Home ECONOMY OERC ‘ready’ to defend scrapping of licenses of 3 Odisha discoms

OERC ‘ready’ to defend scrapping of licenses of 3 Odisha discoms

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Odisha Sun Times Bureau
Bhubaneswar, Mar 17:

The Odisha Electricity Regulatory Commission (OERC) has claimed it is fully prepared to defend its order revoking distribution licences of three power distribution companies (discoms) at the hearing on the appeal filed by Reliance Infra, the holding company, in the Appellate Tribunal on Electricity (ATE) against its orders on March 24.

power lines

OERC had cancelled the licenses of three discoms – WESCO, NESCO, SOUTHCO – managed by Reliance Infra on March 4.

“OERC has taken all required steps to defend its order. The Commission’s representative or its advocate will present the case on behalf of the Commission before the ATE on March 24,” said G K Dhal, secretary OERC.

“The next hearing on the matter is scheduled for March 24. Most likely, the hearing will be done on merit basis because it’s very clearly written in the OERC order that the revocation has been done for non-performance and it’s supported and based on different extracted data. Our advocates will base their arguments on the merits of the order,” said Suresh Chandra Mohapatra, principal secretary Energy department.

The ATE had earlier rejected the plea of Reliance Infra for a stay on the recent decision of the Odisha Electricity Regulatory Commission (OERC) to cancel the licenses of the three discoms owned by it.

OERC had said the licences had been scrapped for poor energy audit, failure in technical and commercial loss control, billing inefficiency, non-payment of arrears with regard to bulk supply price and disobeying OERC orders.

The OERC order had further said the distribution companies have failed to invest in improving distribution infrastructure. The company was seeking frequent upward revision of tariff without caring for reduction of aggregate technical and commercial (AT&C) losses.

In 2005, the state government had revoked the license of the three discoms. Reliance had then challenged it and moved the Central Electricity Regulatory Commission (CERC) and the Supreme Court.

As performance of the companies never improved, the OERC had lodged a suo motu case against them besides serving a show cause notice on the discoms asking why their licence should not be revoked.

OERC had pointed out in its order that Reliance Infra, which was supposed to hold 51% of its share in the discom,s had transferred almost its entire share to other group companies and failed to abide by the share holder agreement.

“The revocation of licenses of the three privately owned discoms will in no way affect electricity supply in the state. Power supply in the state is normal. GRIDCO CMD, who has been presently made the administrator of these discoms, will conduct a full-fledged audit of these companies to bring about improvement in the administrative and financial status of these companies. During the audit, financial irregularities and efficiency of the employees will be estimated. Efficient officers will be appointed for managing these companies very soon. Emphasis will be laid on performance apart from monthly reviews and efficient engineers will be entrusted with more responsibilities. Strong action will be taken against those indulging in irregularities,” said Mohapatra commenting on the Energy scenario in the state after revocation of licenses of Reliance Infra managed discoms.