Industry body moves power regulator against escoms

Industry body moves power regulator against escoms

A series of confusing government directives and actions in the last ten days has peeved heavy power consumers, including large and small  industrial units.

First, the power utilities sought a new tariff revision. This was followed by Energy Minister Eshwarappa’s statement on load-shedding, stating that there was a severe power crisis. Then came Chief Minister B S Yeddyurappa’s denial. 

The State government is now caught in a bind, with the Federation of Karnataka Chamber of Commerce and Industries (FKCCI) approaching the Karnataka Electricity Regulatory Commission (KERC) for violation of licence conditions, including imposing load-shedding, on consumers.


“The Escoms are denying power supply by discriminating against the consumers based on their geographical location. As per the Electricity Act, the Escoms have signed an agreement promising 24 hours of power supply.

But now, their statements show that they are cheating them by creating a scarcity although there isn’t any. Therefore, we filed this petition seeking revocation of the licences,” said FKCCI president Jacob Crasta.

Another FKCCI member said that even the meeting between industry representatives and Industries Minister Murugesh Nirani was an attempt to bypass the regulatory process and to go ahead seeking tariff revision.

Citing various load-shedding notifications by the Escoms, FKCCI said that these notifications were illegal, untenable and capricious and were hence liable to set aside “in limine” (with exemplary fine).

No authority

“There is no authority or power vested with the licensees to deny power to consumers. As per the Act, the licensees are under statutory obligation to provide quality, continual and reliable power supply to consumers within their areas of distribution license,” FKCCI said.

Pointing out that there was no deficit or shortfall in power supply to the distribution licensees, an FKCCI power expert said: “If there was a supply constraint, they should have sought sanction of KERC under section 23 of the Electricity Act for equitable allocation of power. Since distribution companies have not done so, Escoms cannot impose load-shedding.”  This, according to the FKCCI, was a violation of the licencing condition of KERC's 2004 licensing rules. “According to this regulation, any violation is liable for revocation of the licence, " an FKCCI source said.

Another expert said that powercuts for rural consumers was a case of “sheer discrimination” as the tariff collected from all the consumers was the same. "Same tariff is collected from all the consumers, the only difference is that Government pays for them, but the hours of supply varies, which is nothing but tampering with the tariff," he observed.

The FKCCI has sought an interim stay on the load-shedding notification of July 31, 2009 and has sought an investigation under Section 128 of the Electricity Act, 2003. This would involve appointing an investigating authority into the affairs of the Escoms and imposition of a fine Rs 1 crore on each Escom. "Even though the Escoms may defend themselves saying that they acted as per government directions, the government cannot direct the Escoms to resort to indiscriminate load-shedding,” a source said, adding that the Energy department will have to issue a direction to KERC under provisions of the Electricity Act to equitably allocate power to the consumers.

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