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Home News Power Sector News Appellate Tribunal for Electricity upholds cancellation of licences of 3 Odisha discoms

Appellate Tribunal for Electricity upholds cancellation of licences of 3 Odisha discoms

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OdishaThe Appellate Tribunal for Electricity (Aptel) has upheld cancellation of distribution licenses in Odisha for three companies for poor performance and financial trouble that hindered their operations.

Distribution firms Western Electricity Supply Company of Odisha Limited (Wesco), North-eastern Electricity Supply Company of Odisha Ltd (Nesco) and Southern Electricity Supply Company of Odisha Ltd (Southco) had challenged the state regulator’s order of March 2015 that terminated their licenses and appointed an administrator.



The distribution companies were earlier controlled by Reliance Infrastructure which subsequently diluted the stake in favour of other group companies. Reliance Infrastructure said the order had not impact on the company.

“The Odisha discoms have been under administrator rule appointed by the Odisha regulator for the last two and a half years and there is no impact whatsoever on Reliance Infrastructure. We are studying the judgement and will decide on our next course of action,” it said in an emailed response to ET’s query. The Odisha Electricity Regulatory Commission (OERC), represented by Senior Advocate of the Delhi High Court Prashanto Chandra Sen, had strongly defended its order to cancel the licenses.

The state regulator revoked the distribution licenses on the grounds of high distribution losses, massive erosion of net worth, heavy default in payment of power supplier GRIDCO, inefficient billing, and not adhering to directions for energy audits. Aptel Chairperson Ranjana P Desai and Technical Member NJ Kapoor rejected the argument of the distribution companies that principles of natural justice had been violated and that they were not given proper opportunity for hearing.


Private firms involved in electricity distribution have faced many difficulties including resistance from state governments in matters of raising tariffs. Industry sources say that there are more than Rs 5,000 crore of Aptel rulings in favour of Odisha discoms which the regulator has not given any effect to, leading to the poor health of these discoms.

 

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