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Power tribunal APTEL issues show cause notice to Karnataka Electricity Regulatory Commission

Our Bureau New Delhi | Updated on October 08, 2020

Demands explanation for denying ‘carrying cost’ benefits of 12% on the additional power purchase cost of ₹545.87 crore was unjustly denied to KPTCL

The Appellate Tribunal for Electricity (APTEL) has taken a stern position against the Chairperson and Members of the Karnataka Electricity Regulatory Commission.

APTEL has given the KERC Chairperson and Members four weeks to explain why contempt action should not be initiated against them for wilful defiance and disobedience.

Sector watchers say that this is the first time that APTEL has taken such a view and issued a show cause notice to a regulator. These observations were made in the matter of Karnataka Power Transmission Corporation Limited (KPTCL) vs. Karnataka Electricity Regulatory Commission.

APTEL said that the order passed by the KERC on January 16 this year was unreasonably, improperly and illegally carried out. It ruled that the full benefit of ‘carrying cost’ of 12 per cent on the additional power purchase cost of ₹545.87 crore was unjustly denied to KPTCL.

The appellate tribunal has made these observations in its order dated October 5.

The APTEL order said, “A claim of the procurer (KPTCL), staked in 2002, for the ‘carrying cost’ in relation to additional power purchase expenditure incurred in terms of arbitral decision and directed to be allowed as ‘pass through’ has not been permitted to attain closure till date notwithstanding several rounds of proceedings before the electricity regulatory commission and at least three rounds of appellate scrutiny endorsing the said claim.”

“More than the extraordinary delay that has occurred in the fruits of the judicial process reaching the hands of the party whose claim was upheld, the cause of concern arising from the present appeal is the recalcitrant attitude of the regulatory authority in abiding by hierarchical judicial discipline,” the order noted.

According to the APTEL order, KPTCL was allowed to recover the additional expenses in the form of carrying costs for incremental power generation from the Tanir Bhavi Power Project. But despite such directives being given long back, the KERC kept denying this benefit to the KPTCL citing various concerns.

“We call upon the Chairperson and Members of the Karnataka Electricity Regulatory Commission who rendered the impugned decision dated January 16, 2020 to show cause within four weeks hereof as to why contempt action be not initiated against them for wilful defiance and disobedience,” APTEL said.

Published on October 08, 2020

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