CASE NO. 6 of 1999

Present:
Shri S. C. Mahalik, Chairman
Shri A. R. Mohanty, Member
Shri D. K. Roy, Member

For Petitioners:
Shri Debabrata Jena, Joint Secretary, FOCO

For Affected Party:
1) B.M.M. Rao, Director (Dist.)
2) Shri B.P. Rekhani, General Manager (RAU), GRIDCO.

Date of argument: 05.03.99

Date of Order : 30.03.99

An application under Section 31(1) of the Orissa Electricity Reform Act, 1995 has been filed by the Federation of Consumer Organisations, Budhanagar, Kalpana Square, Bhubaneswar through its Joint Secretary, challenging the legality of a circular issued by the Director(Distribution), Gridco on the billing of consumers. In the impugned circular letter addressed to all the Managing Directors of the Distribution Zones the said Director (Distribution) has instructed that bills be raised on load factor basis in a situation of "house locked". It is alleged that the said instructions of the Director (Distribution) purposefully violates the Commission's order dt.21.11.98 relating to Retail Tariff effective from 01.12.98. It has been prayed that Gridco should be restrained from presentation of illegal bills on the basis of the aforesaid circular letter.

It is further alleged that Director (Distribution) revised the said instruction later vide his letter No.917(4)/D(D)/dated 11.12.98 whereunder the Managing Directors of the Distribution Zone were asked to raise bills on the consumers on the basis of meter readings of the preceding three months if the house was found locked with a further direction that if such meter readings were not available, the bills could be raised on load factor basis provisionally, to be revised when meter reading would become available.

The complainant has requested that since two allegedly illegal instructions have been issued by the Director (Dist.), Gridco be penalised u/s 31(1) of the OER Act,1995 for willful violation of the Commission's tariff order made effective from 1.12.98. It is prayed that the load factor be revised downwards as the Gridco is utilising the method of load factor billing to enhance their energy sales and to present an artificial reduction of Transmission & Distribution losses.

2. The Commission issued a Fax message to M/s Gridco. vide its letter No. Secy/053/98/164 dt. 15.01.99 to obtain a report within 10 days as to under what circumstances the instruction under its letter dated 11.12.98 was issued to the Managing Director's of the four Distribution Zones.

2.1 M/s Gridco filed a report vide its letter No.Com-VIII- 12/97(V.3)/27/D(D)/dated 23.1.99 which is as follows :

The circumstances leading to the issue of Gridco Circular No.917(4)D(D) dated 11.12.98 are summarised below :

1. The mode of preparing bills in the event the meter is not accessible and hence cannot be read is dealt with in Regulation 17 of OSEB (General Conditions of Supply) Regulations 1995 which is as follows :
   
   "If for any reason whatsoever, the consumer's premises containing the meter is not accessible and meter reading cannot be taken, the bills shall be raised on the basis of minimum charge subject to subsequent verification and revision on the basis of actual meter reading.
   
   If the Engineer apprehends that the consumer is deliberately avoiding the inspection of meter and meter reading, he may give notice by registered post to the consumer to remain present in the premises on the date and time as mentioned in the notice and if the consumer defaults he may take steps for disconnection of supply after giving appropriate notice to the consumer and considering his explanation, if any".
   
   However, the Commission in their Retail Tariff Order dated 21.11.98 did away with the concept of minimum energy charges (as used in Regulation 17) and hence Regulation 17 became inoperative from 01.12.98.

2. Regulation 63 of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 1998 approved by the Commission on 7 September 1998 also deals with the same matter, but this Code has not yet come into force.

3. It will be clear that when the Gridco circular in question was issued on 11.12.98, there was no valid Regulation or Codal provision governing the mode of billing consumers in a situation of "house locked". At the same time it was necessary to issue some guidelines to the field on how billing was to be done in a "house locked" situation so that the process of billing and collection can continue without interruption till the OERC Code comes into force. Load factor billing as an interim measure was preferred over two other alternatives which were considered, namely (a) average of the preceding three months bills (b) bill based on the last meter reading. In many cases of reported "house locked" the last meter reading may have been taken several months ago and would have no relation to present consumption. There are also cases of last recorded consumption being below the minimum charge level (which was 44 units/kilowatt of connected load for domestic consumers). Changing such consumers on the basis of meter as last read or on the basis of three months average consumption would not give the consumer any incentive to insist on his meter being read, nor would it discourage the nexus between the dishonest consumers and conniving meter readers.

4. It is always open to Gridco to issue a notice to a consumer to allow access to his meter and to disconnect him in the event of persistent failure to allow access to the meter. But disconnection often leads to litigation and stay orders from Courts whereas load factor billing, especially as an interim measure is seldom stayed by Courts.

2.2 Gridco prayed that in the circumstances pointed out above, the circular in question authorising load factor billing as an interim measure pending the preparing of a revised bill based on meter reading may be allowed to stand till the OERC Distribution (Conditions of Supply) Code 1998 comes into force.

3. Upon consideration of the above stated report dt. 23.01.99, the Commission decided to resolve the issue through a hearing; and accordingly hearing was fixed for 05.03.99.

3.1 The Chairman-cum-Managing Director, Gridco was directed to file his reply to the original application of the Joint Secretary. Federation of Consumer Organisations on or before 1.3.99 complying with Regulations 43 and 44 of the OERC (Conduct of Business) Regulations,1996. In response to the notice dt.18.02.99, Director (Distribution/Gridco, filed a formal reply on 01.03.99.

4. Substantially denying the averments in the application filed by the Federation, it was stated that the spirit of the impugned letter dt. 8.12.98 was to ensure that no bill was served without making all possible attempts to take meter reading. It is also averred that this instruction was subsequently revised in another impugned letter dated 11.12.98 which provided that in cases of "house locked" condition, the energy bill is to be prepared on the basis of previous meter readings provided such readings have been taken in the preceding three months and if no such readings are available, the consumer could be provisionally billed on load factor basis.

4.1 It further reiterated its stand taken under para (iii) of the letter dt.23.01.99 that there was no valid Regulations or codal provision governing the billing procedure of the consumers in a "house locked" condition. It also mentioned that though OERC Distribution (Condition of Supply) Code, 1998 has been published in an extraordinary Gazette dated 5.1.99 yet it came to their notice in the 2nd week of Feb. 1999 and having been cognizant of this Regulation, all field officers have been intimated vide its letter No.47 dt. 10.02.99 (Annex-A) that Regulation 63 will be followed in cases of "house locked" condition.

4.2 The Director (Distribution) at para 5 of his reply dated 01.03.99 apparently took exception to OERC forwarding a copy of the Gridco's letter dt.23.01.99 to the Joint Secretary, Federation of Consumer Organisations. In this connection, the Commission would like to observe that the language and pleadings at para 5 of the reply betray the inadequacy of Gridco officials in understanding the quasi-judicial process of a regulatory authority. Such pleadings must be avoided in future.

5. Mr. Jena appearing for the petitioner submitted that it is abundantly clear from the letter dt. 23.01.99 and the reply of the Gridco that it has issued both the impugned letters dated 8.12.98 and 11.12.98 to its field officers and that the instructions under these two letters were repugnant to the Retail Supply Tariff order of the Commission, if not, the OERC Distribution (Conditions of Supply) Code, 1998. He further submitted that the so called underlying noble spirit of those two impugned letters is only a matter of defence. The reasoning behind the defence is only an afterthought and cannot be sustained on the wordings of the specific instruction of the Director (Distribution) to his field officers. He contended that all the three prayers made by him should be allowed in the interest of justice & fair play.

6. Mr. B.P. Rekhani, General Manager (RAU), Gridco submitted that the licensee had no intention to act contrary to the orders of the Commission issued for Retail Supply Tariff as well as the provisions of the Orissa Electricity Regulatory Commission Distribution (Conditions of Supply) Code, 1998. According to him those instructions were issued in the best interest of the Gridco without any malafide intention and as soon as it came to know that Orissa Electricity Distribution (Conditions of Supply) Code, 1998 had been gazetted, revised instruction under letter No.47 (4)/D(D)/ dated 10.02.99 (Annex-A) was issued to the Managing Director of the four Distribution Zones to raise bills in accordance with Reg.63 of the above Code, 1998, in supersession of the instruction issued under the letter dated 11.12.98.

7. In the facts and circumstances of the case as discussed above, there is no need to strike down the impugned order dt.11.12.98 in as much as the licensee has already superseded the same in its letter dt.10.02.99.

7.1 With regard to the prayer for penalty on the charge of wilful violation of the order of the Commission, we are inclined to accept the submissions made by Mr Rekhani that the letters dt.8.12.98 & 11.12.98 were issued without any malafide intention to upstage the orders of the Commission. While we hold that the instructions were unwarranted and had perhaps been issued to take advantage of the outdated provision of the erstwhile OSEB's (General Conditions of Supply) Regulation, 1995, Gridco may be given the benefit of doubt of wrong interpretation. In the circumstances the Commission does not consider it proper to take any penal action under Section 31(1) of the OER Act, 1995.

7.2 The third specific prayer that the load factor should be revised downwards is not quite relevant. The method of billing and determination of load factor percentage are issues which can be decided during tariff proceeding and during finalisation of Distribution (Condition of Supply) Code. The issue in this case is whether the licensee is justified in law to raise bills on load factor basis in "house locked" situation. The answer is a clear "no".

7.3 In the facts and circumstances, we order that all the bills raised on load factor basis in "house locked" conditions for the period 01.12.98 to 04.01.99 must be revised in conformity with the terms of Retail Tariff order and report of compliance should be submitted to the Commission within thirty days of receipt of this order. The Commission would like to observe that the issue of any instruction which is not in conformity with the tariff order as authorised by the Commission should not recur.

The case is disposed accordingly.

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