M J Antony: Triple shield for power consumers

OUT OF COURT

Complaints should normally be filed before redressal forums and the Ombudsman, not the commission straightaway.

The past decade has seen the establishment of several regulatory authorities. Among them, the telecom and electricity regulators appear to have created the maximum litigation. Several legal questions involving their power and jurisdiction are pending before the Supreme Court. In recent weeks, the apex court delivered three judgements which dealt with the powers of the electricity regulatory commissions.

Among them, the judgement in Maharashtra Electricity Regulatory Commission vs Reliance Energy Ltd was the most significant as it discussed the way consumer grievances have to be redressed. The rights of the consumers of electricity became an issue in this case as the regulatory body and the distribution companies disputed over the power of the commission.

It all started when the state commission noticed several disparities in the bills sent to the consumers by the distribution companies. The bills were not always based on the actual reading of the meter. The consumers received 'amended' bills, 'supplementary' bills and other such demands. Some bills were raised several years later. The companies put in place computerised systems which generated such bills automatically. The demands were based on factors other than meter reading. Therefore, the commission asked the companies to take corrective steps like withdrawal of the amended bills. No billing using past consumption or some related 'average' basis should be resorted to for more than three months. It also directed them to refund the excess amounts to the consumers.

Stung by the orders, the distribution companies tried to justify the issuance of such bills stating, among other things, that the meters in question were not recording proper consumption. They challenged the power of the commission to take up cudgels on behalf of the consumers in a wholesale manner. The commission rejected these arguments. So, the companies moved the appellate tribunal. It held that the commission had no such power and the aggrieved consumers should approach the machinery set up under the Electricity Act 2003. Therefore, the commission appealed to the Supreme Court. Thus the question before the court was the extent of the commission's power under the Act.

The Supreme Court clarified that the main role of the commission is to determine tariff for generation, supply and transmission of energy. But the responsibility of the commission does not stop there, according to the apex court. In this case, there was a spate of complaints from the consumers about the arbitrary manner in which bills were being sent. Noting this, the court stated: "There can be no manner of doubt that the commission has full power to pull up any of its licensee or distribution company to see that the rules and regulations laid down by the commission are properly complied with. After all, it is the duty of the commission under several provisions to ensure that the public is not harassed."

However, the commission should conduct its own investigation before issuing notices. In this case, it should have called for a report under Section 128 on the mass scale issuance of amended and supplementary bills. Here, the commission went wrong, according to the judgement. The blanket direction to refund the amounts, without a proper investigation, was also found to be unwarranted. After all, theft of electricity is very common. The court asked the companies to advertise in the newspapers inviting aggrieved consumers to bring forth their complaints. If they were not satisfied with the steps taken by the companies, they could individually move the redressal forum set under Section 42 of the Electricity Act. The law also establishes an Ombudsman to settle disputes.

In the second case, Maharashtra State Electricity Distribution Co vs Lloyds Steel Industries, the court substantially reiterated the view expressed in the above judgement. In this case, the company was a bulk consumer and it had a dispute with the licensee. Instead of moving the redressal forum, it approached the commission, which ordered refund. In the appeal, the Supreme Court stated that the consumer company could not approach the commission for relief, but make use of the machinery set up by the law.

The third case was Central Power Distribution Co vs Central Electricity Regulatory Commission. The apex court dismissed the appeal of the company which had challenged the order of the central commission whereby the commission ordered the application of 'Availability Based Tariff' to Simhadri SPTS thermal station of the NTPC. The court stated that the central commission has the power and function to evolve a commercial mechanism, impose charges and enforce discipline. These judgements can serve as precedents in settling disputes over the power and functions of other regulatory bodies also.