.2009 in Case No. 113 of 2008 rejected Tata Power’s
proposal of network rollout investment plan and directed "exploring"
the use of the wires of other distribution licensees.
In pursuance of this order, Tata Power made a request to RIL seeking
permission for use of its network to supply power to consumers who sought power
from Tata Power.
RIL through its letter dated 30.7.2009 offered no objection to the
Tata Power for use of its distribution system to supply electricity to the
consumers in the common license area.
Tata Power further filed a Petition (no. 50 of 2009) before the
State Commission requesting it to lay down the operating procedure for the
consumers who wanted to receive supply from the Tata Power while being
connected to the distribution network of the RIL.
By an interim order dated 15.10.2009, State Commission held that
the changeover consumers shall be consumers of the Tata Power and would be
liable to pay wheeling charges for RIL network as determined by the Commission.
2011 RIL filed petition
before State Commission (No.151 of 2011). State Commission by its order dated
22.8.2012 imposed following restrictions on Tata Power:
i.
From the date of the order,
changeover will be allowed from RIL to Tata Power only for the residential
consumers having an average consumption less than 300 units per month for next
12 months and after that the
Commission will review the position and decide for future.
ii.
Tata
Power can switchover existing changeover consumers and only residential
consumers having an average consumption less than 300 months, in the
identified 11 clusters.
2012 Both, Tata Power and
RIL have filed Appeal (No. 246 of 2012 and 229 of 2012 respectively) against
the State Commission order dated 22.8.2012.
Tata Power and RIL appeal filed with the Appelate Tribunal (No. 246 of 2012 and 229 of 2012 respectively)
Appellate Tribunal passed the order dated 28
November 2014 allowing Appeal No. 246 of 2012 with certain directions and
disposing of Appeal No. 229 of 2012 with certain directions to the State
Commission for formation of procedure for changeover of consumers. The finding
of the Appellate tribunal is as follows:
“80.
Summary of our findings
i.
It is not established
conclusively that Tata Power was intentionally trying to create a road block to
avert changeover of certain categories of consumers and indulging in cherry
picking of changeover consumers. If the State Commission had received
complaints about refusal of Tata Power to changeover from low end consumers, it
should have conducted an investigation under Section 128 of the Act and
upon receipt of the investigation report, it could have taken corrective action
or action against Tata Power after following the procedure laid down
under Section 128. Tata Power has since revised its application form for changeover/new connection. Tata Power is directed
to keep record of the category wise applications received for changeover (0-300
Units residential may be a separate category) applications rejected with reason
for rejection (category-wise), category wise changeover allowed and post the
same on its website quarterly. Tata Power is also directed to give a public
notice regarding documents required for changeover application clearly
indicating that PAN is not mandatory
ii.
It is correct that the
Tata Power has not laid down LT network to switch over the residential
consumers who were availing supply from Tata Power on the network of RIL and
who were in the vicinity of the network laid down by Tata Power. This in our
opinion cannot be cherry picking as it has been done in the interest of the
consumers and is also in line with the decision of the State Commission in its
order dated 15.6.2009 in case No. 113 of 2008. Therefore, it is in the interest
of consumers of Tata Power and RIL that the changeover consumers of Tata Power
continue to get supply from Tata Power on the RIL, even if a 33/22 kV
sub-station of Tata Power is available in the vicinity. It will also be
convenient and economical for the consumer to changeover back to RIL in case RIL's
tariff becomes more attractive in future.
iii.
In view of the practical
difficulties in laying down parallel network in Mumbai as pointed out by Tata
Power we have given some directions under paragraphs 58 to 61 regarding
restricting the Roll out Plan of the Tata Power only to the areas where laying
down of parallel network will improve the reliability of supply and benefit the
consumers and directions for continuation of changeover arrangement
irrespective of category or consumption of consumers, commissioning of network
where a substantial expenditure has been incurred by Tata Power in laying down
new network on the directions of the State Commission, consumers who had
already switched over to Tata Power, laying down network for providing new
connection, changeover and switch over protocol, change in license conditions of
the licensees, etc. However,
there shall be no restriction on any licensee to lay network for supply to new
connections. The State Commission
is also directed to decide the detailed protocol for switchover and
changeover after hearing all concerned.
iv.
The State Commission has
powers to give directions if it comes to its notice that a licensee is laying
down network selectively to connect the high end consumers ignoring the low end
consumers and violating the terms and conditions of the license. However, such
directions have to be given after following the procedures as per law.
v.
Directions given to Tata
Power by the State Commission in the impugned order are set aside.
vi.
It is perfectly legal
for the consumers to changeover from one licensee to another using the network
of one of the licensees and, therefore, there is no illegality in
continuation of the directions of the State Commission in the order dated
15.9.2009 regarding changeover to Tata Power using RIL's network. However, RIL
is entitled to charge from changeover consumers wheeling charges and other
compensatory charges including the cross subsidy charges as decided by the
State Commission from time to time as per law. The State Commission is also
directed to lay down a detailed changeover protocol after hearing the concerned
parties.
vii.
We have given the above
findings in view of the circumstances of the case where difficulties are being
experienced in laying distribution network by the parallel licensee namely,
Tata Power to provide connectivity to all consumers in the licensed area
common to RIL and in the ultimate interest of the consumers.
viii.
Para 73 and 79 deals
with the matter of Mumbai International Airport (MIAL) and the Tribunal has
observed as follows:
Para
73 - In fact, such a restriction has denied other consumers from exercising
their choice of supplier guaranteed by the Act. One of such consumer viz.,
Mumbai International Airport Limited (MIAL) has filed I.A. No. 395 and 396 of
2014 seeking impleadment and directions in the present Appeal and has submitted
that the directions given by the State Commission takes away the choice given
to MIAL as a consumer under Section 43 of the Electricity Act to take
supply from either of the licensees.
Para 79 - As regards IA 395 and 396 of 2014 filed by Mumbai
International Airport, we do not want to give any specific finding and we
direct Mumbai International Airport to file a petition before the State Commission and the State Commission will decide
the Appeal No. 246 of 2012 & IA Nos. 401 & 402 of 2012 and 71,
245, 439 & 442 of 2013 & IA No. 139 of 2014 AND Appeal no. 229 of 2012
& IA No. 368 of 2012 issue as per law, keeping in view the findings given
in this order.”
Link of the full order passed by Appellate Tribunal is as
follows: