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A recent case before the Chhattisgarh Electricity Regulatory Commission (CGERC) has brought attention to important issues concerning transmission losses, operation and maintenance (O&M) expenses, and tariff determination for the Chhattisgarh State Power Transmission Company Ltd. This case was reopened following directions from the Appellate Tribunal dated May 29, 2015. The dispute involves the company’s claims for transmission losses and O&M expenses for the financial years 2011-12 and 2012-13, as well as the transmission tariff for the financial year 2014-15.Earlier, the Petitioner had challenged the Commission’s Tariff Order issued on June 12, 2014. The main concerns raised were twofold. First, although the Commission recognized that the transmission losses reported by the company were based on actual meter readings, it refused to grant the company its rightful share of one-third of the gains from reduced transmission losses. The Commission’s refusal was based on reasons that the data was “inappropriate” and that bus losses were excluded in calculating transmission losses for the control period of 2010-11 to 2012-13. Second, the Commission had approved the O&M expenses for the years 2011-12 and 2012-13, which had decreased significantly, leading to substantial savings. However, the company was again denied its statutory share of one-third of these gains, with the Commission justifying this on the grounds of protecting consumer interests. The Appellate Tribunal’s order of May 29, 2015, overturned the Commission’s decisions regarding both O&M expenses and transmission losses. The Tribunal sent the matter back to the CGERC with clear instructions. For transmission losses, the company was asked to submit data in a specific format and to work with the Commission to resolve any difficulties in providing this data. For O&M expenses, the Tribunal directed the Commission to hold a fresh hearing where the company could respond to written submissions and provide further clarifications. Importantly, the Tribunal did not make any judgment on the merits of the case but emphasized that the Commission should address both issues independently, following legal requirements and issuing a detailed reasoned order. In line with these directions, new proceedings have been launched. The company has submitted its reply related to transmission losses and O&M expenses after receiving a notice from the Commission on October 15, 2015. The Multi Year Tariff (MYT) Regulations of 2010 govern these proceedings. These regulations define efficiency-linked controllable items such as O&M costs and transmission losses. They also specify a profit-sharing mechanism for gains achieved by better performance than targets. According to this, one-third of the net gain from improved efficiency should be retained by the generating company or licensee. Another one-third should be passed on to consumers as a rebate, and the remaining one-third credited to a tariff stabilization fund. The company argues that by denying it the statutory share of these gains, the Commission violated the MYT Regulations. The original tariff orders had clearly set benchmarks for transmission losses and normative O&M expenses based on these regulations. The company’s performance and its claim for gains are being assessed against these benchmarks. The case highlights the ongoing challenges in balancing the interests of power companies and consumers while ensuring fair tariff determination based on regulatory standards. The final decision by the Commission, after reconsidering the evidence and submissions, will be closely watched by stakeholders in the power sector. |
