Between

M/s. Madras Cements Ltd.,

Kumara Swamy, Raja Nagar,

Jaggayapet Taluk,

Krishna District.

(Represented by Senior Manager, Electrical) ...…. Appellant

and

1. The Director (Comml. & Proj), APSPDCL,

Tirupati

2. The Superintending Engineer (Operation), APSPDCL

Vijayawada

3. The Chief Engineer (O & M), APSPDCL,

Vijayawada

..….. Respondents

This is an appeal dt. 28-12-05 filed by M/s. Madras Cements Ltd., a HT consumer (hereinafter called the appellant or appellant consumer) coming up for hearing by Vidyut Ombudsman pursuant to an order of the Forum for redressal of grievances of consumers of SPDCL, Tirupati (hereinafter called the FORUM) dt. 13-12-05 in C.G.No.35 of 2005, and having stood over till this day the Ombudsman issues the following:

ORDER

2. This appeal dated 28-12-05 is received in the office of the Ombudsman on 30-12-05. The brief facts of this matter are as follows:

The appellant consumer M/s. Madras Cements availed power supply from the erstwhile APSEB at 132kV for a contracted demand of 16500 kVA, which was reported to have been released in 3 stages; 2000 kVA on 24-12-85, 12,000 kVA, on 24-10-86, and another 2500 kVA (total 16.5 MVA) on 22-9-87, for their cement factory at Jaggayapet,, Krishna Dist. They paid all the required charges in December 1985 for release of supply as per APSEB Rules & Regulations. They have gone for dedicated line at their cost in 1995 from Chillakallu Sub-Station (near Jaggayapet,) due to disturbances in the 132 kV common feeder. In June 1998, they have de-rated their contracted demand from 16,500 kVA to 7500 kVA. Later due to increase in the operating cost of captive power plant, they requested the SPDCL in September 2005 for release of additional demand of 5200 KVA over the existing demand of 7500 KVA. The appellant also requested SPDCL in Lr. dated 25-9-05 to waive the Development charges, as no additional expenditure is involved for release of the additional demand. The respondent SPDCL did not agree for this request as the consumer did not pay the Development charges even at the time of release of supply in 1985 and requested the consumer in Lr. dated 27-9-05 to pay the Development charges for release of supply for the additional demand. The consumer paid Rs.39 lakhs towards development charges and availed supply for the additional demand of 5200 kVA on 10-10-05. After availing the supply for the additional demand, duly paying the development charges as insisted by the SPDCL, the appellant consumer approached the grievance cell of SPDCL (Forum) in letter dated 22-11-05 with a request to consider waival of Development charges of Rs.39 lakhs paid by them and adjust in future CC bills. The Forum of SPDCL in its order dated13-12-05 held that the collection of the Development charges by SPDCL is in order.

3. In the appeal dated 28-12-05, the appellant mainly raised the following contentions:

(i) All charges payable as per the APSEB rules and regulations were paid before release of supply in 1985.

(ii) The restoration of the Demand of 5200 KVA was done on existing available infrastructure without any expenditure.

(iii) The Order dated 13-12-05 of FORUM contains a reference to communication of APPCC dt.16-11-05, which states that those industrial consumers who want to restore their earlier derated Contracted Maximum Demand (CMD), do not require to pay development charges as infrastructure to meet their earlier CMD had already been created. Though they requested SPDCL by 25-9-05, their request was not considered in the above order of APPCC.

The appellant requested for waival of the Development charges on the above grounds.

4. In the counter filed by the respondent SPDCL i.e., SE/Opn/VJA in his Lr. dated 30-1-06 and Dir (projects) in his Lr. dt. 27-01-06, the following points are made:

(i) The APTRANSCO order TOO (Comml.) Ms. No. 52 dt 29-05-2001, which provides for waival of Development charges for restoration of earlier derated demand, is applicable only for those who paid development charges earlier.

(ii) The appellant had not paid development charges at the time of release of supply in 1985 and hence they are not entitled for the relief provided in TOO (Comml.) Ms. No. 52 dtd: 29-5-01.

(iii) The appellant paid the Development charges for the additional demand of 5200 KVA now requisitioned, prior to the APPCC Order dated 15-11-05 and hence this exemption does not apply to the appellant consumer.

(iv) SPDCL feels that waival of development charges is not a grievance as per citizen charter to represent to grievance cell.

(v) The contention of the appellant that the additional demand was released on the existing infrastructure without any expenditure is not correct as several improvement works were taken up to afford quality of power to all the consumers.

(vi) The SE/O/VJA, the second respondent, has furnished in his counter dated 30-01-06, the list of development works executed in and around Chillakallu substation where the additional demand is incident.

Relying on the above grounds, the respondent SPDCL refused to refund the Development Charges already paid by the appellant consumer for the additional demand of 5200 kVA released on 10-10-05.

5. In view of the above facts on record and rival contentions of the parties here in, the points for consideration are:

(a) Whether the appellant is required to pay development charges for the additional demand of 5200 kVA requisitioned in September 2005?

(b) Whether the appellant is entitled for refund of the development charges of Rs.39 lakhs paid on 10-10-05, in view of the APPCC letter dt.16-11-05?

6. As required under clause 8(1) (c) of the APERC Regulation No.1 of 2004, the parties here in were advised by the notice dated 03-01-06, to reach a mutually acceptable settlement and submit the document of settlement reached if any to the Ombudsman in person in the meeting convened on 23-01-05. The representative of appellant appeared before the Ombudsman on 23-01-05 and informed that no settlement was reached. No representative of the respondent SPDCL appeared on 23-01-05. Later the respondent No.1 and 2 filed counters in compliance with the notice dated 03-01-06. The Ombudsman heard the parties here in on 27-03-06. Sri K.Veerabhadra Rao, Senior Manager Electrical, represented the appellant while Sri B.Suri Babu, DE (Commercial) SPDCL represented the respondents, during the hearing.

7. The rival contentions are examined here under:

The appellant consumer merely sought waival of development charges on the sole ground that no additional expenditure is involved in release of the additional demand and that all the required charges for release of supply for a demand of 16,500 kVA were already paid in 1985 as per APSEB rules and regulations. The appellant consumer did not quote the T.O.O Ms. No. 52 dated 29-05-01 of APTRANSCO either in his letter dt. 25-9-05 addressed to MD/SPDCL or in his letter dt. 22-11-05 addressed to the Secretary of consumer Grievance Cell (FORUM) of SPDCL. In this appeal the appellant merely quoted the relevant extract from the Order dt 13-12-05 of the Forum of SPDCL containing reference to the Lr. dt. 16-11-05 of APPCC.

The respondent SPDCL quoted the provisions of TOO Ms. No. 52 dt. 29-5-01and the APPCC letter dated 16-11-05 in its counter before the FORUM. The respondent SPDCL relied on the interpretation of TOO No. 52 dated 29-5-01 and APPCC lr. dated 16-11-05 even in its counter on this appeal. Sri B.Suri Babu, the DE (Commercial), SPDCL produced a copy of the lr dt. 26-02-05, from Director (Projects), SPDCL addressed to CGM (Comml & RAC), CPDCL where in the decision of SPDCL to collect Development charges in respect of consumers who have not earlier paid the same, was informed to CPDCL.

The proper course of examining this matter would, perhaps, be from the view point of the enabling power or authority of the respondent SPDCL to collect the Development charges in September 2005 when the appellant sought release of additional demand. When this question of the authority for collection of Development charges was put to Sri B.Suri Babu representative of SPDCL, during the hearing held on 27-03-06, he said the authority was the Order dt. 24-08-05 of the APERC on the collection of development charges communicated to the DISCOMs the in the Lr. dated 29-8-05 of the Secretary, APERC. He said that the development charges were collected @ Rs 750 KVA as per Annexure II to the said Order of the APERC. I have gone through the said Order of the Hon’ble Commission. The provisions of TOO Ms. No. 52 dt. 29-05-01 was not a matter for consideration and was not dealt in the said proceedings. In the absence of any proposals by the Licensees in the above proceedings and no decision of the Hon’ble Commission thereon, it is difficult to infer whether the earlier order of TRANSCO i.e. T.O.O. Ms. No. 52 dt. 29-05-01 has any statutory or Regulatory sanction for enforcement. Hence I am not inclined to interpret the provisions of either TOO Ms. No. 52 dated 29-05-01 or APPCC Lr dt. 16-11-05. Suffice to say that I am convinced with the reply of Sri B.Suri Babu, the representative of the respondent SPDCL during the hearing held on 27-3-06, that the SPDCL collected the development charges at the rates mentioned in the Annexure II of the Commission’s Order dt.24-08-05 and accordingly I hold that the SPDCL is entitled to collect development charges from the appellant for the additional demand of 5200 kVA released in October 2005.

Regarding the nature of complaints to be represented to the FORUM, I am unable to agree with the contention of Director (Projects), SPDCL that waival of Development charges is not a grievance as per citizen charter to represent to the grievance cell. It is made clear that any consumer is entitled to approach the FORUM on any grievance, not necessarily listed in the citizens charter and the FORUM is expected to handle the complaints in accordance with the provisions under sub-clauses 7 to 11 of clause 5 of the APERC regulation No.1 of 2004.

Having referred to the order dt. 24-08-05 of the Hon’ble Commission, I also advise the respondent SPDCL to file relevant data as directed in para 14 of the said order if not already done, to facilitate issue of fresh regulation by the Hon’ble Commission in the matter of recovery of expenses by Distribution Licensees u/s 46 of the Act towards providing electric line / electrical plant for giving supply pursuant to application u/s 43 of the Electricity Act 2003.

This order is signed and issued on 29^th day of March, 2006

Between

ORDER

OMBUDSMAN