APERC rejects Tata Power plea to quash Rs 10cr fine
TNN | Aug 24, 2011,
HYDERABAD: Tata Power suffered a setback after the AP Electricity Regulatory Commission (APERC) refused to intervene in a dispute between the state power utilities and the company on imposition of a penalty of over Rs 10 crore for failing to supply power. The short-term power supply agreement was entered in 2010.

Taking strong objection to the violation, APTransco and four discoms imposed a penalty of Rs 9.72 crore and Rs 96.48 lakh respectively on Tata Power. After several rounds of correspondence, APTransco deducted the penalty from the amount to be paid to Tata Power.

As per the agreement, Tata Power was to supply power to cater to the demands of the rabi season. Instead of supplying power to AP, Tata had supplied power to Gujarat, Maharashtra and West Bengal in April 2010.

APTransco and the four discoms - central, northern, southern and eastern - had entered into a pact with Tata Power trading company last year to supply power in the months of March, April and May. Transco and the discoms said Tata Power did not honour its commitment by failing to supply power in the crucial months.

Taken aback by APTransco's move, Tata Power later filed a petition in APERC urging it to declare the deduction of Rs 9.72 crore as null and void. However, commission chairman A Ragottham Rao and member C R Sekhar dismissed its plea. "The commission has no power to adjudicate disputes between two licensees," the ERC said.

Since Tata Power is not a power generating company but a trading company, the ERC declined to intervene in the issue and directed Tata Power to approach a civil court to get relief. "Tata Power's contention that it has supplied power to Maharashtra was not considered by ERC," said Transco sources.