View - Maharashtra Electricity Regulatory Commission

Before the
MAHARASHTRA ELECTRICITY REGULATORY COMMISSION
World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400005.
Tel. 022 22163964/65/69 Fax 22163976
Email: [email protected]
Website: www.mercindia.org.in / www.merc.gov.in
Case No. 105 of 2014
In the matter of
Petition of Maharashtra Veej Grahak Sanghatana for penal action against MSEDCL
for breach of provisions of law in respect of new electricity connections to Agricultural
consumers, and non-compliance of certain other directions
Coram
Smt. Chandra Iyengar, Chairperson
Shri. Azeez M. Khan, Member
Shri. Deepak Lad, Member
Maharashtra Veej Grahak Sanghatana
:
Maharashtra State Electricity Distribution Co. Ltd.
:
Petitioner
Respondent
Appearance
For Petitioner
:
Shri. Pratap Ganpatrao Hogade
For Respondent
:
Shri. L.M.Borikar
Shri P.R.Bhagwat
For Consumer Representative :
Shri. Ashok Pendse, TBIA
ORDER
Date: 8th December, 2014
1.
The Maharashtra Veej Grahak Sanghatana (MVGS),
through its President Shri
Pratap Ganpatrao Hogade, has filed a Petition under Sections 142 and 146 of the
Electricity Act (EA), 2003 seeking penal action against the Maharashtra State
Electricity Distribution Co. Ltd. (MSEDCL) and its officers responsible for violating
the provisions of the EA, 2003 and Regulations and non-compliance of the
Commission’s Orders while providing new electricity connections to Agricultural
Consumers, and non-compliance of certain other directions.
MERC Order _Case No. 105 of 2014
Page 1 of 11
2.
The prayers of MVGS are as follows:
3.
The Petition states that:
3.1
In its Circular No.3030 dated 29 January, 2014, MSEDCL has stipulated that all
infrastructure works related to Low Tension (LT) Agriculture pump energization will
be carried out only under ongoing schemes, viz. SPA:PE, Infrastructure Plan II,
DPDC, backlog of Agricultural connections and other Government-funded schemes.
MSEDCL’s clarificatory Circular No.4900 dated 12 February, 2014 reiterates that no
Agricultural connection will be released under Non-Dedicated Distribution Facility
(DDF) (Consumer Contribution & Refund, i.e. CC & RF) Scheme. However, any outof-turn connection sought may be approved under the non-Refundable DDF scheme.
3.2
Thus prospective Agricultural consumer will have to wait for 4-5 years for
connections. Further, such consumers may be compelled to incur all the expenditure
involved under the DDF scheme.
3.3
Section 43 of the EA, 2003 provides that the Distribution Licensee shall observe
Universal Service Obligation (USO). New connections have to be given within one
month of application or within such other period as is decided by the Commission.
3.4
The MERC (Electricity Supply Code and other Conditions of Supply) Regulations,
2005 (‘Supply Code’) were notified on 20 January, 2005. In its Order dated 8
MERC Order _Case No. 105 of 2014
Page 2 of 11
September, 2006 in Case No. 70 of 2005 approving the Schedule of Charges, the
Commission rejected MSEDCL’s proposal to recover service line charges from
prospective consumers except in case of those seeking DDF, and directed that the cost
of infrastructure from the delivery point of the transmission system to the distributing
mains should be borne by MSEDCL. The expenditure on the capital investment on
infrastructure would be considered during Aggregate Revenue Requirement (ARR)
determination.
3.5
MSEDCL had issued the Circular No.43 dated 29 September, 2009 regarding the
approved Schedule of Charges. The Commission has approved the revised Schedule
of Charges to be recovered by MSEDCL vide its Order dated 16 August, 2012 in Case
No. 19 of 2012. Under the Schedule, the Distribution Licensee is expected to recover
application processing fees, service connection charges and security deposit while
releasing new connections.
3.6
Inspite of the Commission’s Order in Case No.70 of 2005 dated 8 September, 2006
and Circular No.43 dated 29 September, 2009, MSEDCL field offices continued to
collect meter cost and related infrastructure cost. Hence MVGS filed a Petition in
Case No.82 of 2006. The Commission, vide its Order dated 17 May, 2007, directed
MSEDCL not to collect any charges which are not defined under the Supply Code
and/or the Order of the Commission in Case No.70 of 2005 dated 8 September, 2006.
3.7
Vide Order in Case No.56 of 2007 dated 16 February, 2008, the Commission has
elaborated upon the concept of DDF. It has clarified that consumers should not be
burdened with infrastructure cost which is the responsibility of MSEDCL. These
charges may be recovered by MSEDCL through the ARR. Accordingly, MSEDCL
issued Circular No.22197 (Guidelines for releasing new connections and
augmentation) and Circular No.25680 (Procedure to plan for electrifying areas,
preparation of schemes (DPRs) and releasing new connections). Thereafter, MSEDCL
had withdrawn its Review Petition in Case No.56 of 2007.
3.8
MSEDCL’s Circulars No.22197 and No.25680 were in force till 28 January, 2014.
According to these Circulars, if a consumer or group of consumer wants early
connection and opts to execute the work and bears the cost of infrastructure initially,
that cost will be refunded through adjustments in energy bills. Thus, consumers
MERC Order _Case No. 105 of 2014
Page 3 of 11
benefited by getting connections earlier, with refund of infrastructure cost through bill
adjustments.
3.9
MSEDCL’s Circular No.3030 dated 29 January, 2014 and clarificatory Circular
No.4900 dated 12 February, 2014 discriminate between Agricultural pump
consumers, and the facility of executing the work by bearing the cost of infrastructure
initially and getting refund of the cost has been halted.
3.10
Inspite of the Commission’s directions and approved schedule of charges, additional
charges were collected by MSEDCL while releasing new connections. Vide Order
dated 1 September, 2010 in Case No. 93 of 2008, the Commission had directed
MSEDCL to scrutinize all such cases from 9 September, 2006 to 20 May, 2008 and
seek information through appeals in newspapers or electricity bills, and refund the
charges by way of bill adjustment. However, no action has been taken by MSEDCL.
3.11
Further, vide its Order dated 5 January, 2010 in Case No.148 of 2011, the
Commission had directed MSEDCL to set up a Committee to correct old practices,
inadvertent mistakes that had occurred and confusion with regard to interpretation of
DDF and Service Connection charges, and directed it to review all its circulars, orders
and any other documents relating to the supply of electricity to consumers, and to
ensure that all are consistent with the provisions of the EA, 2003 and Regulations.
However no such Committee has been formed by MSEDCL.
3.12
Vide Circular No.3030 dated 29 January, 2014, MSEDCL has declared that all
infrastructure works related to Low Tension (LT) Agricultural pump energization will
be carried out only under ongoing schemes, viz SPA:PE, Infrastructure Plan II,
DPDC, AG backlog and other Government funded schemes. MSEDCL’s clarificatory
Circular No.4900 dated 12 February, 2014 reiterates that no Agricultural connection
shall be released under Non-DDF (CC & RF) Scheme. Applications for connection
may be approved under the Non Refundable DDF scheme. Thus, Agricultural
consumers will be compelled to carry out all the expenditure themselves as envisaged
under the DDF scheme. While the Non-DDF (CC & RF) Scheme has been
discontinued for AG pump connections, it is still in force for residential, commercial
and industrial consumers. For such non-compliance of the Commission’s directions,
action needs to taken against MSEDCL under Sections 142 and 146 of the EA, 2003.
MERC Order _Case No. 105 of 2014
Page 4 of 11
4
In its Reply dated 5 August, 2014, MSEDCL has submitted as follows: -
4.1.
Data of Agricultural pump energization in the last 5 years is as under: -
4.2.
Sr. No
Financial Year
1
2
3
4
5
2009-10
2010-11
2011-12
2012-13
2013-14
Total No of Ag connections
released
Number of Ag. connections
released
1,54,415
3,21,299
2,52,784
1,58,937
1,24,769
10,12,204
MSEDCL had reviewed the statistics of Agricultural connections and development of
infrastructure under various schemes. In the last 5 years, hardly 3-4% of new
consumers availed of the Non-DDF (CC and RF) facility. Hence, for proper
monitoring and control, it was decided that, instead of allowing consumers to develop
the infrastructure and refund the cost through energy bills, MSEDCL would do so
itself in order to facilitate prospective Agricultural consumers and release new
connections. Subsequently, directives for releasing new Agricultural connections
accordingly were issued vide Circular dated 29 January, 2014.
4.3.
In response to this Circular, representations were received from prospective
Agricultural consumers and public representatives requesting option of DDF. Hence
MSEDCL clarified vide Circular dated 12 February, 2014 that prospective
Agricultural consumers could carry out the work under DDF at their request. In such
case, the expenditure would be incurred by the prospective consumers and would be
non refundable.
4.4.
MSEDCL has prepared Infra Plan-II of Rs. 6,500 crore. for creating power
infrastructure in next three years for releasing new connections, for which the
Commission and financial institutions have accorded approval. It is proposed to
release about 5.40 lakh new Agricultural pump connections.
4.5.
MSEDCL is proactively developing the infrastructure under various schemes to
release the Agriculture connections by maintaining the chronology of paid pending
applications. MSEDCL does not recover any expenditure for energisation of
Agricultural pumps except in case where the consumer or group of consumers opts to
take a connection out of turn and through DDF.
MERC Order _Case No. 105 of 2014
Page 5 of 11
5.
At the hearing on 7 October, 2014, the Petitioner submitted a list of relevant Orders
and Circulars and compilation of documents, including additional information
obtained under the RTI Act regarding the number of pending/ paid but pending
applications and documents relating to compliance of Orders in Case Nos. 56 of 2007,
93 of 2008 and 148 of 2011. Shri Hogade for MVGS emphasised the fact that that the
option of non-DDF was discontinued only for Agricultural consumers and not for any
other category. If the reason is that only 3-4% of the agricultural connection
applicants had sought this facility, why was the same not applied to, say, residential
consumers? 10.12 lakh agricultural connections were released over the last 5 years,
but a backlog of 50,000 connections was added every year and more than 3 lakh were
pending, some from 2010-11. MSEDCL’s claim in its clarificatory Circular that
representations were received from prospective consumers was false, as ascertained
from information obtained under the RTI Act. Moreover, the requirement of DDF
cannot be justified since separate individual transformers are not required. He also
reiterated other contentions in the Petition. MSEDCL stated that it had complied with
the Commission’s Order in Case No. 93 of 2008, and conducted a review of Circulars,
etc. as directed in Case No. 148 of 2011. MSEDCL also stressed that the requirement
of DDF was only for out-of-turn Agricultural connections. The Commission asked
MSEDCL to submit its written response to the points made by Shri Hogade.
6.
6.1.
MSEDCL’s submission dated 20 October, 2014 states as follows: In compliance of Order in Case No.148 of 2011 directing it to review its Circulars,
etc., MSEDCL had prepared a new Load Sanction Form in line with the legal
provisions. Guidelines were issued in the form of guide book laying down the correct
and uniform procedure for releasing service connections. The compliance was noted
by the Commission in its Order dated 23 November, 2012 in Case No. 148 of 2011.
6.2.
As on 30 September, 2014, there were 1,64,405 paid pending applications, and
MSEDCL has released 1, 91,433 connections. Further, MSEDCL has prepared a plan
of Rs 6500 crore for creating new infrastructure in the next three years for providing
5.40 new connections. Provision has been made to release all the pending and
prospective Agricultural connections in the next 3 years.
6.3.
MSEDCL’s review of Agricultural connections and infrastructure development under
various schemes shows that barely 3-4% of the applicants availed of the DDF scheme
in the last 5 years:
MERC Order _Case No. 105 of 2014
Page 6 of 11
FY
No. of Ag. Pump
Connections Released
No. of consumers opting
for Non-DDF (CC&RF)
%
2011-12
252784
10194
4.03
2012-13
158937
6067
3.82
2013-14
124769
4885
3.92
Total
536490
21146
3.94
Hence, and for proper monitoring and control, MSEDCL decided that, instead of
allowing creation of infrastructure by consumers and refund of the cost through
energy bills, MSEDCL would do so itself. The clarificatory Circular has kept option
of DDF open for willing prospective consumers, considering several representations.
Both the impugned Circulars are available on MSEDCL’s web-site. The non-DDF
(CC & RF) scheme was meant only for consumers who wanted connections out of
turn. It was discontinued vide the Circulars dated 29.01.2014 and 12.02.2014.
7.
7.1.
In its Rejoinder dated 22 October, 2014, MVGS has submitted as follows:
MSEDCL’s submission with regard to compliance of directives in Case No.148 of
2011 is misleading. MSEDCL approved the guide book regarding uniform procedure,
etc. in December, 2011, prior to the Commission’s Order dated 5 January, 2011.
While the Commission’s Order referred mainly to DDF, non-DDF, infrastructure cost,
meter cost, etc. no new or additional material is provided in the guide book or the new
Form. Moreover, no action was taken by MSEDCL to review Circulars, procedures,
etc. through a Committee and submit the outcome to the Commission inspite of a
series of Orders culminating in Case No. 148 of 2011. Contrary to MSEDCL’s claim,
a similar direction for review in Case No. 36 of 2012 has also not been complied with.
In fact, in that Order the Commission had taken note of the guidelines in Circular
dated 19 June, 2008, which have been modified by MSEDCL through the impugned
Circulars in 2014.
7.2.
While MSEDCL’s infrastructure plan of Rs.6, 500 Crore is a welcome step, it will be
rolled out over the next 3 years or more. Thus, the Non DDF (CC & RF) scheme
would be denied to prospective Agricultural consumers for a long time. Such denial is
also discriminatory. Moreover, even if only 4% of prospective consumers have opted
for it, their number is significant in absolute terms. Besides, the number of such
consumers is not relevant.
Commission’s Analysis and Ruling
MERC Order _Case No. 105 of 2014
Page 7 of 11
New dispensation for out-of-turn Agricultural connections
8. Inspite of providing, on an average, around 1.80 lakh new LT Agricultural
connections each year in recent years, MSEDCL has a backlog of 1.64 lakh paid but
pending applications. Many have been pending for a long time, and a large number of
new applications continues to be received. For those in the waiting list seeking earlier,
out of turn connections, MSEDCL had provided a window (in Circular dated 19 June,
2008) through the Non DDF (CC & RF) scheme, under which the applicant would
execute the work (under MSEDCL’s supervision) and initially bear the cost. That cost
would be refunded by MSEDCL over a period of time through energy bills. Thus, the
waiting time for such applicants was reduced, while the financial burden on MSEDCL
would be staggered and work done by the prospective consumer. MSEDCL has stated
that only around 4% of the applicants have been opting for out of turn connections
under this scheme.
9. Through the impugned Circulars dated 29 January and 12 February, 2014, MSEDCL
has discontinued the above facility. Instead, connections will be provided out of turn
to those willing to bear the cost, without reimbursement. The works for the purpose
would be in the nature of a dedicated facility, which can be executed by the applicant
(on payment of 1.3% supervision charges to MSEDCL) or by MSEDCL itself. There
would, therefore, be no supervision (in the latter alternative) or financial burden on
MSEDCL. However, the amount charged in respect of those work components which
are covered under the approved Schedule of Charges will have to be in accordance
with that Schedule.
10. The Commission notes that applicants are free and not compelled to seek out of turn
connections and instead await their turn in the waiting list, in which case MSEDCL is
obliged to provide them connections in accordance with the provisions of EA, 2003
and relevant Regulations. Delay in doing so beyond the saving provisions of law
renders MSEDCL liable to certain consequences. The Standards of Performance
Regulations also provide for compensation, and a separate redressal mechanism exists
for such grievances and compensation under the Consumer Grievance Redressal
Forum and Electricity Ombudsman Regulations. The Commission notes MSEDCL’s
intention to resolve the basic issue of long pendency and backlog of agricultural
connections through investment of Rs. 6,500 crore on infrastructure and other works
over the next three years which would enable it to provide 5.40 lakh new agricultural
connections.
11. In the light of the foregoing, the Commission is of the view that the revised
MERC Order _Case No. 105 of 2014
Page 8 of 11
dispensation in the impugned Circulars for out of turn agricultural connections does
not militate against the provisions of the EA, 2003 or the relevant Regulations, and
applicants can choose not to opt for it. Hence, no interference is warranted. However,
while it is MSEDCL’s prerogative to provide such an option, the Commission would
have preferred retention of the earlier alternative provided since 2008. While
staggering the immediate financial burden of MSEDCL, that option was more
beneficial to those requiring out of turn connections. Moreover, it seems that in
practice the DDF dispensation in such cases would require mutual arrangements
between farmers to avoid duplication of transformer and other infrastructure when the
turn of regular waiting list (or other out of turn) applicants in the same vicinity comes.
Even if the proportion of applicants opting for out of turn connections has been small,
MSEDCL may revisit its revised dispensation considering these observations and take
an appropriate decision.
Compliance of Orders regarding fixing of DDF charges, refund of additional charges and
review of Circulars, etc
12. Through its Order dated 1 September, 2010 in Case No.93 of 2008, the Commission
had directed MSEDCL to scrutinize the cases of all connections released from 9
September, 2006 to 20 May, 2008 to ascertain if additional charges beyond the
approved Schedule of Charges were recovered from consumers not already identified
by MSEDCL in sample checks submitted to the Commission, or publicly appeal
through newspapers or electricity bills for information from affected consumers and
refund the charges.
It appears that it has done so. Moreover, any remaining
consumers can do so, and approach the CGRFs if they do not get a response.
However, MSEDCL should submit to the Commission, before the Technical
Validation Session (TVS) in respect of its pending MYT Petition, the present position
of number of consumers identified, and additional charges refunded or pending for
refund.
13. The Commission also notes that, in Case No. 36 of 2012, a Petitioner, Shri Haribhau
Khapre, had alleged non-compliance of the Commission’s Order dated 5 January,
2012 in Case No. 148 of 2011. That Order directed MSEDCL to review Circulars,
practices, etc. (particularly in the context of DDF, service connections and related
matters) to bring them in line with the relevant Regulations and Orders. In its Order
dated 23 November, 2012 on Shri Khapre’s Petition, the Commission noted inter alia
MERC Order _Case No. 105 of 2014
Page 9 of 11
MSEDCL’s submission that guidelines for new connections and a booklet, and a new
Load Sanction Format were circulated to field officials in March, 2012 in compliance
with the Commission’s directions in Case No. 148 of 2011.
14. In its Order dated 16 February, 2008, in Case No. 56 of 2007, the Commission had
directed MSEDCL to submit its Schedule of Charges, proposing rates on a normative
basis, for providing Dedicated Distribution Facilities in accordance with the Supply
Code. MVGS has submitted that MSEDCL has not complied with that direction.
MSEDCL’s Reply is also silent on this point. While recognising that there may be
complexities in such an exercise, the Commission directs that MSEDCL make its
submission to the Commission on this matter before the TVS to be held on its pending
MYT Petition, since the Schedule of Charges would also be addressed in those
proceedings.
Summary of Rulings
15. The revised dispensation in the impugned Circulars for out of turn Agricultural
connections does not militate against the provisions of the EA, 2003 or the
relevant Regulations, and applicants can choose not to opt for it. Hence, no
interference is warranted. However, MSEDCL may revisit this dispensation
considering the Commission’s observations at para. 11 above and take an
appropriate decision.
16. MSEDCL appears to have complied with the direction to ascertain if additional
charges beyond the approved Schedule of Charges were recovered during the
relevant period from consumers, or publicly appeal to affected consumers and
refund the charges. Any remaining consumers can also approach MSEDCL, and
the CGRFs if they do not get a response. However, MSEDCL should submit to
the Commission, before the Technical Validation Session (TVS) in respect of its
pending MYT Petition, the number of consumers identified, and additional
charges refunded or pending for refund so far.
17. The Commission has noted MSEDCL’s submission regarding compliance of
directions to review its Circulars and practices in the context of DDF, service
connections, etc.
MERC Order _Case No. 105 of 2014
Page 10 of 11
18. MSEDCL’s Reply in the present proceedings is silent on submission of a
Schedule of Charges for DDF. While there may be complexities in such an
exercise, the Commission directs MSEDCL to make its submission to the
Commission on this matter before the TVS to be held on its pending MYT
Petition, since the Schedule of Charges would also be addressed in those
proceedings.
19. The Commission is of the view that, while there has been no breach of the
provisions of law or the Commission’s Orders as contended in some matters,
with regard to the remaining no useful purpose would be served by invoking
Sections 142 and 146 of the EA, 2003 in view of the foregoing.
The Petition filed by the Maharashtra Veej Grahak Sanghatana in Case No. 105 of 2014
stands disposed of accordingly.
Sd/(Deepak Lad)
Member
MERC Order _Case No. 105 of 2014
Sd/(Azeez M. Khan)
Member
Sd/(Chandra Iyengar)
Chairperson
Page 11 of 11

Download Report