Maharashtra State Electricity Regulatory Commission must reject the application of Torrent Power for grant of distribution license for Kalyan, Thane, Palghar and adjoining areas

Draft of the Letter of Objections by Subordinate Engineers Association

Draft of the Letter of Objections in response to application filed by Torrent Power Limited for grant of Distribution License for Kalyan, Thane, Palghar and adjoining areas, prepared by Subordinate Engineers Association of Maharashtra, for sending to the Maharashtra State Electricity Regulatory Commission by individual consumers and workers

Date: 03/02/2023

To,
Secretary,
Maharashtra State Electricity Regulatory Commission,
World Trade Centre, Centre No.-1
13th floor, Cuffe Parade, Colaba,
Mumbai-400005.

Reply to CASE No.1 of 2023

SUBJECT: Objections in response to application filed by Torrent Power Limited for grant of Distribution License under Section 14 and Section 15 of Electricity Act, 2003 for Kalyan, Thane, Palghar and adjoining areas

Ref: Public Notice (CASE No.1 of 2023) dt.07/01/2023.

Torrent Power Limited (TPL) vide its Public Notice dated 07.01.2023 has invited objections on the application filed by TPL for under Section 14 and Section 15 of the Electricity Act, 2003 read with Maharashtra Electricity Regulatory Commission (General Conditions of Distribution Licence) Regulations, 2006 and other applicable Rules and Regulations, for grant of distribution licence to TPL seeking grant of Distribution Licence with respect to the geographic area comprising of Vasai Virar Municipal Corporation and surrounding areas, Kalyan Dombivli Municipal Corporation, Ulhasnagar Municipal Corporation, Thane Municipal Corporation (Excluding Distribution Franchisee Area), Ambernath Municipal Council and surrounding areas.

Accordingly, I hereby submit my objections on the said public notice as below:

1. The Notification of Ministry of Power dt.8th September 2022 in its Clause (2) has stated as follow:
   “Explanation: For grant of a license for distribution of electricity within the same area in terms of sixth proviso to section 14 of the Act, the entire area covering either a Municipal Corporation as defined in article 243Q of the Constitution or three adjoining revenue districts, or a smaller area as may be notified by the Appropriate Government shall be the minimum area of supply”

   However, the area sought by the applicant does not qualify the above criteria as the Notification does not include “Municipal Council” and the applicant has sought Ambernath Municipal Council. Also, the surrounding areas mentioned are not notified by the Appropriate Government.

   Hence, the Hon’ble commission is requested that the petition may please be disposed-off without any public hearing.

2. The Applicant has purposefully and wilfully with ill intention has not disclosed its committed investments as specified by the Central Government notification “The Distribution of Electricity Licence (additional requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, 2005.” Rule 3 (2).

   It can be rightly concluded that the application for grant of license is not complete in its true sense. Hence, the application of the applicant should be disposed-off without public hearing.

3. The Applicant has purposefully and wilfully with ill intention has not disclosed in its undertaking the requirements of code of conduct as specified in the Central Government notification “The Distribution of Electricity Licence (additional requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, 2005.” Rule 4. The same is reproduced below:

   Requirement of code of conduct: The applicant for grant of licence shall satisfy the Appropriate Commission that he has not been found guilty or has not been disqualified under any of the following provisions within the last three years from the date of application for the grant of licence:

   1. section 203, section 274, section 388B or section 397 of the Companies Act, 1956;
   2. section 276, section 276B, section 276BB, section 276C, section 277 or section 278 of the Income-tax Act, 1961;
   3. section 15C, section 15G, section 15H or section 15HA of the Securities and Exchange Board of India Act, 1992;
   4. clause (b), (bb), (bbb), (bbbb), (c) or (d) of sub-section (1) of section 9 of the Excise Act, 1944;
   5. section 132 or section 135 of the Customs Act, 1962,
      and that the applicant is not a person in whose case licence was suspended under section 24 or revoked under section 19 of the Act, within the last three years from the date of application: Provided that where the applicant is a company, it shall satisfy the Appropriate Commission in addition to provisions of this rule that no petition for winding up of the company or any other company of the same promoter has been admitted under section 443(e) of the Companies Act, 1956 on the ground of its being unable to pay its debts.

      Hence, the application of the applicant may be disposed-off without public hearing.

4. The MERC vide its order in case No.29 of 2019 dt.08/05/2019 (Aurangabad Industrial Township Limited Vs MSEDCL) in its analysis and ruling has observed that the issues raised by the MSEDCL objecting for the grant of parallel distribution license are relevant.

   Hence, the application of the applicant seeking for grant of parallel license should be disposed-off without public hearing.

5. The tariff for the current control period has already been determined by the State Commission, any outflow of consumers to the applicant’s proposed area of supply would naturally have an adverse revenue impact and would alter the consumer mix of MSEDCL. In other words, loss of industrial consumers, who were subsidizing a class of consumers, would disturb the cross-subsidy balance, which otherwise naturally would have benefitted the existing and prospective end consumers of MSEDCL. Therefore, there is the question of larger public interest as the issue is of commercial interest of certain industrial consumers vis-à-vis beneficial interests of large number of end consumers of all variation.
6. It is relevant to note in this context that the Electricity Act, 2003 has provided only for the Central Government to prescribe specific requirements and not for the State Commission. As stated above the applicant does not satisfy the Capital Adequacy, Creditworthiness, Code of Conduct prescribed by the Central Government. Thus, it is clear that although once a precondition relating to the Capital Adequacy, Creditworthiness, Code of Conduct prescribed by the Central Government are satisfied, it does not necessarily mean that the State Commission or the Appropriate Commission can consider the other relevant aspects to decide also whether to grant parallel licence or not.

   Hence, the application of the applicant should be disposed-off without public hearing.

7. This means that the satisfaction of additional requirements specified will not automatically lead to the grant of parallel distribution licence.

   Hence, the application of the applicant may be disposed-off without public hearing.

   Hence, it is humble request to Hon’ble Commission that the severe objections raised as above may please be taken on record and be considered for disposing-off the application filed by the applicant for grant of Distribution License under Section 14 and Section 15 of the Act.

   I crave leave for furnishing any additional submissions/amendment in the matter and hereby request the Hon’ble Commission to grant liberty to be present and make further submissions if the Public Hearing is still held in the matter.