INDEX [] · Objector Objection Discom Reply 1. This reply is being filed on behalf of RPP Ltd, hereinafter referred to as "Objector". The Objector is a generating company operating

Sl.No.Name of the Objector Page no.

Sri. Y.V.Subba Rao, Managing Director,M/s RPP

Ltd.,Hyderabad.

Sri R.K.Agarwal, Hon. Chairman,M/s Andhra Pradesh

Spinning Mills Association,Secunderabad

Sri.N.Padma Rao, Executive Director,M/s Jyoti Bio-

Energy Ltd.Hyderabad.

2Dr.K.Selvaraju, Secretary General,M/s The Southern

India Mills' Assocication,Coimbatore.4-5

3Sri.Roberto de Barros Bezerra, Industrial Director,M/s

Gerdau Steel India Ltd.Anantapur.5

4Sri.A.Bharat Reddy, Director,M/s Elcon Greengen India

Pvt. Ltd.6

5

Sri.Suresh Kumar Singhal, Chairman,All India

Induction Furnace Association (South Central Region)

Secunderabad. 7-8

6 Smt. P.Vydehi,The Federation of Andhra Pradesh

Chambers of Commerce & Industry,Hyderabad

9-13

7 Sri.Venugopala Rao, Convener,Centre for Power

Studies,Hyderabad13-14

8Sri.R.Kishore, Sr. Engineer,M/s Amara Raja, Batteries

Ltd.Tirupati.14-15

9Sri.Srinivas,M/s Steel Exchange India Ltd.Hyderabad

16-17

M/s Granules India Ltd,Hyderabad

M/s Devashree Ispat (P) Ltd,Hyderabad

T.V.Ravindra Babu, Manager, Program

Management,Dr.Reddy's Laboratories Ltd,Hyderabad

Sri.Pramod Kumar Agarwal, Director,M/s Sitaram

Spinners Pvt. Ltd.,Secunderabad

Sri.Gopal Agarwal, Director,M/s Rama Spinners Pvt.

Ltd.,Secunderabad

Sri.Pramod Kumar Agarwal, Director,M/s MS Agarwal

Foundries Pvt. Ltd.,Secunderabad

Sri.Pramod Kumar Agarwal, Director,M/s Agarwal

Foundries,Secunderabad

Sri.M.Thimma Reddy, Convenor,People's Monitoring

Group on Electricity Regulation

Sri.K.Raghu, Certified Energy Manager and Auditor,

Cordinator,Telangana Electricity Employee's

JAC,Hyderabad

Sri.B.S.S.V.Narayana, Manager (Finance &

Accounts),M/s Synergies Casting Ltd.,Visakhapatnam

Sri. Chiranjib Das, CEO,M/s Scan Energy & Power Ltd.

Sri. Challa Gunaranjan, Counsel,M/s Owens Cornigns

Ltd.

Sri.Challa Gunaranjan, Counsel,M/s India Cements

Ltd.

INDEX

1 1-4

10 17-19

11 19-20

12 20-22

13 22-27

Objector Objection Discom Reply

1. This reply is being filed on behalf of RPP Ltd, hereinafter referred to as "Objector". The Objector is a generating company operating a mini-hydel power plant. The Objector had filed detailed and elaborate objections before the Hon'ble Commission in the original proceedings.

2. The affidavit filed in support of the review petition states that the deponent has been authorized to file the application on behalf of APCPDCL. But the petition is signed by the same person on behalf of all the other distribution-licensees also as petitioners. It is wholly incompetent and there is a material misjoinder of petitioners. The review petition is liable to be rejected in limine for this reason alone.

The remaining Three discoms have authorized the CGM/comml/APCPDCL to file the review petition.

3. The order sought to be reviewed was passed on 13.08:2013. The review petition appears to have been filed on 20.09.2013.. The petitioners are called upon to show how the review petition is within the time of 30 days from the date of the order allowed by the Limitation Act.

1. About the time contemplated for filing review before APERC is concerned, primarily either under the EA-2003 or AP reforms Act, 1998, it is clearly stated that in respect of review petition, the APERC is vested with the powers that are exercised by court under Code of Civil Procedure (CPC).Therefore the said provisions of EA/AP Reforms Act speak about the powers of the review to the APERC, but certainly not about the procedure and limitation aspect. Indisputably the review petition under the CPC by a civil court, in respect of limitation is concerned, the same is governed by limitation Act providing 30 days time. But as far as limitation for review under the EA by various forums including the APERC,APTEL and the supreme court is concerned those are provided under the Conduct of Business Regulation of the concerned state commissions and that appeals before the aforesaid higher forums are concerned the same is specified under sec. 111 & 125 of EA 2003.Therefore in the absence of anything contrary in the main enactments, the limitation provided in the regulations at clause 49 would govern the period of limitation for filing Review petition.About the application of limitation Act, when a specific provision is made under the EA for filing certain proceedings, the limitation that provided is under the EA would govern the situation but not the provisions of limitation Act or the period provided under the Act. The said principle of law is decided by Hon’ble Supreme Court in a case between Chattisgadh State Electricity Board Vs CERC dt:15.4.2010 reported at 2010 ELR(SC) Page 313.Therefore, indisputably, as stated supra clause 49 of APERC Conduct of Business Regulations being subordinate Legislations has statutory force of Electricity Law and therefore when there is a specific period of limitation it excludes the application of Limitation Act. As such the objection is not tenable at law.

4. The review petition is not maintainable on any of the grounds or contentions raised therein It is well settled law that a review is not permissible for a mere re-hearing or for re-argument of the case The grounds permissible for they review petition are very narrow in terms of Order 47 of the Code of Civil Procedure. A review cannot be an appeal in disguise. At best, the Petitioners can urge the grounds raised in an appeal u/s 111 of the Act; but certainly not in a review.5. Save and except as may be specifically admitted herein, all the averments, contentions and allegations of the petitioners in the review petition are denied and disputed, and the petitioners are put to strict proof of the same.6. The contents and averments in paragraphs 1 and 2 are matters of record and do not require traverse.

Sri. Y.V.Subba Rao, Managing Director,M/s RPP Ltd.,Hyderabad.

Sri R.K.Agarwal, Hon. Chairman,M/s Andhra Pradesh Spinning Mills Association,Secunderabad

Sri.N.Padma Rao, Executive Director,M/s Jyoti Bio-Energy Ltd.Hyderabad.

2. About the grounds that are permissible in a Review Petition is concerned, no doubt the law is very much settled that to sustain a Review Petition, it should be within the grounds that are provided under Order 47 Rule (1) Code of Civil Procedure, unlike the Appeal.Order 47 Rule(1) reads “from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason” .The phrase “for any other sufficient reason” fell for interpretation before the Hon’ble Supreme Court in more than one occasion. It is settled law that the sufficient reason is not exhaustive and it can be any other reason which the Hon’ble Commission feels it as sufficient reason. In this case, the Hon’ble APERC in its Order dt:13.8.2013 categorically stated “DISCOMs are at liberty to approach the Commission afresh on Cross Subsidy Surcharge & Additional Surcharge proposals,

Page No.1/27


7. The contention and allegation in paragraph 3 that the conclusion of the Hon'ble Commission is contrary to law and also the result of omission of several vital aspects is erroneous and misconceived A review is not maintainable on the ground that the order and/or conclusion is contrary to law

8. The contention in paragraph 4 of violation of the principles of natural justice is insincere and a mere afterthought. The petitioners have merely alleged that Ihe approach of the Hon'ble Commission was "apparently hurried, It is a mere ruse to seek a re-argument and re-hearing in a manner impermissible in law. Tnis does not afford any ground of review

9. The contentions and averments in paragraphs 5 to 6 are legal arguments on the merits of the case and the reasons for Ihe decision. They cannot be grounds for review of the orderNevertheless, and without prejudice to the above, it is submitted that the petitioners' contention that the justification for the conclusion in the order is alien to law, and that the order under review suffers from consideration of extraneous material and non-consideration of relevant material is erroneous and misconceived, in any case this cannot be lawfully urged in a review petition,The operation of the judgment of the Appellate Tribunal in Appeal No 32 of 2009 has been stayed by the Hon'ble Supreme Court by order dated 2.8.2010 in C.A No. 5663 of 2010; and therefore no reliance can be placed on the said judgment.The judgment of the Appellate Tribunal in Appeal No 132 of 2011 dated 21.12.2012 is irrelevant as the issue in that case was whether a consumer connected to one distribution licensee In its area o- supply is liable for cross subsidy surcharge when such consumer sources electricity from another distribution licensee ,for (tie same / overlapping area of supply when such electricity is wheeled to such consumer through the lines of the former distribution licensee. It is a completely different fad situation and legal issueThe contentions in paragraph 8 are confused, confusing and misconceived. Of course, the distribution licensee has an universal obligation to supply and maintain supply continuously. But, when the facts show that the situation is such that the distribution licensees are unable to ensure and assure continuous supply and the Hon'ble Commission has / will place restrictions on the consumers' drawal of electricity from the distribution licensee, there is no question of any toss of cross subsidy element from the energy not permitted to be drawn from them. In any case, such arguments and contentions are beyond the scope of a review petition.

In respect of the effect of the Order passed by Hon’ble Tribunal in Appeal No.32 of 2009 is concerned, although the objector claimed that the said order of Tribunal has been stayed by the Hon’ble Supreme Court, no material evidencing the said claim is submitted. To the knowledge of the petitioners the said Order of the Tribunal is not stayed. Even otherwise the principle laid down by the APTEL cannot be ignored by this Hon’ble Commission until it is declared as incorrect by the Hon’ble Supreme Court. Mere interdicting through a Interim Order by a Higher Court, has no effect of desolving the principle laid down by the APTEL.

10. With regard to the averments in paragraph 8. It is not understandable what is meant by "there is absolutely no difficulty" The liberty given by this Hon'ble Commission Is lo file a fresh application if and when, the distribution licensees are able lo assure 100% power supply for at least four months consecutively. No liberty was given, and/or could have been given, for a review petition. The contention of the petitioners is wholly misconceived.Without prejudice to the above objection, the petitioners' averments even hi this petition are vague and non-specific. They simply say they will make all-out efforts to provide continuous supply. They do not assure continuous supply They do not specifically say and assure that continuous supply will be given for the next four months. They do not spell out the sources of supply and the costs associated with such intention. There is no assurance that they will not resort to imprudent and reckless power purchases at exorbitant cost and then seek lo pass these costs through to the consumers by way of true-up or such other means It is wholly insincere.In any case, such contentions are no ground For review

the EA 2003 does not talk of any condition for applicability of CSS

approach the Commission afresh on Cross Subsidy Surcharge & Additional Surcharge proposals, during this Financial Year, if they could assure 100% power supply to all subsidizing consumers, for at least four months consecutively”. Therefore sourcing the liberty given by the Hon’ble Commission the petitioners approached the APERC to review and revise the Order dt:13.8.2013. As such the grounds that are canvassed in the Review application are very much within the scope of permissible grounds under Order 47 Rule(1) Code of Civil Procedure. Hence the objection is not tenable.

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11. With regard lo paragraphs 11 and 12. there Is no whisper or explanation as lo how the finding of the Hon'ble Commission that there would be no loss of cross subsidy on account of exemption during R&C measures Is factually or logically wrong, it is a mere paid statement without particulars and/or reason or logic. There is no whisper as to how ft is contrary to trie Act. There is no factual information or details to show or substantiate that the HT consumers subjected to R&C measures have availed openIn any case, such contentions are no grounds for review

some of the HT consumers have availed Open Access during R&C measures.

12. The contentions and arguments in paragraph 13 are beyond the scope of review The Hon'ble Commission has dealt with the issue in detail in the order and reasons have been given If the Petitioners are aggrieved thereby, they may only prefer an appeal: but there can be no review of the order of the Hon'ble Commission on such grounds or contentions.

Regulation 2 of 99 clause 49 The Commission may on its own motion or on the application of any of the person or parties concerned, with in 90 days of the making of any decision, direction or order review such decision directions or orders and pass such appropriate orders as the Commission thinks fit.

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13. The contention that the order under review is detrimental to the Petitioners as stated in paragraph 14. and that the Discoms cannot afford to give any relief to consumers even during R&C periods are erroneous and misconceived; and In any case they are not permissible grounds for review,The R&C orders of the Commission provided for not levying any cross subsidy surcharges during the R&C periods That was accepted by the petitioners and not challenged by them. It has become final and binding on the petitioners. It has been implemented accordingly The Petitioners cannot now raise the Issue of levy of surcharge during R&C periods in. or by way of, this review petition or otherwise

In respect of the objection about not challenging the R&C Orders and its effect is concerned the R&C Order passed by the APERC is concerned only for a limited period and the same has been already made in effective from date 31.7.2013. Had the said Order is not made ineffective and if it is in force then the necessity of challenging or the effect of not challenging the same would arise. Indisputably the said R&C Order cease to be inforce from dt:31.7.2013. Therefore the said objection is not tenable.

14. The contention in paragraph 14 that the Hon'ble Commission has wide powers to review the orders passed by it is incorrect and misconceived. The powers conferred upon the Hon'ble Commission u/s 94(f) are expressly those as are vested in a civil court under the CPC. The power u/s 1U CPC and Order 47 CPC circumscribe and limit the power of review. It is a very limited power The Petitioners have not contended and/or brought any new matter or evidence which were either not within their knowledge or could not be produced at the time the order was made. There is no error apparent on face of (he record. There are no other sufficient reasons analogous to the foregoing. No review is therefore maintainable at all.

Regulation 2/99 clause 49 The Commission may on its own motion or on the application of any of the person or parties concerned, with in 90 days of the making of any decision, direction or order review such decision directions or orders and pass such appropriate orders as the Commission thinks fit.

15. As stated supra, the contention in paragraph 16 that the Hon'ble Commission gave liberty in para 37 of the order is wholly erroneous, willfully misleading and misconceived. Liberty was given to approach afresh upon the conditions imposed there for. No review petition is maintainable or can be entertained on the ptea of alleged liberty

16. It is submitted that the question of maintainability of the review petition requires to be decided as a preliminary issue. The review petition is liable to be rejected as not maintainable In the unlikely event of the review being granted, apart from the recourse and remedy of such order granting review, the matter will have to be re¬heard also on several of the other objections taken by objectors in the original proceedings after providing such information and clarifications that were sought in the original proceedings and/or may be sought thereafter

Our Association (SIMA) is 80 years old and it is the single largest employers’ organization representing the entire textile value chain right from cotton research and development to garments/ made-ups /technical textiles in the country and plays a lead role in all policy making committees at State and Central level pertaining to the textile industry. We have more than 550 member mills in our fold which are scattered in all the four Southern States of the country and also in few States in the upcountry. The Hon’ble Commission vide OP.No.54 of 2013 dated 13/8/2013 passed an order not to levy Cross Subsidy Surcharges for the year 2013-2014 with certain sound reasons. Against this order, all four DISCOMs have filed a Review Petition to reconsider the Hon’ble Commission’s order dated 13/8/2013 and fix Cross Subsidy Surcharges for the year 2013-2014. The Hon’ble Commission invited comments and suggestions on the Review Petition filed by four DISCOMs and hence the petitioner, The Southern India Mills’ Association, is filling its comments/suggestions on behalf of member mills as follows:- The four DISCOMs filed its objection mainly on the following grounds:

DISCOMs have the obligation to supply electricity to subsidizing consumers as per the Tariff Order. When cross subsidy surcharge is not collected from the subsidizing consumers then the anticipated cross subsidy in the Tariff Order can not be realized and there will be loss of cross

subsidy revenue for the DISCOM. .

4. In respect of the objection about the necessity of filing fresh proceedings than filing a review is concerned, the petitioner submits that, if the Discoms approaches the Commission with an assurance of continuous supply of power, the Order dt:13.8.2013 would be non-est. Therefore the filing of Review Petition is the only appropriate course to approach the Hon’ble APERC. Even otherwise, the Hon’ble APERC is vested with the inherent powers under Clause 55(3) of APERC Conduct of Business Regulations 1999 which reads that “Nothing in these Regulations shall, expressly or impliedly, bar the Commission to deal with any matter or exercise any power under the Act for which no Regulations have been framed, and the Commission may deal with such matters, powers and functions in a manner it thinks fit”. Therefore the objection is not tenable.

Dr.K.Selvaraju, Secretary

General,M/s The Southern India

Mills' Assocication,Coi

mbatore.

Page No.4/27


� The DISCOMs failure to give assurance of continuous supply of power for four months is an alien to the law for the determination of Cross Subsidy Surcharges and it cannot be a valid ground for challenge.� The Commission failed to consider the relevant materials and data submitted by DISCOMs for determining the Cross Subsidy Surcharge.� The Commission relied on certain extraneous materials and not considered the relevant materials, which was bad in law.� Quoting the APTEL order in Appeal No.32 of 2009 dated 28/4/2010, the Cross Subsidy Surcharge which is referred in the provision to sub-section 2 of Sec 42 of the Electricity Act, 2003 is a compensation charges.� In another APTEL case in Appeal No.132 of 2011 relaying on the Supreme Court order in Civil Appeal No.3466 & 3467 of 2006, it held that the consumer who continue to be connected to particular entity but have migrated to another company still they are liable for surcharge.� The order and review is detrimental to the interest of the DISCOMs whose financial positions are already looking grim.� DISCOMs cannot afford to give any relief to consumers in respect of cross subsidy even during R&C measures as the same would not be compensated and hence has to be passed on to the consumers in future tariffs.

there is a flaw in the argument that in case certain consumers of a subsidising category migrate to open access in power deficit situation, other consumers of the same category will avail of the power thus saved and pay higher tariff as per the tariff order thereby leading to a no loss scenario for the Discom. Evidence shows that the proportion of energy consumption by different categories of consumers has been completely altered vis a vis that projected in the tariff order.

Page No.5/27


Sri.Roberto de Barros Bezerra, Industrial Director,M/s Gerdau Steel India Ltd.Anantapur.

We, Gerdau Steel India limited situated In Tadipatri, are an integrated steel furnace based industry and producing I iron and steel.We thank you for providing opportunity to submit our comments on above stated subject.We have been availing Open Access power thru' Power Exchange since Dec-2012 due to restriction measures In the state Moreover the cost of the power is. more than DiSCOM price due lo the fact that Open access consumers used to pay for Transmission losses. Transmission charges, RPPO obligatory expenses, SLDC charges and Electricity duty. This results in paying "we Cost per unit [KWh) for Open access power.In addition to higher cost already Incurring to procure Open access power, this cross subsidy will Increase our operational cost and also diluting the very purpose of competitive benefit for consumer as envisaged by Electricity actHaving considered the above difficulties, me wish to make our representation in favour of "National

while the matter of adopting the method for calculation of CSS is in the purview of Hon’ble Commission, the extent of Cross subsidy is not guided by th eprice in the market instead the commission has arrived at the amount for the entire tariff year.

Sri.A.Bharat Reddy, Director,M/s Elcon Greengen India Pvt. Ltd.

“To encourage renewable energy sources, a relief of 50 percent on Surcharge shall be provided to consumers availing of open access from non-conventional energy projects located within the State of Andhra Pradesh”.

DISCOMs have the obligation to supply electricity to subsidizing consumers as per the Tariff Order. cross subsidy surcharge is not collected from the subsidizing consumers then the anticipated cross subsidy in the Tariff Order can not be realized and there will be loss of cross subsidy revenue for the DISCOM. Even during the period of short supply when R&C measures are in operation to the extent that power is supplied to subsidized consumers the resulting cross subsidy need to be recovered. If there is under recovery due to waiver the DISCOMs have to bear the loss burden.

“In order to encourage open access and to incentives the state consumers, purchase power from outside the state at reasonable rates, thereby relieving the state of the extra burden of high cost energy, the commission has decided to reduce the cross subsidy surcharge to zero.”

Providing relief during shortage period and it is a different thing to apply the shortage period conditions to the period of full availability. These two situations shall be distinguished clearly and treated differently. The Commission observed “ the Licensees are having obligation to supply of electricity to the consumers and when that obligation is not met, justice can be extended only through allowing the consumers to source the power under open access”.

The Cross-subsidy surcharge as determined by Commission from time to time shall not be applicable in case of open access wheeling transactions based on renewable energy sources. For the purpose of open access wheeling based on renewable energy sources, the cross-subsidy surcharge shall be ‘nil’.

It is under purview of Hon’ble APERC.

“It is observed from the prevailing market that the power sold by the RE generators to consumers directly can fetch them only rates comparable to the retail tariff applicable to such consumers. Retail tariff applicable to consumers is generally lower than the solar tariff. If the wheeling and banking charges and the cross-subsidy surcharges is deducted from the rates realized from the third party sales, the net price realized by the generators is not adequate to make solar generation financially viable.As noticed above, the Commission under section 86(1) (e) of the Electricity Act, 2003 has a mandate to promote the RE generation by providing suitable measures for connectivity and sale of electricity (emphasis supplied). Therefore, as a promotional measure, considering the high cost of generation of solar power and to enable solar power generators to spell the electricity generated in the market, the Commission decides not to levy any wheeling and Banking charges, or Cross-Subsidy Surcharge on the Solar generators who sell electricity on open access within the State”.

the commission has not come out with any such regulation on solar power.

Page No.6/27


Sri.Suresh Kumar Singhal, Chairman,All India Induction Furnace Association (South Central Region)

In the reference 3 cited the APERC has invited comments and suggestions of all interested persons and other stake holders in the matter of determination of cross subsidy , in the light of the Review petition filed by Discoms before the Commission.Originally APERC has called for suggestions and comments, on the issue of methodology to be adopted by the Commission in respect of the determination of cross subsidy surcharge for the year 2013-14.

The Hon'ble Commission, after careful examination of the points submitted in the public hearing and due consideration to various issues on supply side constraints, plights of OA Users, Discom's inability to give assurance with regard to power supply for at least 4 consecutive months during the remaining period of the financial years etc, the Commission determined the Cross Subsidy surcharge & Additional surcharge , payable by open access users , falling in the service area s of Respective Distribution Licensees, in the state as "nil" for the financial year 2013-14, in the orders issued under ref.l cited.However , Discoms were given the liberty to approach the Commission afresh on the cross subsidy surcharge & Additional surcharge proposals, for 2013-14, during this financial year, if they could assure 100 % power supply to all subsidized consumers , for at least four months consecutively.

But now, i.e., after a lapse of more than 5 weeks, the Discoms, without giving any assurance for the 100 % power supply, as contemplated in the order dated 13-08-13, have come up with a Review petition. In fact this review petition has come to light only on 10-10-13, with the public notice given by APERC on 10-10-13 .Thus a period of more than 2 months have lapsed, with the orders of APERC dated 13-08-2013, declaring the cross subsidy as "nil" for the financial year 2013-14, by the time the matter of reconsideration of the issue has come to light.

as observed by the objector the commission has conducted a public hearing for ironing out the issue in the methodology of calculation of CSS but the commission took a decision to waive the

CSS despite the EA-2003 providing for the same.

Page No.7/27


All our services were permitted open access, during this period, and have been availing power supply through Power Exchange, on the basis of" nil" cross subsidy, in accordance with the orders of APERC. Hence the status of availing power through open access, with nil cross subsidy, during the period from the date of orders of APERC i.e., 13-08-13 up to 31-08-13, will have to be protected, while issuing any orders by APERC on this issue, lest the consumers who have availed the open access power during this period will be put to irreparable loss for implementing the orders of APERC, and thus for no fault of usComing to the issue of the Review petition filed by the Discoms, the following points have to be reiterated:1. 4 months from 01-04-13 to 01-08-13 have lapsed with Restrictions in force, dueto the inability of Discoms to supply 100 % power.2. Consequent to lifting of restrictons, as per the suggestion of Discoms, theDiscoms have never taken action to restrict the NOCs issued by SLDC, for openaccess from 01-08-13 to 31-08-13. However many consumers, who were awarethat consequent to lifting of restrictions, the cross subsidy is likely to be levied,have continued to avail power by open access, taking into consideration that crosssubsidy will be liable to be paid, since there was no objection or withdrawal of theNOCs issued for the period from 01-08-13 to 31-08-13.3. In fact the Discoms have recommended for issue of NOCs, the cases of consumers with dedicated feeders and consumers under express feeders, providedall the consumers under the feeders have come up for availing open access, Irrespective of the voltage of supply, during the period beyond 31-08-13, thusindicating that their grid requires relief, meaning that the Discoms are not capable of extending 100 % power supply.

1. The said obligation of universal supply is subject to the clause 16 of general terms and conditions of supply issued by Hon’ble Commission dt.6.1.2006 amended time to time. The said Clause reads as that “The Company shall endeavor to afford continuous supply and to restore interrupted supply as early as possible. The Company shall be entitled to scatter or curtail supply of electricity to any consumer or a class of consumers in accordance with the Directions issued by the statutory authorities including Commission from time to time for maintaining efficient supply and securing equitable distribution of electricity. Therefore the Discoms, dehors to the fact of giving or otherwise of assurance as ordered in the order under review always obliged to provide supply to all consumers continuously subject to the orders passed by statutory authorities including state local Dispatch centre etc, as stated above.

2) In any of the circumstance the Open Access Consumer is obligated to pay Cross Subsidy Surcharge as for the Act.

4. All these consumers have availed power by open access, on the basis of nil cross subsidy for the year 2013-14.5. In the absence of no assurance on 100 % power supply for at least 4 months consecutively during this financial year, it is anticipated that the R&C measures may come into force any moment.6. Thus the real period for which 100 % power supply can be anticipated during the financial year 2013-14 will be either nil or a small traction of the period of the financial year.In the light of the above circumstances, it is requested that the orders issued on this issue on 13-08-13 are not revised and if by any chance they are likely to be revised, exemption will have to be given for the period from 13-08-13 up to date of issue of such revised orders , from levy of any surcharge, in respect of consumers who have availed open access facility, during the period under the orders of APERC, with the basis of nil cross subsidy, causing protection to the consumers, who have availed power through open access, based on the orders dated 13-08-13 of APERC.

The matter is in the purview of Hon’ble Commission.

Page No.8/27


Smt. P.Vydehi,The Federation of Andhra Pradesh Chambers of Commerce & Industry,Hyderabad

1. We have gone through the petition filed under Sec.94 of Electricity Act, 2003 read with clause 49 of A.P.E.R.C. (Conduct of Business) Regulations, 1999 by the A.P. Central Power Distribution Company Ltd.,, and other discoms in R.P.No. of 2013 in O.P.No.54 of 2013 (submitted) seeking to review the order dated 13.08.2013 of APERC for determination of Cross Subsidy Surcharge and Addl. Cross Subsidy Surcharge of the financial year 2013-14. At the outset, it is respectfully submitted that the petition filed under Sec.94 of the Electricity Act to review the order passed by the APERC is not maintainable and the same is liable to dismissed in limini. Sec.94 of the Electricity Act deals with regard to powers of the commission and the same is extracted as below :-“Sec.94 : Powers of appropriate commission : - (1) The Appropriate Commission shall, for the purposes of any inquiry or proceedings under this Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely-(a) summoning and enforcing the attendance of any person and examining him on oath;(b) discovery and production of any document or other material object producible as evidence;(c) receiving evidence on affidavits;(d) requisitioning of any public record;(e) issuing commissions for the examination of witnesses;(f) reviewing its decisions, directions and orders;(g) any other matter which may be prescribed.”

On a reading of the above provision, it is clear that the Commission has the same powers as are vested in a civil court under the Code of Civil Procedure, 1908.

Sec.94(f) of the Electricity Act provides the Commission with the power of reviewing its decisions, directions and orders as is given to the Civil Court under Order XLVII of C.P.C. Relevant portion of the Order XLVII of CPC is extracted as below:- “Order XLVII - Review :1. Application for review of judgment : (1) Any person considering himself aggrieved –(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred,(b) by a decree or order from which no appeal is allowed, or(c) by a decision on a reference from a court of small causes,and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the court which passed the decree or made the order.(2) ----”

On a reading of the above provision, it is clear that to apply for a review of the judgment by the aggrieved person, there should be a discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason. It is submitted that in the present case, the Hon’ble Commission after considering all the material evidence placed by the petitioners herein and the objections filed by the objectors in a proper perspective, has passed the order dated 13.08.2013. There is no error apparent on the face of record and the petitioners have neither pleaded nor placed any new and important matter of evidence which after the exercise of due diligence was not within their knowledge, to seek review of the order. It is respectfully submitted that none of the ingredients prescribed in Order XLVII Rule-1 of CPC is satisfied and hence, the review petition filed by the

the objection/suggestions made by APCPDCL at the time of original proceedings was not considered by the APERC and hence the review petition is now filed.

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2. It is respectfully submitted that the grounds for review mentioned at paras 3 to 16 by the petitioners are like the grounds made for appeal and the petitioners have not specifically pointed out at which the order under review suffers error apparent on the face of record or satisfies the ingredients of review under Order XLVII Rule-1. Therefore, the review petition filed by the petitioners is not maintainable and is liable to be dismissed.

2. About the grounds that are permissible in a Review Petition is concerned, no doubt the law is very much settled that to sustain a Review Petition, it should be within the grounds that are provided under Order 47 Rule (1) Code of Civil Procedure, unlike the Appeal.Order 47 Rule(1) reads “from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason” .The phrase “for any other sufficient reason” fell for interpretation before the Hon’ble Supreme Court in more than one occasion. It is settled law that the sufficient reason is not exhaustive and it can be any other reason which the Hon’ble Commission feels it as sufficient reason. In this case, the Hon’ble APERC in its Order dt:13.8.2013 categorically stated “DISCOMs are at liberty to approach the Commission afresh on Cross Subsidy Surcharge & Additional Surcharge proposals, during this Financial Year, if they could assure 100% power supply to all subsidizing consumers, for at least four months consecutively”. Therefore sourcing the liberty given by the Hon’ble Commission the petitioners approached the APERC to review and revise the Order dt:13.8.2013. As such the grounds that are canvassed in the Review application are very much within the scope of permissible grounds under Order 47 Rule(1) Code of Civil Procedure. Hence the objection is not tenable.

3. Even assuming but not admitting that really the petitioners are aggrieved by the order of the Commission dated 13.08.2013, they would have filed an appeal under Sec.111 of the Electricity Act and not the review under Sec. 94 of the Electricity Act. Hence, the review petition is not maintainable and is liable to be dismissed.

The review petition filed as per APERC Conduct of Business Regulation

4. It is respectfully submitted that this Hon’ble Commission after careful consideration of the points submitted in the public hearings and due consideration to various issues on supply side constrains, plights of OA users, Discoms inability to give assurance with regard to power supply during the remaining period of the financial year and their proposal to review the R&C measures after a period of one month, has passed the order. The order passed by the Commission is a well considered order and there is no error apparent on the face of record and it does not warrant any interference of this Hon’ble Commission by way of review.

When the commission made the tariff order providing different tariffs for different categories of consumers, it was with the intention of providing cross subsidy. That tariff order was made while R and C measures were very much in force and a deficit situation was prevailing. Now eliminating CSS on the grounds of deficit in power contradicts the earlier tariff order of the commission itself.

5. It is respectfully submitted that the petitioners have invented new pleas and raised additional grounds in the present review which are not raised at the time of passing of the order and hence, the review petition is not maintainable and is liable to be dismissed.

the commission has conducted a public hearing for ironing out the issue in the methodology of calculation of CSS but the commission took a decision to waive the CSS despite the EA-2003 providing for the same.

Page No.10/27


6. The review petition is presented on 20.09.2013 before the Hon’ble Commission seeking review of the orders dated 13.08.2013 is barred by limitation in as much as the same is beyond the period of 30 days prescribed under the Electricity Act, 2003 and no details have been furnished explaining the limitation.


7. In reply to the averments made in para-2 of the review petition, the petitioners have extracted the contents of para 37 of the order in review, as per which they have been given liberty to approach the Hon’ble Commission afresh on cross subsidy surcharge during present financial year in the event they assure 100% power supply to all subsidizing consumers at least for four months continuously. Admittedly, the present scenario is that the subsidized consumers are already suffering from power shortage and power cuts are being imposed by the petitioners officially and unofficially as well. Therefore, when the petitioners are unable to assure continuous power supply, they are precluded from claiming any cross subsidy surcharge. The liberty granted by the Hon’ble Commission is only in case they assure continuous power supply at least for four months, which as a matter of fact, the petitioners are incapable of doing so.

as per the sec 42 (2) EA-2003, the CSS has to be levied on all OA consumers for the energy consumer by then during the total Tariff year

8. In reply to the averments made in para-3 of the review petition, it is submitted that but for mentioning that the Hon’ble Commission has omitted several vital aspects of the cross subsidy surcharge, have not furnished any specific details of the same and just by making bald averments, cannot seek review of the order.

Page No.11/27


9. In reply to the averments made in para-4 of the review petition, it is submitted that the allegation of petitioners that the proceedings have been concluded by the Hon’ble Commission in a hurried manner, in violation of principles of natural justice is totally devoid of any merit and as a matter of fact, the Hon’ble Commission has given sufficient time for filing objections to the proposals of the petitioners and thereafter reply by the petitioners and enough time during the public hearing. The petitioners never raised this issue before the Hon’ble Commission while it has undertook the exercise of determination of cross subsidy.

APDISCOMs have presented their view points during the hearing of Cross Subsidy Surcharge

10. In reply to the averments made in para-5 of the review petition, it is submitted that the Hon’ble Commission having considered the fact that the petitioners were unable to make available continuous power supply and as a matter of fact they have approached the Hon’ble Commission for imposing Restriction and Control measures during the present financial year, which the Hon’ble Commission favourably considered and issued orders from time to time imposing power restrictions, rightly has decided not to impose cross subsidy surcharge on the subsidized consumers. It is pertinent to mention here that even in the R&C orders issued by the Hon’ble Commission, it has been specified that no cross subsidy surcharge would be leviable on the consumers who avail power supply through open access.

Open Access Consumers are obligated to pay Cross Subsidy Surcharge as per the Act.

11. The Hon’ble Commission further while determining cross subsidy surcharge for previous financial years has also specifically stipulated that the cross subsidy surcharge determined therein shall not be applicable if in case the petitioners are unable to supply power and impose power cuts with the permission of Hon’ble Commission. This condition has not been challenged by the petitioners and the same has become final. Therefore, supplying power continuously without any restrictions is sin-qua-non for claiming cross subsidy surcharge. Therefore, the allegation of the petitioners that the Hon’ble Commission has not considered the relevant material and data submitted by them while passing the order in review is totally misconceived.

Open Access Consumers have to pay Cross Subsidy Surcharge as per Electricy Act, 2003

12. In reply to the averments made in paras-6 and 7 of the review petition, it is submitted that the grounds alleged are not within the scope of review and the petitioners have never raised the above said grounds either in the original proposals or during the hearing before the Hon’ble Commission. The petitioners are not entitled to levy cross subsidy surcharge as a matter of right and the same is not a tax on the consumers. There should be rationale and purpose and object that is sought to be achieved while determining and levying cross subsidy surcharge, and the same is not automatic unlike levy of tax. The Hon’ble Commission has rightly determined cross subsidy surcharge as “nil” as the subsidized category of consumers are already burdened with high tariffs. The reference to orders of Hon’ble Appellate Tribunal in appeal No. 32 of 2009 and appeal No.132 of 2011 are not relevant for present review petition and rendered in different facts and circumstances of the cases.

Open Access Consumers have to pay Cross Subsidy Surcharge as per Electricy Act, 2003

13. In reply to the averments made in paras-8 to 16 of the review petition, it is respectfully submitted that the grounds raised therein are in substance attacking the findings recorded by the Hon’ble Commission and if the petitioners are aggrieved by these findings, especially those that are paras-33, 34, 36 and 37 of the order in review, they have a remedy of challenging those remedies under Sec.111 of the Electricity Act, 2003 but not by way of review under Sec.94 of the Act. The Hon’ble Commission has given enough reasons and recorded findings and therefore, these findings cannot be upset in review proceedings.

as per clause 49 of reg 2 of 1999, the review petition is filed

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14. The Hon’ble Commission in its order dated 13.08.2013 has given liberty to the petitioners to approach afresh however on the condition of they assuring continuous power supply atleast for four months. Even assuming that the petitioners intend to utilize the liberty granted, they have to satisfy that they would assure continuous power supply and secondly they can only come up with a fresh petition and not by way of review. This objector seeks leave of the Hon’ble Commission to produce material evidence to show that the petitioners have been imposing power cuts to the various consumers. The objector further craves leave of this Hon’ble Commission to file additional objections, if any. For the aforementioned reasons, it is prayed that this Hon’ble Court may be pleased to dismiss the review petition and pass such other order or orders as this Hon’ble Commission deems fit and proper in the circumstances of the case.

As per the scope given to file a fresh the APDISCOMs have filed the review petition.

1. When the Discoms are serving all categories of consumers, including subsidised consumers, they have a social responsibility of providing cross subsidy to the subsidised consumers as decided by the Commission. When cross-subsidising consumers leave the Discoms under the arrangement of open access, the latter get deprived of revenue that accrues on account of cross subsidy. As a result, to the extent cross subsidy is lost, either the tariffs to the subsidised consumers or the subsidy to be borne by the Government will have to be increased. On the other hand, the suppliers and consumers under open access will have no obligation to provide cross subsidy, if there is no cross subsidy surcharge. In other words, it will create a situation in which social responsibility and additional burden to the Government and additional burden to the subsidised consumers, on the one hand, and profits to open access suppliers and benefits to open access consumers, on the other. That is the reason why imposition of cross subsidy surcharge on open access consumers is permitted in the Electricity Act,

It is prayed that Hon'ble APERC may consider

2. Whatever principles the Commission is following in determining cross subsidy in its tariff orders, the same should be followed in determining cross subsidy surcharge also. In other words, cross subsidy surcharge should be equal to cross subsidy. It is more so because, open access purchases would be preferred by consumers sif only the cost of such purchases is less than, or equal to, the tariffs to be paid to the Discoms for same quantum of power. Therefore, cross subsidy surcharge equivalent to cross subsidy should be imposed on open access consumers, who are not consumers of the Discoms in the State.

It is prayed that Hon'ble APERC may consider

3. In a situation of severe scarcity for power when cross subsidising consumers of the Discoms are subjected to severe power cuts for a considerable period of time and forced or permitted to get power through open access from other sources, obviously, at a higher price than the tariffs of the Discoms applicable to them, imposing cross subsidy surcharge on such open access purchases would tantamount to penalising such cross subsidising consumers. However, when cross subsidising consumers of Discoms prefer open access purchases when there are no power cuts, cross subsidy surcharge should be imposed on them. When Discoms impose power cuts on such consumers for a considerable period of time, and when such cross subsidising consumers purchase power from other sources under the arrangement of open access at prices which are lower than the tariffs of the Discoms applicable to them, then cross subsidy surcharge should be imposed on open access purchases made by them and the same should be equivalent to the difference between the tariff of the Discoms applicable to such consumers and price at which the latter purchase power under open access.

Sri.Venugopala Rao, Convener,Centre for Power Studies,Hyderabad

Page No.13/27


4. There is no justification in imposing conditions on the Discoms like ensuring supply of power to cross subsidising consumers for a continuous period of four months without interruption for the purpose of imposition of cross subsidy surcharge. Due to any unforeseen exigency, the Discoms may be constrained to impose unscheduled power cuts which cannot be avoided and such risks are inherent in the power system itself. If such unreasonable conditionalities are imposed on the Discoms, the open access consumers get undue benefit taking advantage of such unavoidable exigencies.

5. The main reasons for power shortage in the State are failures of the Government of India in ensuring supply of fuels like natural gas and coal as per allocations made by it. As such, I request the Commission to recommend to the Government to provide additional subsidy to cover the loss of cross subsidy the Discoms suffer whenever substantial scarcity for power is created by the failures of the Government in ensuring adequate supply of fuels like natural gas and domestic coal as per allocations made by it to the power projects with whom the Discoms had power purchase agreements and cross subsidising consumers are forced to purchase power under open access at prices higher than the applicable tariffs of the Discoms.


Sri.R.Kishore, Sr. Engineer,M/s Amara Raja, Batteries Ltd.Tirupati.

3. In reply to Para 1 & 2 of the Review Petition, though the same is formal in nature, but the order under review is specific and self explanatory. Merely because the Commission has given liberty to DISCOMs to approach the Commission afresh. It would not be permissible for the Dtscoms to seek review of the Commission's order in its entirety as sought under review petition, without the conditions Imposed by the Commission in the Order dated 13.8.2013 be complied by the DISCOMs.

4. In reply to Para 3 of the Review Petition, the cross subsidy surcharge is applicable for long term and bilateral contracts only. For short term open access (through exchange) the crass subsidy surcharge is not applicable, if the Discoms are not able to supply power during imposition of R&C measures,If DISCOMS are not able to supply power (which is the admitted and undisputed fad) and if the energy ts purchased through exchanges (Short term open access) during imposition of R&C measures then the Cross Subsidy Surcharge is not aoplicable.

As per the EA 2003, Section 42(2) the Open Access Consumer has to pay Cross Subsidy Surcharge. When the commission made the tariff order providing different tariffs for different categories of consumers, it was with the intention of providing cross subsidy. That tariff order was made while R and C measures were very much in force and a deficit situation was prevailing. Now eliminating CSS on the grounds of deficit in power contradicts the earlier tariff order of the commission itself.

5. In reply to Para 4 of the Review Petition the entire allegations are hereby denied for want of tactual details and explanation as to how the principles of natural justice are violated, when there is no whisper.6. In reply lo Para 5 of the Review Petition, the Cross Subsidy Surcharge should be determined for the financial year 2013-14, but it is applicable only for long term and bilateral consumers who opt for open access even if Discoms are able to supply power Further, as per the Act this Cross Subsidy surcharge should be progressively reduced and eliminated over a period of time by having a road map .DlSCQM's should submit the road map for eliminating cross subsidy surcharge to commission as per the Electricity Act 2003.7. In reply to Para 6 and 7 of the Review Petition, the reply for the same is as that of Para 4 as slated above. The cross subsidy surcharge is applicable to captive generating consumers. This is not applicable to short term open access consumers who opt for power purchase through exchange If Discoms are not able to supply power, during R&C period.

Road map is being submitted along with the ARR filings.

Page No.14/27


8. In reply to Para 8 of the Review Petition, the terms and conditions of supply issued by the Commission dated 1.6.2006 applies only for emergency mitigation. It is does not apply for Restriction & Control measures where there is continuous shortage of power supply. 9.ln reply to para 9 of the review petition , DISCOM's view of not listening to their point of view is not right, as commission has conducted public hearing and issued the order after carefully listening to the views of all stake holders.10. In reply to Para 10 of the Review Petition, if DlSCOMS are able to supply 100% power, then the cross subsidy is applicable for all the consumers as per the Act.11. In reply to Para 11 of the Review Petition, K the DlSCOMS are not able to supply power, the cross subsidy for the shortage of power will not arise and if the consumer goes for open access for that quantum of power, there will not be any toss for DlSCOMS in (he form of cross subsidy. The Commission's order on applicability of cross subsidy surcharge Is in line with practices followed by other SERC's.

12. In reply to Para 12 of the Review Petition, at present SLDCs are issuing NOCs as per the R&C measures imposed by DISCOM's. If the consumer procures power from open access within the limits of NOC, there should not be any cross subsidy surcharge on such transaction.13. In reply to Para 13 of the Review Petition, if DlSCOMS are able to supply full power men the Cross subsidy surcharge is applicable to all open access consumers.14. In reply to Para U of the Review Petition, it is submitted that the same is not valid ground for review.15. In reply to Para 15 of the Review Petition, consumers are not going for open access on their own Interest or due to any financial advantage by avoiding the DISCOMs power, but in the unavoidable situation of Restriction & Control measures imposed by DISCOM's. Consumers are paying higher price towards open access power purchase than the DISCOMs power tariff besides paying the central and state utility losses. Hence the waiver of Gross Subsidy Surcharge during R& C measures given by APERC holds good. Also other governments like Tamil Nadu have waived off the Cross subsidy surcharge during the Restriction & Control measures period. If the cross subsidy Is imposed during the R&C measures period, this will hinder the growth of industries and economic development. The Commission need to consider the above facts and should continue their order on cross subsidy during R&C measures.

16. In reply to Para 16 of the Review Petition, the methodology is not the question now. It Is on imposition of Cross Subsidy Surcharge to consumers. The methodology is to be discussed separately while determining the rate for cross subsidy surcharge.17. In reply to Para 17 and 16 of the Review Petition, the paras are formal in nature In view of the above, the Review Petition filed by the Discoms wholly misconceived and as such is liable to rejected and we pray accordingly

In fact the Public hearing was conducted for determination of methodology for adopting cross subsidy surcharge, but the decision was taken for waiver of cross subsidy surcharge which is against the provisions of the EA 2003.


Page No.15/27


Sri.Srinivas, M/s Steel Exchange India Ltd.Hyderabad

We (Steel Exchange India Limited) is a core steel manufacturing company having 2.50,000 Torts/Annum capacity Sponge Iron Unit along with Steel Melt Shop and Rolling Mill which are of continuous process with a demand of 27MW We are further having expansion of our steel manufacturing to 6/10,000 Tons/Annum by adding Pellet Plant and steel Melt Shop with a total demand of 54MW by 2014.In view of the above, we have started our own 60MW captive power plant as an SPV to cater our present and future captive requirement. Our 60MW captive power plant Is commissioned in Nov-2012. Presently we are in a plan of 27.S4MW {51% of net generation i.e. 60MW-6MW auxiliaries) of captive utilization and balance 26.46MW power pumping to APTRANSCO through short term agreementWe are not able to produce our rated production capacities because of Extreme fall In Steel demand in Andhra Pradesh due to Strikes and Agitations, No growth in Steel Demand as projected by the Government and increase in imported coal price due to fall In Rupee value.In view of the above, we are not able to achieve our projected 51% of captive power consumption. Hence we have a short term agreement with APTRANSCO through RETL for pumping our surplus power 40MWWe requesting you to exempt the Cross Subsidy Surcharge on non-utilization of the 51* of captive generation to our captive requirement on The following grounds.

Levy of Cross Subsidy Surcharge for captive generation power plants is based on the specific provisions stipulated in the Electricity Act 2003

� We have paid Rs.4,05,00,000/- towards development charges for 27MVA of contracted demand with APEPOCL before commissioning of our captive power plant. Now we are utilizing our own captive power by de-rating out contracted demand to 6MW as a Start-up power We are further paying 30 lacks every month as minimum charges to APEPDCL � Major part of the fixed cost to that Discerns is the subsidies to the agricultural consumers which are to be borne by Government as a policy incorporated as vote bank politics� There is no proper metering arrangement to the agricultural consumers. Every consumer shall havea meter and has to be billed. If they are subsided, the billing amount has to be levied by theGovernment as a policy.

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� Due to the improper metering arrangements. Discerns are imposing the power losses due to theftsand power losses in agriculture due to pump sets of non IS1 & of higher rating than specified ratingas Distribution losses and it is not at all correct.� We are not at all an open access consumer, we are not utilizing any of the APTRANSO network for transmission of power and we are utilising our captive power through our own network within our premises.� We are having shortage of 51% obligation under captive power plants due to unexpected fall in steel demand and due to delay i r our expansions.� We are pumping all the excessive power only to the APTRANSCO on short term agreement at therate fixed by APERC There is no margins with the rate Rs.5.46/- oer unit which (s fixed by APERCconsidering imported coal pricing and fixed costs of the plant.� The cost of generation is already on higher sl«e due to fall in Rupee value as our olant is completelydependent an imported coal on -ion-allocation of Indian coals.� On imposing cross subsidy over and above generation cost is not viable with the present steelpricing as the power cost is the major cost In the steel manufacturing and it is appro*'mately 1200KWH/Ton of s,teei production.

� The plant Is basically GSAl India Limited is a sick unit referred TO BIFR. Steel Exchange India Limned is acquired the unit and revived with lot of efforts. About 1000 employees directly and 2000 indirectly are dependent on the plant We are not able to pay the salaries to our employees from the last two months because of the crisis.� FSA charges for- the financial year 2010-11, 2011-1.2 and 2012-13 which are imposed by the Discoms are already a huge burden to us. Based on manufacturing cost arrived from power bill during that financial year, we have sale the steel with a minimum margins Now we are paying as FSA and are not possible to recover from the market� During the period of power restrictions before R&C measures and during the period of R&C measures, we are not able to produce steel ever we are having the demand.We are requesting once again to review the same and help us in surviving the plan! from the present unfortunate situation.

In the reference 3 cited the APERC has invited comments and suggestions of all interested persons and other stake holders in the matter of determination of cross subsidy , in the light of the Review petition filed by Discoms before the Commission.Originally APERC has called for suggestions and comments, on the issue of methodology to be adopted by the Commission in respect of the determination of cross subsidy surcharge for the year 2013-14.

M/s Granules India Ltd,Hyderabad

M/s Devashree Ispat (P) Ltd,Hyderabad

Page No.17/27


The Hon'ble Commission, after careful examination of the points submitted in the public hearing and due consideration to various issues on supply side constraints, plights of OA Users, Discom's inability to give assurance with regard to power supply for at least 4 consecutive months during the remaining period of the financial years etc, the Commission determined the Cross Subsidy surcharge & Additional surcharge , payable by open access users , falling in the service area s of Respective Distribution Licensees, in the state as "nil" for the financial year 2013-14, in the orders issued under ref.l cited.However , Discoms were given the liberty to approach the Commission afresh on the cross subsidy surcharge & Additional surcharge proposals, for 2013-14, during this financial year, if they could assure 100 % power supply to all subsidized consumers , for at least four months consecutively.


But now, i.e., after a lapse of more than 5 weeks, the Discoms, without giving any assurance for the 100 % power supply, as contemplated in the order dated 13-08-13, have come up with a Review petition. In fact this review petition has come to light only on 10-10-13, with the public notice given by APERC on 10-10-13 .Thus a period of more than 2 months have lapsed, with the orders of APERC dated 13-08-2013, declaring the cross subsidy as "nil" for the financial year 2013-14, by the time the matter of reconsideration of the issue has come to light.

The review petition is filed as per APERC conduct at Business Regulations.

All our services were permitted open access, during this period, and have been availing power supply through Power Exchange, on the basis of" nil" cross subsidy, in accordance with the orders of APERC. Hence the status of availing power through open access, with nil cross subsidy, during the period from the date of orders of APERC i.e., 13-08-13 up to 31-08-13, will have to be protected, while issuing any orders by APERC on this issue, lest the consumers who have availed the open access power during this period will be put to irreparable loss for implementing the orders of APERC, and thus for no fault of usComing to the issue of the Review petition filed by the Discoms, the following points have to be reiterated:1. 4 months from 01-04-13 to 01-08-13 have lapsed with Restrictions in force, dueto the inability of Discoms to supply 100 % power.2. Consequent to lifting of restrictons, as per the suggestion of Discoms, theDiscoms have never taken action to restrict the NOCs issued by SLDC, for openaccess from 01-08-13 to 31-08-13. However many consumers, who were awarethat consequent to lifting of restrictions, the cross subsidy is likely to be levied,have continued to avail power by open access, taking into consideration that crosssubsidy will be liable to be paid, since there was no objection or withdrawal of theNOCs issued for the period from 01-08-13 to 31-08-13.3. In fact the Discoms have recommended for issue of NOCs, the cases of consumers with dedicated feeders and consumers under express feeders, providedall the consumers under the feeders have come up for availing open access, Irrespective of the voltage of supply, during the period beyond 31-08-13, thusindicating that their grid requires relief, meaning that the Discoms are not capable of extending 100 % power supply.


T.V.Ravindra Babu, Manager, Program Management,Dr.Reddy's Laboratories Ltd,Hyderabad

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4. All these consumers have availed power by open access, on the basis of nil cross subsidy for the year 2013-14.5. In the absence of no assurance on 100 % power supply for at least 4 months consecutively during this financial year, it is anticipated that the R&C measures may come into force any moment.6. Thus the real period for which 100 % power supply can be anticipated during the financial year 2013-14 will be either nil or a small traction of the period of the financial year.In the light of the above circumstances, it is requested that the orders issued on this issue on 13-08-13 are not revised and if by any chance they are likely to be revised, exemption will have to be given for the period from 13-08-13 up to date of issue of such revised orders , from levy of any surcharge, in respect of consumers who have availed open access facility, during the period under the orders of APERC, with the basis of nil cross subsidy, causing protection to the consumers, who have availed power through open access, based on the orders dated 13-08-13 of APERC.

Sri.Pramod Kumar

Agarwal,

Director,M/s

Sitaram Spinners

Pvt.

Ltd.,Secunderaba

d

In response to your public notice dated 10th July of 2013 the offer the following few comments amongst all other which will be advanced doing the hearing on November 01st- 2013 at 11 AM.On our behalf our Advocate and alongwtth the Interested persons Shri Pramod Kumar Agarwal filed this comments & suggestion petition as a Director capacity on behalf of my bellow's cornpanies:-SITARAM SPIMNER PVT LTD, Shall attend the hearing to put forth our comments and suggestions as desires:-1. Firstly The Commission was intended to determination qf Cross Subsidy Surcharge for the year 2013-14 in this regard a draft proposal for determining the methodology of Cross Subsidy and levy of Cross Subsidy Surcharge for the year 2013-14 taken up fn O.P. No,54 of 2013 (Suo-moto).

Sri.Gopal Agarwal,

Director,M/s

Rama Spinners

2. It is submitted that the Hon'ble commission held public hearing on 06.08.2013 in respect of the sad matter and passed orders dt. 13.8.2013,


Sri.Pramod Kumar

Agarwal,

Director,M/s MS

Agarwal Foundries

3. in the matter of determining the methodology Off crass subsidy and levy of cross subsidy surcharge for the year 2013-14 under sections 39, 40, and 42 of the electricity Act,20Q3.


Sri.Pramod Kumar

Agarwal,

Director,M/s

Agarwal

Foundries,Secund

erabad

4. The Discerns have filed a review petition u/s 94 of the electricity act 2003 read with the clause 49 of conduct of business regulation, 1999 seeking review of the commission order dated 13.08.2013 on determining the cross subsidy surcharge for the FY 2013 14. The petition is taken on record and assigned RP< No. 1 of 2013.


5. The reasons behind determination of Cross Subsidy Surcharge for the year 2013-14, surcharge formula to deferent types methodology of cross subsidy surcharge 1-embedded cost methodology and the national tariff policy both are excessive, unreasonable, onerous and impractical levels and the surcharge formula [s: - S = T- [C(1+L/100} + D ]-is fully wrong and wholly arbitrary, illegal, contrary and the draft of the same formula should be unnourished as Immediately.


6. The DISCQMs have absolute social, public and statuary responsibility with larger accountabilities to provide electricity supply for all kinds or category of consumers under law.

The DISCOMs are providing electricity supply for all kinds or category of consumers based on the availability of Power time to time.

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7. Apart from the above the rest of the comments / suggestions shall be put forth for consideration during the hearing on November 1,2013 at 11 AM,

1. The Andhra Pradesh Electricity Regulatory Commission has issued a Public Notice on 10th October, 2013 notifying the public its decision to take on record a Review Petition filed by APDISCOMs seeking review of the Commission’s Order dated 13th August, 2013 on determining the Cross Subsidy Surcharge for the year 2013-14 (R P No.1 of 2013) and inviting comments and suggestions from all interested persons and other stakeholders. We are submitting the following for the consideration of the Commission in response to the above Public Notice.

2. The Commission in its Order dated 13th August, 2013 in O. P. No. 54 of 2013 determined Cross-Subsidy Surcharge & Additional Surcharge, under the provisions of the Electricity-Act 2013, payable by Open Access Users, falling in the service areas of respective Distribution Licensees in the State, as “nil” for the Financial2013-14. We are of the opinion that the above Order is not based on facts and is not in the interest of the power sector in the state.

3. While issuing the above Order the Commission appears to be in hurry. In this the Commission seems to have missed some of the important issues in deciding on cross subsidy surcharge. It was normal practice to give at least three weeks time to submit written comments/suggestions and hold the hearing on the same a week after that. But in the case of the Order dated 13th August, 2013 even two weeks time was not given for written submission. The public notice was issued on 20th July, 2013 directing the written comments to be submitted by 3rd August and public hearing was held on 6th August. This tight schedule might not have given sufficient time to the Commission to examine the issues thoroughly and comprehensively.

Under the purview of the Hon'ble APERC

4. While issuing ‘nil’ cross subsidy surcharge and additional surcharge Order the Commission paid attention to only the subsidising consumers who might have resorted to open access due to R&C measures imposed by the Commission in response to a petition filed by the DISCOMs. It is understandable that as DISCOMs failed to meet their contracted demand they were forced to resort to open access, and as such they may be exempted from cross subsidy surcharge and additional surcharge during the period R&C measures are in operation. But there are consumers who avail themselves of open access irrespective of whether R&C measures are in operation or not. Such open access consumers need not be exempted from the cross subsidy surcharge and additional surcharge as mandated by the Act. Such consumers but for the open access would have sourced their power needs from the DISCOMs. By doing this the Commission has deprived the DISCOMs of their legitimate revenue. This is adversely impacting the DISCOMs when they are going through difficult financial situation.


Sri.K.Raghu, Certified Energy

Manager and Auditor,

Cordinator,Telangana Electricity

Employee's JAC,Hyderabad

Sri.M.Thimma Reddy,

Convenor,People's Monitoring

Group on Electricity Regulation

Page No.20/27


5. The Commission in its earlier Orders related to cross subsidy surcharge and additional surcharge as well as R&C measures cross subsidy surcharge was waived when R&C measures were in operation. For example, the Commission in its Order dated 26-10-2012 in O P No. 77 of 2012 related to cross subsidy surcharge and additional surcharge directed the DISCOMs not to levy these charges during the period when R&C measures are in operation. In this Order no rationale was provided for this stipulation. The R&C measures may not be applicable to the open access consumers who source power from outside the DISCOM. Even during the period R&C measures are in operation the consumers of DISCOMs pay cross subsidy for the units consumed by them. No new tariff is provided for these consumers for the period when R&C measures are in operation. There is no reason to exempt open access consumers from payment of cross subsidy surcharge and additional surcharge during the period when R&C measures are in operation.


6. Even under R&C measures the treatment is not uniform among all subsidizing consumers. In the recent past the Commission amended the R&C Orders many times to provide relief to some of these consumers. For example, the Commission in its Tariff Oder for the FY 2013-14 stated, “Certain class of consumers has been granted exemption to R&C measures, by the Commission based on the recommendations of the DISCOMs and the examination of the criticality of the purpose of usage” (para 222, p.131). When there is no uniform treatment of subsidizing consumers under R&C measures there is no rationale in issuing a blanket ‘nil’ cross subsidy surcharge and additional surcharge Order. The Commission needs to take in to account this lack of uniformity in applicability of R&C measures while deciding on cross subsidy surcharge and additional surcharge.


7. The Electricity Act exempts only those open access consumers who draw power from their captive units from paying cross subsidy surcharge and additional surcharge. All other open access consumers have to pay these charges. According to Sections 39 and 40 of this Act, “such surcharge shall not be leviable in case open access is provided to a person who has established a captive generating generating plant for carrying the electricity to the destination of his own use”.


8. The present Order of the Commission which is being reviewed waived payment of cross subsidy surcharge and additional surcharge not only during the period R&C measures are in operation but for the whole financial year. The grounds adduced by the Commission for the same do not appear to be sound and rational. The Commission pointed out that as the DISCOMs failed to give an assurance that they would provide uninterrupted power supply for four months continuously they will not be eligible to recover cross subsidy surcharge. The Act as well as the General Terms and Conditions of Electricity formulate under it empower DISCOMs to give advance notifications of breakdowns/interruptions in power supply. When normal power supply is restored and power is made available to all consumers cross subsidy element enters in to the picture. If this four months stipulation is introduced the DISCOMs will not be in a position to recover their costs. It is also an obligation on the part of the Commission to see that the Licensees recover their legitimate costs.


Page No.21/27


9. The Commission in its above Order through paragraphs 33 to 36 tried to underline that the DISCOMs would not lose any cross subsidy because of waiver of the same. This is far from truth. Even if availability of full power is for short period only the DISCOMs still have the obligation to supply electricity to subsidizing consumers during this period as per the Tariff Order. If during such period when full power is available and cross subsidy surcharge is not collected from the subsidizing consumers then the anticipated cross subsidy in the Tariff Order can not be realized and there will be loss of cross subsidy revenue for the DISCOM. Even during the period of short supply when R&C measures are in operation to the extent that power is supplied to subsidized consumers the resulting cross subsidy need to be recovered. If there is under recovery due to waiver the DISCOMs have to bear the loss.

APDISCOMS agree with the views

10. It is one thing to provide relief during shortage period and it is a different thing to apply the shortage period conditions to the period of full availability. These two situations shall be distinguished clearly and treated differently. The Commission observed “ the Licensees are having obligation to supply of electricity to the consumers and when that obligation is not met, justice can be extendedonly through allowing the consumers to source the power under open access without any surcharge” (para 35) and “In the present power shortage situation, there is nothing that DISCOMs could lose by allowing the consumers to source their power requirement to theextent of shortage” (para 36). Then the Commission goes on to apply the same conditions to full availability period also saying that DISCOMs were not able to give assurance about continuous power supply. DISCOMs in their review petition (para 10) stated that they are ready to assure supply.


11. Given this, the Commission is requested to review its above Order and bring in to operation cross subsidy surcharge and additional surcharge in keeping with the Tariff Order for the year 2013-14.


12. The draft note circulated earlier did not refer to additional surcharge. Earlier the Commission adopted 10% of wheeling charge as additional surcharge. But no rationale was provided for the same.

13. Cross subsidy surcharge and additional surcharge shall be announced as a part of the Tariff Order every year.

It is prayed that Hon'ble APERC may consider all the above suggestions which are as for Electricity Act, 2003

14. Before the Commission takes a final decision on this issue we would like to be heard in person.

1. We have gone through the petition filed under Sec.94 of Electricity Act, 2003 read with clause 49 of A.P.E.R.C. (Conduct of Business) Regulations, 1999 by the A.P. Central Power Distribution Company Ltd.,, and other discoms in R.P.No. of 2013 in O.P.No.54 of 2013 (submitted) seeking to review the order dated 13.08.2013 of APERC for determination of Cross Subsidy Surcharge and Addl. Cross Subsidy Surcharge of the financial year 2013-14. At the outset, it is respectfully submitted that the petition filed under Sec.94 of the Electricity Act to review the order passed by the APERC is not maintainable and the same is liable to dismissed in limini. Sec.94 of the Electricity Act deals with regard to powers of the commission and the same is extracted as below:-

Sri.B.S.S.V.Narayana, Manager (Finance & Accounts),M/s Synergies Casting Ltd.,Visakhapatnam

Sri. Chiranjib

Page No.22/27


“Sec.94 : Powers of appropriate commission :- (1) The Appropriate Commission shall, for the purposes of any inquiry or proceedings under this Act, have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the following matters, namely-(a) summoning and enforcing the attendance of any person and examining him on oath;(b) discovery and production of any document or other material object producible as evidence;(c) receiving evidence on affidavits;(d) requisitioning of any public record;(e) issuing commissions for the examination of witnesses; (f) reviewing its decisions, directions and orders;(g) any other matter which may be prescribed.”

On a reading of the above provision, it is clear that the Commission has the same powers as are vested in a civil court under the Code of Civil Procedure, 1908. Sec.94(f) of the Electricity Act provides the Commission with the power of reviewing its decisions, directions and orders as is given to the Civil Court under Order XLVII of C.P.C. Relevant portion of the Order XLVII of CPC is extracted as below:-“Order XLVII - Review :

1. Application for review of judgment : (1) Any person considering himself aggrieved –(a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred,(b) by a decree or order from which no appeal is allowed, or(c) by a decision on a reference from a court of small causes,and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason, desires to obtain a review of the decree passed or order made against him, may apply for a review of judgment to the court which passed the decree or made the order.(2) --------“

the objection/suggestions made by APCPDCL at the time of original proceedings was not considered by the APERC and hence the review petition is now filed.

On a reading of the above provision, it is clear that to apply for a review of the judgment by the aggrieved person, there should be a discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason. It is submitted that in the present case, the Hon’ble Commission after considering all the material evidence placed by the petitioners herein and the objections filed by the objectors in a proper perspective, has passed the order dated 13.08.2013. There is no error apparent on the face of record and the petitioners have neither pleaded nor placed any new and important matter of evidence which after the exercise of due diligence was not within their knowledge, to seek review of the order. It is respectfully submitted that none of the ingredients prescribed in Order XLVII Rule-1 of CPC is satisfied and hence, the review petition filed by the petitioners is not maintainable and is liable to be dismissed.


Sri. Chiranjib Das, CEO,M/s Scan Energy & Power Ltd.

Sri. Challa Gunaranjan, Counsel,M/s Owens Cornigns Ltd.

Sri.Challa Gunaranjan, Counsel,M/s India Cements Ltd.

Page No.23/27


2.It is respectfully submitted that the grounds for review mentioned at paras 3 to 16 by the petitioners are like the grounds made for appeal and the petitioners have not specifically pointed out at which the order under review suffers error apparent on the face of record or satisfies the ingredients of review under Order XLVII Rule-1. Therefore, the review petition filed by the petitioners is not maintainable and is liable to be dismissed.3. Even assuming but not admitting that really the petitioners are aggrieved by the order of the Commission dated 13.08.2013, they would have filed an appeal under Sec.111 of the Electricity Act and not the review under Sec. 94 of the Electricity Act. Hence, the review petition is not maintainable and is liable to be dismissed.

2. About the grounds that are permissible in a Review Petition is concerned, no doubt the law is very much settled that to sustain a Review Petition, it should be within the grounds that are provided under Order 47 Rule (1) Code of Civil Procedure, unlike the Appeal.Order 47 Rule(1) reads “from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made, or an account of some mistake or error apparent on the face of record, or for any other sufficient reason” .The phrase “for any other sufficient reason” fell for interpretation before the Hon’ble Supreme Court in more than one occasion. It is settled law that the sufficient reason is not exhaustive and it can be any other reason which the Hon’ble Commission feels it as sufficient reason. In this case, the Hon’ble APERC in its Order dt:13.8.2013 categorically stated “DISCOMs are at liberty to approach the Commission afresh on Cross Subsidy Surcharge & Additional Surcharge proposals, during this Financial Year, if they could assure 100% power supply to all subsidizing consumers, for at least four months consecutively”. Therefore sourcing the liberty given by the Hon’ble Commission the petitioners approached the APERC to review and revise the Order dt:13.8.2013. As such the grounds that are canvassed in the Review application are very much within the scope of permissible grounds under Order 47 Rule(1) Code of Civil Procedure. Hence the objection is not tenable.

4. It is respectfully submitted that this Hon’ble Commission after careful consideration of the points submitted in the public hearings and due consideration to various issues on supply side constrains, plights of OA users, Discoms inability to give assurance with regard to power supply during the remaining period of the financial year and their proposal to review the R&C measures after a period of one month, has passed the order. The order passed by the Commission is a well considered order and there is no error apparent on the face of record and it does not warrant any interference of this Hon’ble Commission by way of review.

When the commission made the tariff order providing different tariffs for different categories of consumers, it was with the intention of providing cross subsidy. That tariff order was made while R and C measures were very much in force and a deficit situation was prevailing. Now eliminating CSS on the grounds of deficit in power contradicts the earlier tariff order of the commission itself.

5. It is respectfully submitted that the petitioners have invented new pleas and raised additional grounds in the present review which are not raised at the time of passing of the order and hence, the review petition is not maintainable and is liable to be dismissed.

the commission has conducted a public hearing for ironing out the issue in the methodology of calculation of CSS but the commission took a decision to waive the CSS despite the EA-2003 providing for the same.

Page No.24/27


6. The review petition is presented on 20.09.2013 before the Hon’ble Commission seeking review of the orders dated 13.08.2013 is barred by limitation in as much as the same is beyond the period of 30 days prescribed under the Electricity Act, 2003 and no details have been furnished explaining the limitation.


7. In reply to the averments made in para-2 of the review petition, the petitioners have extracted the contents of para 37 of the order in review, as per which they have been given liberty to approach the Hon’ble Commission afresh on cross subsidy surcharge during present financial year in the event they assure 100% power supply to all subsidizing consumers at least for four months continuously. Admittedly, the present scenario is that the subsidized consumers are already suffering from power shortage and power cuts are being imposed by the petitioners officially and unofficially as well. Therefore, when the petitioners are unable to assure continuous power supply, they are precluded from claiming any cross subsidy surcharge. The liberty granted by the Hon’ble Commission is only in case they assure continuous power supply at least for four months, which as a matter of fact, the petitioners are incapable of doing so.

8. In reply to the averments made in para-3 of the review petition, it is submitted that but for mentioning that the Hon’ble Commission has omitted several vital aspects of the cross subsidy surcharge, have not furnished any specific details of the same and just by making bald averments, cannot seek review of the order.

9. In reply to the averments made in para-4 of the review petition, it is submitted that the allegation of petitioners that the proceedings have been concluded by the Hon’ble Commission in a hurried manner, in violation of principles of natural justice is totally devoid of any merit and as a matter of fact, the Hon’ble Commission has given sufficient time for filing objections to the proposals of the petitioners and thereafter reply by the petitioners and enough time during the public hearing. The petitioners never raised this issue before the Hon’ble Commission while it ha undertook the exercise of determination of cross subsidy.

APDISCOMs have put forth their submissions before Hon'ble APERC during public hearing and represented for determine Cross Subsidy Surcharge. Further When the commission made the tariff order providing different tariffs for different categories of consumers, it was with the intention of providing cross subsidy. That tariff order was made while R and C measures were very much in force and a deficit situation was prevailing. Now eliminating CSS contradicts the earlier tariff order of the commission itself.


Page No.25/27


10. In reply to the averments made in para-5 of the review petition, it is submitted that the Hon’ble Commission having considered the fact that the petitioners were unable to make available continuous power supply and as a matter of fact they have approached the Hon’ble Commission for imposing Restriction and Control measures during the present financial year, which the Hon’ble Commission favourably considered and issued orders from time to time imposing power restrictions, rightly has decided not to impose cross subsidy surcharge on the subsidized consumers. It is pertinent to mention here that even in the R&C orders issued by the Hon’ble Commission, it has been specified that no cross subsidy surcharge would be leviable on the consumers who avail power supply through open access.

Discoms cannot afford to give any relief to consumers in respect of cross subsidy even during R&C measures as the same would not be compensated. There is no provision for waiver of Cross Subsidy Surcharge in the Electricity Act 2003

11. The Hon’ble Commission further while determining cross subsidy surcharge for previous financial years has also specifically stipulated that the cross subsidy surcharge determined therein shall not be applicable if in case the petitioners are unable to supply power and impose power cuts with the permission of Hon’ble Commission. This condition has not been challenged by the petitioners and the same has become final. Therefore, supplying power continuously without any restrictions is sin-qua-non for claiming cross subsidy surcharge. Therefore, the allegation of the petitioners that the Hon’ble Commission has not considered the relevant material and data submitted by them while passing the order in review is totally misconceived.

12. In reply to the averments made in parsa-6 and 7 of the review petition, it is submitted that the grounds alleged are not within the scope of review and the petitioners have never raised the above said grounds either in the original proposals or during the hearing before the Hon’ble Commission. The petitioners are not entitled to levy cross subsidy surcharge as a matter of right and the same is not a tax on the consumers. There should be rationale and purpose and object that is sought to be achieved while determining and levying cross subsidy surcharge, and the same is not automatic unlike levy of tax. The Hon’ble Commission has rightly determined cross subsidy surcharge as “nil” as the subsidized category of consumers are already burdened with high tariffs. The reference to orders of Hon’ble Appellate Tribunal in appeal No. 32 of 2009 and appeal No.132 of 2011 are not relevant for present review petition and rendered in different facts and circumstances of the cases.

The Open Access Consumers are obligated to pay Cross Subsidy Surcharge as per Electricity Act.

13. In reply to the averments made in paras-8 to 16 of the review petition, it is respectfully submitted that the grounds raised therein are in substance attacking the findings recorded by the Hon’ble Commission and if the petitioners are aggrieved by these findings, especially those that are paras-33, 34, 36 and 37 of the order in review, they have a remedy of challenging those remedies under Sec.111 of the Electricity Act, 2003 but not by way of review under Sec.94 of the Act. The Hon’ble Commission has given enough reasons and recorded findings and therefore, these findings cannot be upset in review proceedings.

Regulation 2/99 Para 49 The Commission may on its own motion or on the application of any of the person or parties concerned, with in 90 days of the making of any decision, direction or order review such decision directions or orders and pass such appropriate orders as the Commission thinks fit.

Page No.26/27


14. The Hon’ble Commission in its order dated 13.08.2013 has given liberty to the petitioners to approach afresh however on the condition of they assuring continuous power supply at least for four months. Even assuming that the petitioners intend to utilize the liberty granted, they have to satisfy that they would assure continuous power supply and secondly they can only come up with a fresh petition and not by way of review. This objector seeks leave of the Hon’ble Commission to produce material evidence to show that the petitioners have been imposing power cuts to the various consumers. The objector further craves leave of this Hon’ble Commission to file additional objections, if any.

For the aforementioned reasons, it is prayed that this Hon’ble Court may be pleased to dismiss the review petition and pass such other order or orders as this Hon’ble Commission deems fit and proper in the circumstances of the case.


Page No.27/27

SOUTHERN POWER DISTRIBUTION COMPANY OF AP LIMITED

TIRUPATI

***

From To

The Chief General Manager

Operation,

APSPDCL

Tirupati.

Lr.No.CGM/Opn/APSPDCL/ RAC/F.Doc./D.No. 434 /13,dt.30-10-2013

Sir,

Sub: APSPDCL – RAC – Replies to objections/ suggestions on review petition on the

Honble Commission’s order dated 13.08.2013 on Determination of Cross

subsidy surcharge - Reg.

Ref: Objection/ Suggestion filed by you with Hon’ble APERC on review petition on the


subbsidy surcharge

***

We are in receipt of your suggestion/ objections on review petition on the Honble Commission’s

order dated 13.08.2013 on Determination of Cross subbsidy surcharge Determination of Cross Subsidy and

the same is herewith acknowledged with thanks. Para wise replies of APSPDCL are as follows:

Para No/Brief Issue APSPDCL Response

1. This reply is being filed on behalf of RPP Ltd, hereinafter

referred to as "Objector". The Objector is a generating

company operating a mini-hydel power plant. The Objector

had filed detailed and elaborate objections before the Hon'ble

Commission in the original proceedings.

2. The affidavit filed in support of the review petition states that

the deponent has been authorized to file the application on

behalf of APCPDCL. But the petition is signed by the same

person on behalf of all the other distribution-licensees also as

petitioners. It is wholly incompetent and there is a material

misjoinder of petitioners. The review petition is liable to be

rejected in limine for this reason alone.

Authorization was issued to APCPDCL

for filing Review petition on behalf of

all others DISCOMs

Due to unavoidable administrative

preoccupations, the DISCOMs could

not file the review petition with in 30

days as per law on cross subsidy

surcharge.

1. Sri Y.V.Subba Rao, Managing Director M/s RPP Ltd. H.No.1-B, Arora Colony, Road No.3, Banjara Hills,

Hyderabad 500 034.

2. Sri R.K.Agarwal, Hon. Chairman M/s Andhra Pradesh Spinning Mills Association 105, 1st Floor, Surya Towars, Sardar Patel Road, Secunderabad 500 003.

3. Sri N.Padma Rao, Executive Director M/s Jyoti Bio-Energy Ltd. Mayank Towers, # 6-3-090/B/1&2/401, 4th Floor, Raj Bhavan Raod, Hyderabad 500 082.


3. The order sought to be reviewed was passed on 13.08:2013.

The review petition appears to have been filed on 20,09.2013..

The petitioners are called upon to show how the review petition

is within the time of 30 days from the date of the order allowed

by the Limitation Act.

4. The review petition is not maintainable on any of the grounds

or contentions raised therein It is well settled law that a

review la no! permissible for a mere re-hearing or for re-

argument of the case The grounds permissible for they

review petition are very narrow in terms of Order 47 of the

Code of Civil Procedure. A review cannot be an appeal in

disguise. At best, the Petitioners can urge the grounds raised

in an appeal u/5111 of the Act; but certainly not in a review.

5. Save and except as may be specifically admitted herein, all

the averments, contentions and allegations of the petitioners

in the review petition are denied and disputed, and the

petitioners are put to strict proof of the same.

6. The contents and averments in paragraphs 1 and 2 are matters

of record and do not require traverse.

7. The contention and allegation in paragraph 3 that the

conclusion of the Hon'ble Commission is contrary to law and

also the result of omission of several vital aspects is

erroneous and misconceived A review is not maintainable on

the ground that the order and/or conclusion is contrary to law

8. The contention in paragraph 4 of violation of the principles

of natural justice is insincere and a mere afterthought. The

petitioners have merely alleged that Ihe approach of the

Hon'ble Commission was "apparently* hurried, It is a mere

ruse (o seek a re-argument and re-hearing in a manner

impermissible in law. Tnis does not afford any ground of

review

The Hon’ble Commission has wide

power to condone the delay and extend

any specified period under clause 59 of

APERC conduct of Business Regulation

1999.

9. The contentions and averments in paragraphs 5 to 6 are legal

arguments on the merits of the case and the reasons for Ihe

decision. They cannot be grounds for review of (he order

Nevertheless, and without prejudice to the above, it is

submitted that the petitioners' contention that the justification

for the conclusion in the order is alien to law, and that the

order under review suffers from consideration of extraneous

material and non-consideration of relevant material is

erroneous and misconceived, in any case this cannot be


lawfully urged in a review petition,

The operation of the judgment of the Appellate Tribunal in

Appeal No 32 of 2009 has been stayed by the Hon'ble

Supreme Court by order dated 2.8.2010 in C.A No. 5663 of

2010; and therefore no reliance can be placed on the said

judgment.

The judgment of the Appellate Tribunal in Appeal No 132 of

2011 dated 21.12.2012 is irrelevant as the issue in that case

was whether a consumer connected to one distribution

licensee In its area o- supply is liable for cross subsidy

surcharge when such consumer sources electricity from

another distribution licensee ,for (tie same / overlapping area

of supply when such electricity is wheeled to such consumer

through the lines of the former distribution licensee. It is a

completely different fad situation and legal issue

The contentions in paragraph 8 are confused, confusing and

misconceived. Of course, the distribution licensee has an

universal obligation to supply and maintain supply

continuously. But, when the facts show that the situation is

such that the distribution licensees are unable to ensure and

assure continuous supply and the Hon'ble Commission has /

will place restrictions on the consumers' drawal of electricity

from the distribution licensee, there is no question of any toss

of cross subsidy element from the energy not permitted to be

drawn from them. In any case, such arguments and

contentions are beyond the scope of a review petition.

10.With regard to the averments in paragraph 8. It is not

understandable what is meant by "there is absolutely no

difficulty" The liberty given by this Hon'ble Commission Is

lo file a fresh application if and when, the distribution

licensees are able lo assure 100% power supply for at least

four months consecutively. No liberty was given, and/or

could have been given, for a review petition. The contention

of the petitioners is wholly misconceived.

Without prejudice to the above objection, the petitioners'

averments even hi this petition are vague and non-specific.

They simply say they will make all-out efforts to provide

continuous supply. They do not assure continuous supply

They do not specifically say and assure that continuous

supply will be given for the next four months. They do not

spell out the sources of supply and the costs associated with

such intention. There is no assurance that they will not resort

to imprudent and reckless power purchases at exorbitant cost

and then seek lo pass these costs through to the consumers by


way of true-up or such other means It is wholly insincere.

In any case, such contentions are no ground For review

11.With regard lo paragraphs 11 and 12. there Is no whisper or

explanation as lo how the finding of the Hon'ble Commission

that them would be no loss of cross subsidy on account of

exemption during R&C measures Is factually or logically

wrong, it is a mere paid statement without particulars and/or

reason or logic. There is no whisper as to how ft is contrary

to trie Act. There is no factual information or details to show

or substantiate that aj[ HT consumers subjected to R&C

measures have availed open

In any case, such contentions are no grounds for review

12.The contentions and arguments in paragraph 13 are beyond

the scope of review The Hon'ble Commission has dealt with

the issue in detail in the order and reasons have been given

If the Petitioners are aggrieved thereby, they may only prefer

an appeal: but there can be no review of the order of the

Hon'ble Commission on such grounds or contentions.

13.The contention that the order under review is detrimental to

the Petitioners as stated in paragraph 14. and that the

Discoms cannot afford to give any relief to consumers even

during R&C periods are erroneous and misconceived; and In

any case they are not permissible grounds for review,

The R&C orders of the Commission provided for not levying

any cross subsidy surcharges during the R&C periods That

was accepted by the petitioners and not challenged by them.

It has become final and binding on the petitioners. It has been

implemented accordingly The Petitioners cannot now raise

the Issue of levy of surcharge during R&C periods in. or by

way of, this review petition or otherwise

14.The contention in paragraph 14 that the Hon'ble Commission

has wide powers to review the orders passed by it is incorrect

and misconceived. The powers conferred upon the Hon'ble

Commission u/s 94(f) are expressly those as are vested in a

civil court under the CPC. The power u/s 1U CPC and Order

47 CPC circumscribe and limit the power of review. It is a

very limited power The Petitioners have not contended

and/or brought any new matter or evidence which were either

not within their knowledge or could not be produced at the

time the order was made. There is no error apparent on face

of (he record. There are no other sufficient reasons analogous

to the foregoing. No review is therefore maintainable at all.


15.As stated supra, the contention in paragraph 16 that the

Hon'ble Commission gave liberty in para 37 of the order

is wholly erroneous, willfully misleading and

misconceived. Liberty was given to approach afresh upon

the conditions imposed there for. No review petition is

maintainable or can be entertained on the ptea of alleged

liberty

16.It is submitted that the question of maintainability of the

review petition requires to be decided as a preliminary issue.

The review petition is liable to be rejected as not

maintainable In the unlikely event of the review being

granted, apart from the recourse and remedy of such order

granting review, the matter will have to be reheard also on

several of the other objections taken by objectors in the

original proceedings after providing such information and

clarifications that were sought in the original proceedings

and/or may be sought thereafter.

17. It is therefore prayed that the review petition be rejected and

dismissed.

The matter is in the purview of

Hon’ble Commission.

Further, it is to inform that Hon’ble APERC will be conducting Public Hearing at Court Hall of the

Commission on 01-11-2013 (Friday) from 11-00 am.

Yours faithfully,

Chief General Manager

Operation

APSPDCL::TIRUPATI

ADE/RAC DE/RAC GM/RAC

Copy submitted to the Secretary/ APERC/ Hyderabad

Submitted for perusal :

Director / Operation :

Chairman & Managing Director :


TIRUPATI

***

From To


Operation,

APSPDCL

Tirupati.


Sir,






subsidy surcharge

***

We are in receipt of your suggestion/ objections on review petition on the Honble Commission’s

order dated 13.08.2013 on Determination of Cross subbsidy surcharge Determination of Cross Subsidy

and the same is herewith acknowledged with thanks. Para wise replies of APSPDCL are as follows:


1) HT Consumer of DISCOMS those who are meeting

their power requirement partially from DISCOMS and

balance from their own Captive Power Plants at

some other location and having Power Wheeling

Agreements with AP Transco / DISCOMS our

wheeling of captive power may be permitted to

take Open Access (NOQ every month for purchase

of shortfall power from Power Exchange / Other

Source in the event of unforeseen breakdowns In their

captive power plants or shortage of fuel till the

restoration of their Captive Power Plants to Normal

Operation.

DISCOMs have the obligation to supply

electricity to subsidizing consumers as per

the Tariff Order. W hen full power is

available and cross subsidy surcharge is not

collected from the subsidizing consumers

then the anticipated cross subsidy in the

Tariff Order can not be realized and there will

be loss of cross subsidy revenue for the

DISCOM. Even during the period of short

supply when R&C measures are in

operation to the extent that power is

supplied to subsidized consumers the

resulting cross subsidy need to be

recovered. If there is under recovery due to

waiver the DISCOMs have to bear the loss.

2) In order to gain political advantage State Government is

Directing Licencees (DISCOMS) to provide free Power

to Agriculture Sector and also the power utilized by the

subsidized Sectors like Agriculture and Domestic

Utilities, lack separate feeders and hence there Is an

ambiguity In billing of actual energy consumed by

them desperation subsidized Power Burden,

Unmetered and Unbilled Energy is being levied from

the Industrial and Commercial Categories of

Providing relief during shortage period and it

is a different thing to apply the shortage

period conditions to the period of full

availability. These two situations shall be

distinguished clearly and treated differently.

The Commission observed “ the Licensees

are having obligation to supply of electricity

to the consumers and when that obligation is

not met, justice can be extended only

M/s The Andhra Sugars Ltd.

Chemicals & Fertilisers Division,

Kovvur 534 350.


consumers by tariff i.e. more than Rs.6.00/KVAH.

On this context Hon’ble APERC may note that levy

of cross subsidy charges on purchase of Open

Access Power will entail additional burden on the

Industries and thus cripple the industrial sector.

Industries are not in a position to compete in the

global market for their products, as power cost in other

countries Is far less than our tariff. In view of high

cost of power some industries are closed.

through allowing the consumers to source

the power under open access without any

surcharge”.

3) It is to be noted by the Hon’ble Commission that,

Cross Subsidy Charges being levied are more than Rs.

2.00 per KVAH, which is almost 50% of generation

cost According to the National Electricity Policy

(NEP) and National Tariff Policy (NTP) the Cross

Subsidy Surcharge should not be so onerous, that It

becomes difficult for consumers to procure

Competitive Power from the market. As per Electricity

Act -2003, electricity consumers shall be allowed to

opt the source of power in the Competitive Open

Market with nominal cross subsidy for the

development of Power Sector and Industries In the

Country.

Therefore levy of Cross Subsidy at extremely higher

rates i.e. more than Rs. 2.00 per KVAH is considered

irrational and illegal. Hence, it shall be limited to less

than Rs. 1.00 per KVAH for power intensive bulk

consumers such as Caustic Soda, Ferro Alloys and

other continuous process Electrolysis plant for whom

power is one of the Raw Materials.

It is under purview of Hon’ble APERC.

4) If the DISCOMS allow the consumers to source their

power from the Open Market then the DISCOMS

would actually avoid purchasing of Power from

expensive sources for such quantum of electricity. The

DISCOMS can make available such fall back energy

to other vital sectors reeling under shortages or

consumers willing to procure Costly Power.

Under these Circumstances, the levy of Cross Subsidy

Surcharge in the prevailing uncertainty as seen in the

recent past of power position, seems to be

preposterous.

5) If Cross Subsidy Charges are reduced then eligible

customers will get the choice to choose supply

sources. It is asserted that benefits of Open Access

Power Purchase Policy may not be realized

completely, unless cross subsidy is phased out.

According to the National Electricity Policy ft is awful

to levy onerous cross subsidy surcharge on the

consumers as ft may hamper the opportunities for

Competitive Power Market.

Since cross subsidy as being charged by DISCOMS


appear to be a constraint towards development of a

competitive power market, it is Important to phase out

Cross-Subsidy in line with the guidelines of the

National Electricity Policy (NEP) and National Tariff

Policy (NTP).

Therefore considering the aforesaid In to record, it is

prayed to the Hon'bte APERC to refrain the

DISCOMS from levying of Cross Subsidy Surcharge

for Power Purchased through Open Access.

Further, it is to inform that Hon’ble APERC will be conducting Public Hearing at Court Hall of

the Commission on 01-11-2013 (Friday) from 11-00 am

Yours faithfully,


Operation

APSPDCL::TIRUPATI



TIRUPATI

***

From To


Operation,

APSPDCL

Tirupati.


Sir,






subbsidy surcharge

***

We are in receipt of your suggestion/ objections on review petition on the Honble

Commission’s order dated 13.08.2013 on Determination of Cross subsidy surcharge

Determination of Cross Subsidy and the same is herewith acknowledged with thanks. Para wise

replies of APSPDCL are as follows:


Our self we are introducing to you that, R.A.K. Ceramics India Pvt.

Ltd , is located at IDA Peddapuram, ADB Road Samalkot, East

Godavari District in A.P. State. We have power grid connected with

A.P. Transco/A,P.E.P.D.C.L. vide consumer Ref.No.HT RJY-590.

We have been drawing power since 2006 1.88 MVA allotted for us

from A.P Power Grid. We are one of the highest power

consumer In East Godavari District.

In a positive development in Aug'13, the APE.RC had ordered "No

Cross Subsidy Surcharge (CSS) and No additional Surcharge for FY

2013- 14. Now the present Industry scenario is not up to the mark

due to NOD allocation of Natural Gas and severe Impact on the

Industry. Whereas our industry is already facing throat - cut

competition in India and we are facing hardship with liquidity crunch.

Kind Information

Up to July’13, Discoms were unable to supply the required power

to the industry and the Commission has also imposed the R&C

measures. During which period due to the insufficient power

supply from the Discoms we were forced to source the shortfall of

energy from other sources at a very high cost- in fact, the Industry

should be protected from this additional burden.

� Additional cost incurred on open access power from April -

Juty'13 was approx Rs.1.5 Crores.

� Additional cost of proposed cross subsidy will be approx.

another Rs. 1.5 Crores (from April-July’13)

Under the purview of the Hon’ble

Commission.

Sri P.G.Raj Mohan,

Asst. General manager - P.R.,

M/s R.A.K.Ceramics India Pvt. Ltd.,

P.B.No.11, IDA Peddapuram, ADB Road,

Samalkot, Eat Godawari Dist. 533 440.


It will be a very huge and unbearable loss to the Industry.

Our Humble Request

Hence, our humble request to the Hohn’ble Commission that, kindly

consider and review about the Cross Subsidy as well as additional

Surcharge FY 2013-14 and attention to lift the same and to avoid the

additional cost burden on industries.

Look forward for your kind co-operation and favourable action in this

regard and we trust you would kindly appreciate and would accede to

our humble request.

Further, it is to inform that Hon’ble APERC will be conducting Public Hearing at Court

Hall of the Commission on 01-11-2013 (Friday) from 11-00 am

Yours faithfully,


Operation

APSPDCL::TIRUPATI


Documents

INDEX [] · Objector Objection Discom Reply 1. This reply is being filed on behalf of RPP Ltd, hereinafter referred to as "Objector". The Objector is a generating company operating