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A shocker of an order for KSEB

K.A. Martin
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Appellate Tribunal asks board to refund Rs 15 crore collected from HT users without sanction of a law

KSEB introduced service connection charge on October 1, 1998 to recover what the board claimed was a portion of the cost on the back-end system, meaning additional cost on generation, transmission and distribution.— File photo
KSEB introduced service connection charge on October 1, 1998 to recover what the board claimed was a portion of the cost on the back-end system, meaning additional cost on generation, transmission and distribution.— File photo

The Appellate Tribunal for Electricity has set aside an order by Kerala State Electricity Regulatory Commission (KSERC) and ordered Kerala State Electricity Board to refund service connection charges, totalling roughly less than Rs. 15 crore, collected from high tension and extra high tension electricity consumers between March 2, 2005 and September 8, 2010.

The board has been ordered to refund the service connection charges “unauthorisedly collected by them from the high tension and extra high tension electricity consumers” with a simple interest at the rate of 10 per cent a year from the date of collection of the charges till the date of refund.

The July 3 judgement was passed by tribunal chairperson Justice M. Karpaga Vinayagam and technical member Rakesh Nath in an appeal by The Kerala High Tension and Extra High Tension Industrial Electricity Consumers’ Association against the KSERC ruling on April 30, 2012.

KSERC had ruled that though the electricity board collecting service connection charges from consumers after Kerala Electricity Supply Code came into effect on March 3, 2005 was not keeping with the law, but the money need not be refunded as the amount was integrated into the annual accounts of the board for the period.

The Regulatory Commission was of the opinion that the aggregate revenue requirement (ARR) and expected revenue from charges (ERC) for the period when service connection charges were levied and the truing up of accounts up to 2008-09 had been done and deficits and surpluses arrived at and included in the income from the service connection charge.

However, the Appellate Tribunal ruled that the grounds on which the refund was denied were not tenable. “Finalization of ARR & ERC and true up could not be a reason for not allowing the refund,” the judgement said.

The tribunal pointed out that the KSERC ruled on September 9, 2010 that the collection of service charge was illegal and decided to take up the issue of refund in a separate proceeding. The proceeding was, however, taken up only after a lapse of time on April 30, 2012. “In the meantime if the accounts have been trued up by the State Commission, the appellants could not be penalised by denying the refund which is due to them,” said the judgement.

Service charge is imposed when a consumer asks for a new connection or when a consumer asks for additional power supply on account of the need for increased connected load.

KSEB introduced service connection charge on October 1, 1998 to recover what the board claimed was a portion of the cost on the back-end system, meaning additional cost on generation, transmission and distribution on account of the increased demand.

However, Electricity Act 2003 does not allow any collection of money from consumers other than what is provided for in the Act. The demand for any money by the board from the consumer “should be traceable to a provision either in a contract or a statute. There is no provision of Service Connection Charges either under Electricity Act, 2003 or in any provision of power supply agreement or any order or Regulation of the Commission,” the Regulatory Commission’s April 2012 verdict had said.

A spokesman for The Kerala High Tension and Extra High Tension Industrial Electricity Consumers’ Association said the contract demand for electricity from HT and EHT consumers between 2005-2006 and 2010-11 increased from 1,014.86 MVA to 1,335.25 MVA and put the amount due to industries at less than Rs. 15 crore.

He described the judgment as a victory for consumers, who could now get their grievances on electricity supply issues redressed through a proper procedure.

An individual industrialist had taken up the service connection charge issue with the Kerala Electricity Ombudsman but was directed to approach the Regulatory Commission. It was then decided that the association would pursue the matter.


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