Case: Sai Bhaskar Iron Ltd Vs. A.P.Elect.Regul.Commission

to subsidy by the State Government is not at all attracted. The matter involved in the present cases is not of subsidy but determination of fuel surcharge formula. Thus, the submission based upon the violation of the provision of section 65 is wholly unwarranted and is liable to be rejected as subsidy has not been included in the determination of fuel surcharge. It cannot be invalidated on the ground of violation of provisions contained in section 65 of the Act of 2003. In Re : Lapse of Regulations of 1999 : 37. Next submission raised on behalf of the appellants is that the Regulations of 1999 as amended in 2003 being the tariff regulation under the Act of 1998, ceased to have effect on 10.6.2004 after one year from the date of coming into force of the said Act, by reason of proviso to section 61 of the Act of 2003. The submission raised is untenable for various reasons. First is that regulations have been framed with effect from 10.6.2004. The proviso to section 61 of the Act of 2003 makes it clear that the terms and conditions for determination of tariff and the enactment specified in the Schedule as they stood before the appointed date, shall continue to apply for a period of one year or until the terms and conditions for tariff are specified under section 61, whichever is earlier. Thus, the tariff regulations framed under the Act of 1998 would remain in force for maximum period of one year and the regulations had been framed with effect from 10.6.2004 and the Transitory Regulations have been enacted vide Regulations of 2004 by the Commission. Regulation 2 of said Regulations of 2004 clearly provides that Regulations of 1999 as amended from time to time under the Act of 1998 shall apply as regulation under the Electricity Act, 2003 and shall remain in force or till new regulations are notified by the Commission under the Act of 2003. Even if earlier Regulations of 1999 came to an end on 10.6.2004 and if it is further assumed without deciding that the Commission had no authority to enact retrospectively, in our opinion, it could have adopted the Regulations of 1999 as amended, framed under the Act of 1998 shall continue, to apply for future. Considering the period in question involved in the matter, it cannot be said to be Regulations of 1999, as amended, are inoperative as they have been adopted vide Regulation No.9/2004. With respect to the fuel surcharge adjustment no provision has been made in the regulations framed in the year 2005. On facts also, the Regulation 45-B was implemented subsequently and had been again amended in the year 2013. It has operated for more than a decade for determination of FSA. In Re : Procedural lapse in framing Regulations : 38. The submission raised that amended Regulations were without previous publication as envisaged under section 181(3) of the Act of 2003, as such they are void due to non-compliance of the said provision. It is apparent that Regulation 9/2004 was previously notified as mentioned in the notification itself. A draft of regulations was published seeking suggestions and comments. No suggestions for changes/modification were submitted. As such the regulations are in compliance with the provision of section 181 read with section 61. Thus we find no violation of the provision of section 181(3). The contention that there was no previous publication is factually incorrect. Effect of Regulations of 2005 : 39. Submission raised that the FSA can be realized in terms of the Regulations of 2005 cannot be accepted for the simple reason that the Regulations of 2005 do not deal with FSA and there is a saving clause as provided in Regulation 24. Moreover, the Act of 1998 had not been repealed and there was re-adoption of the Regulations of 1999 in the year 2004. It is also factually incorrect submission that FSA had been realized under the Regulations of 2005 after framing of the said regulations. In fact FSA had been determined as rightly contended on behalf of the Commission under Regulation 45-B as amended in 2003 for more than a decade. A challenge had been raised for the first time after 10 years. It is obvious that the parties clearly understood Regulation 45-B is in vogue and in fact it legally prevailed and rightly followed. 40. It was also submitted that Regulation 6(4) of Regulations of 2005 provides that ARR shall contain power purchase cost for each year of the controlled period. It is clear from ARR as defined in Regulations of 2005 and FSA that they do not run counter to each other but are supplementary. The Regulations of 2005 do not deal with determination of fuel surcharge. Regulation 45-B cannot be said to be invalid for the aforesaid reason. 41. There is a saving clause contained in Regulation 24 of Regulations of 2005. Regulation 12.4 provides that the distribution licensee shall be entitled to recover or refund as the case may be the charges on account of fuel surcharge adjustment as approved by the Commission from time to time suo motu or based on the filing made by the institution company as the Commission may deem fit. The provisions of the Act provided that the formula has to be specified by the Commission for FSA and this has been specified only in Regulation 45-B which has been adopted in the year 2004 for continuance by the Commission. The Commission had adopted the said regulations and the same continues to be in operation. Conclusion : 42. In our opinion, the challenge made by the appellants is unworthy of acceptance. Fuel surcharge is really a surcharge levied to meet increased cost of generation and purchase of electricity and the scope cannot be circumscribed by its nomenclature. Thus the formula in Regulation 45B and the FSA determined by the Commission would take into consideration various factors which result in the increased cost of generation and purchase of electricity.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]42. In our opinion, the challenge made by the appellants is unworthy of acceptance. Fuel surcharge is really a surcharge levied to meet increased cost of generation and purchase of electricity and the scope cannot be circumscribed by its nomenclature. Thus the formula in Regulation 45B and the FSA determined by the Commission would take into consideration various factors which result in the increased cost of generation and purchase of