Order passed by Honl. JERC in the matter of Determination of Additional Surcharge for OA Consumers


Order passed by Honl. JERC in the matter of Determination of Additional Surcharge for OA Consumers
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Monday, September 26, 2016
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Dear all,

As you all know, DNHPDCL had filed a petition bearing No. 205/2016 before Hon’ble Joint Electricity Regulatory Commission, for the state of Goa and Union Territories, Gurgaon for Determination of Additional Surcharge for the (Open Access in Transmission and Distribution) Regulations, 2009.

Hon’ble Joint Electricity Regulatory Commission has passed an order on 15/09/2016, the copy of the order is enclosed herewith for your ready reference.

SIMA welcomes the order of Hon’ble Commission. SIMA appreciates the view of Hon’ble Commission as Commission has passed a balanced order and has assured that the other category of non-open access consumers are not burdened and thus interest of other categories of small consumers has been safeguarded.

Hon’ble Commission has relied on the order  passed by Hon’ble Supreme Court on 25th April 2016 in the matter of “Sesa Sterlite Ltd Vs. Orissa Electricity Regulatory Commission and Others” in the Civil Appeal No. 5479 of 2013.  While passing the order Hon’ble Supreme Court  has observed that,

“The issue of Open Access surcharge is very crucial and implementation of the provision of Open Access depends on judicious determination of surcharge by the State Commissions. There are two aspects to the concept of surcharge – one, the cross-subsidy surcharge i.e. the surcharge meant to take care of the requirements of current levels of cross-subsidy, and the other, the additional surcharge to meet the fixed cost of the Distribution Licensee arising out of his obligation to supply. The presumption, normally is that generally the bulk consumers would avail of Open Access, who also pay at relatively higher rates. As such, their exit would necessarily have adverse effect on the finances of the existing licensee, primarily on two counts – one, on its ability to cross-subsidize the vulnerable sections of society and the other, in terms of recovery of the fixed cost such licensee might have incurred as part of his obligation to supply electricity to that consumer on demand (stranded costs). The mechanism of surcharge is meant to compensate the licensee for both these aspects.

Through this provision of Open Access, the law thus balances the right of the consumer to procure power from a source of his choice and the legitimate claims/interests of the existing licensees. Apart from ensuring freedom to the consumers, the provision of Open Access is expected to encourage competition amongst the suppliers.”

In the light of the above observations of the Hon’ble Supreme Court, specific provision in the Electricity Act, 2003 as well as JERC for the State of Goa and Union Territories (Open Access in Transmission and Distribution) Regulations, 2009, the Hon’ble Commission is of the considered view that OA may be permitted on payment of a surcharge to be determined by the State Commission.”

Accordingly the Hon’ble Commission has determined the additional surcharge for Open Access for Fy 2016-17 to be recovered from OA consumers at Rs. 0.47 per kWh. The detailed computation of additional surcharge is provided in Annexure – I of the said order.

For more detail, you are requested to go through the order ofHon’ble Joint Electricity Regulatory Commission, for the state of Goa and Union Territories, Gurgaon which is attached herewith.

Thanking you, 
With regards,

For Silvassa Industries & Manufacturers Association

Narendra Trivedi, 
Secretary

 


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