Court strikes down DERC tariff slash order

Regulator to determine electricity rates afresh by "staying within it's statutory limit"


Deevakar Anand | May 23, 2011

The Delhi high court has disposed of a petition that demanded implementation of the tariff order passed by the Delhi Electricity Regulatory Commission (DERC) last year.

Commission chairman Berjinder Singh had ordered to slash the rates noting that the three power distribution companies (discoms) operating in Delhi – BSES Rajdhani, BSES Yamuna and NDPL - reportedly had a surplus of Rs 3,577 crore. The petitioner, Nand Kishore Garg, alleged that the same was stalled by a Delhi government order asking DERC to follow the National Tariff Policy and withdraw its order.

The division bench of chief justice Dipak Mishra and justice Sanjiv Khanna has asked DERC to proceed afresh by following the due process under the Electricity Act, 2003. The bench came down heavily on the regulator for not keeping within the statutory role ascribed to it. “The commission shall be alive to the role conferred on it by the 2003 Act,” noted the order. "The commission under the 2003 Act is required to deal with the aspect of tariff determination with intellectual integrity, transparent functionalism and normative objectivity and not act in a manner by which its functioning invite doubt with regard to its credibility,” it added.

While showing its displeasure and dissatisfaction on the manner DERC went about determining the slashed tariff, the judges held the Delhi government responsible for such a chaos in the commission by “unjustifiably intruding and encroaching on the functions of the commission by interdicting” as in the case. It pulled up the government for traversing its own powers by restraining the commission in the manner it has done and said it was “not in the fitness of things”.

It also reprimanded the discoms calling it “unwarranted” the manner in which they went to the government asking it to interference at a stage when the regulatory body was proceeding with the determination of the tariff. “The discoms should have been well advised not to curb the determination process by the regulatory commission,“ said the order. “A distribution company is not an illiterate litigant who seeks redressal of his grievances at any stage and before whichever forum. They are guided by their law officers and are expected to know how to conduct themselves,” the bench fumed.

While the regulator has been asked to formulate the tariff order with due diligence, the same can be appealed under section 111 of the 2003 Act.



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