The Hindu : Andhra Pradesh / Hyderabad News : Supreme Court order favours APTransco

Online edition of India's National Newspaper
Thursday, Jul 27, 2006

Andhra Pradesh

Andhra Pradesh - Hyderabad

Supreme Court order favours APTransco

Special Correspondent

Appellate Tribunal stays NCE units' purchase rates

HYDERABAD: The AP Transco scored a point on Monday when the Supreme Court, through an interim order, stayed the purchase rates specified for units based on non-conventional energy sources by the Appellate Tribunal on electricity matters. The stay, if confirmed in the final order, will eliminate an additional burden of Rs. 270 crores on consumers.

The dispute began in 2001 when the AP Electricity Regulatory Commission (APERC) issued tariff order for that year, specifying the tariffs for NCE units with the provision to increase them by five per cent annually and review after three years.

Three years later, the APERC, however, reduced the rates which by then had reached Rs. 3.48 per unit due to annual revision.

While ordering reduction, it had specified differential rates to NCEs depending on the type of fuel used -- biomass, bagasse, municipal waste, wind, and water (in case of mini-hydels).

The rate paid to AP Genco and NTPC units, in contrast, is hardly Rs. 2 per unit even now.

The developers of the NCEs challenged these rates as low and approached the High Court which directed the utility to pay reduced rates plus 50 per cent of the difference between the old and revised rates.

Case transferred

The case was transferred to the Appellate Tribunal after it was set up under the Electricity Act 2003.

The Tribunal, in its final order, said the APERC had no power to revise the rates and ordered Transco to pay Rs. 3.48 per unit and the "full difference" between the old and new rates from 2004.

As 50 per cent was already paid for two years (2004-05 and 2005-06), the burden for the two years worked out to Rs.170 crores and to Rs. 200 crores for 2006-07.

Staying the Tribunal order, the Supreme Court on Monday said the utility should continue the reduced rate and pay only 50 per cent of the difference between old and revised rates.

This means that the additional burden for 2006-07 gets cut by Rs. 100 crores.

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