OERC to invoke section-17, 19 of Electricity Act to shield its order

The Odisha Electricity Regulatory Commission (OERC) will defend its decision to revoke the power distribution licence of three Reliance Infrastructure Ltd (RIL) owned firms before the Appellate Tribunal for Electricity (ATE) citing violation of the provisions of section 17 and 19 of the Electricity Act, 2003 by these distribution companies (discoms).

RIL had gone to ATE against the OERC order. While admitting the case for hearing, ATE had refused to give any interim relief to the company and scheduled the hearing of the case on March 24.

On March 4, OERC, after a suo motto proceeding, had revoked the licenses of the three discoms - North Eastern Electricity Supply Company of Odisha Ltd (Nesco), Western Electricity Supply Company of Odisha Ltd (Wesco) and Southern Electricity Supply Company of Odisha Ltd (Southco). Sources said, OERC had built up its case against the RIL firms basing on violations of provisions under section 17 (licensee not to do certain things) and section 19 (revocation of licence) of the Electricity Act. It will also defend its decision before the ATE on the same premises.

Section 17 said, no licensee shall, without prior approval of the appropriate commission, undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any other licensee or merge his utility with the utility of any other licensee, with other sub sections. Sources said, the RIL firms are liable to attract action under this section 17 as no permission of the commission was taken when 51 per cent share in each of the discoms was first transferred to Bombay Suburban Electric Supply (BSES) in 1999 and then to RIL when it took over BSES in 2002. Similarly, section 19 also empowers the OERC to revoke the licenses. Under the section, the licensees have failed in controlling the aggregate technical and commercial (AT&C) loss and defaulted in payment of Bulk Supply Price persistently, among others.

"Licences can be revoked if one of the conditions prescribed in Section 19 of the Act is satisfied. But in the present case which is one of the rarest of rare case all the conditions described in Section 19 of the Act are satisfied", read the OERC order.

"OERC order clearly states 'non-performance' of the discoms are the reasons for the revocation of the licenses. The arguments will be made on the merits", said Suresh Mohapatra, state energy secretary.

In 2005 too, the license of the discoms were revoked, but they had managed to get a counter order from the Supreme Court. However, when situations did not improve, OERC had sou moto initiated a case in 2013 to revoke the license of the discoms.