Order in Petition No.

3 of 2015

PUNJAB STATE ELECTRICITY REGULATORY COMMISSION

SCO NO. 220-221, SECTOR 34-A, CHANDIGARH
Petition No. 3 of 2015
Date of Order: 20.05.2015
Present:

Smt. Romila Dubey, Chairperson

Er. Gurinder Jit Singh, Member

In the matter of : Petition under Regulation 45 of PSERC (Terms and

Conditions for Determination of Tariff) Regulations
2005 and Para 23 of the General Conditions of Tariff
and Regulation 45 of PSERC (Terms and Conditions
for Intra-state Open Access) Regulations 2011 and
other relevant rules, regulations and procedures
approved by Honble Commission for rendering
clarification to PSPCL on applicability of ToD Tariff on
Power brought in by the Petitioner under open access
and power factor & formula to be taken by PSPCL for
converting power under open access in kWh to kVAh
etc.
AND
In the matter of : Nahar Spinning Mills Limited having its Registered
Office at 373, Industrial Area A, Ludhiana, through
Shri P.P.Singh, Vice President (Electricals and
Utilities).
.............Petitioner
Versus
Punjab State Power Corporation Limited through its
Chairman-cum-Managing Director, The Mall, Patiala.
.........Respondent
ORDER:
1.

The present Petition has been filed by Nahar Spinning Mills Ltd.
The Petitioner has submitted that it has a Large Supply
connection at Jitwal Kalan, near Malerkotla, in Punjab, with
Account No. L38-KK01-00003, having sanctioned connected load
1

Order in Petition No. 3 of 2015

of 25800 kW and sanctioned contract demand (CD) of 18500

kVA. Though the issues raised here in this Petition are of the
Jitwal Kalan unit near Malerkotla but the Petitioner is facing
similar issues at its other two units also. The Petition has been
filed for interpretation and applicability of ToD & kVAh Tariff
described in General Conditions of Tariff and determined in Tariff
Order for FY 2014-15 under PSERC (Terms and Conditions for
Determination of Tariff) Regulations, 2005 and issuance of
suitable directions to PSPCL in this regard. To stress its point,
the Petitioner has reproduced/quoted para 7.3.15 of the Tariff
Order for FY 2014-15, Schedule of Tariff para SI-3, Regulation 45
of PSERC (Terms and Conditions for Determination of Tariff)
Regulations, 2005 and paras 15 & 23 of General Conditions of
Tariff. The Petitioner has submitted that ToD Tariff was adopted
by PSPCL vide CC No. 46/2014 dated 04.09.2014. ToD tariff
came into force w.e.f. 01.10.2014 and the Petitioner opted for the
same vide letter dated 15.09.2014. The Petitioner is also availing
power under open access from Indian Energy Exchange and has
signed agreement with nodal officer i.e. SE/Open Access, under
CE/SLDC, PSTCL.
2.

The Petitioner has submitted that ToD Tariff was also made
applicable during the year 2013-14 as per para 5.3.8 of the Tariff
Order for the year 2013-14 and open access charges were
determined in para 6.10 of the said Tariff Order. ToD tariff was
adopted by PSPCL vide CC no. 24/2013. However, at that time,
the rebate of 1/- per unit was allowed only for night consumption
during 10 PM of the day to 6 AM of the next day. PSPCL, while
implementing these instructions, did not allow this rebate of 1/per unit on the power brought by the Petitioner under open
2

Order in Petition No. 3 of 2015

access. For the current year in question, ToD rebate is applicable

on the power consumed during night hours @ 1.50 per unit and
ToD charge of 3/- per unit is applicable on the power consumed
during the peak period of 6 PM to 10 PM. It has also been
submitted that before the start of second half of the current year,
the Petitioner approached PSPCL to confirm that as per last year
practice, this ToD rebate and ToD charge will not be applicable
on the power brought under open access but no reply was given
by PSPCL in this regard. The Petitioner then submitted a
communication to PSERC to clarify the matter (with copy to
PSPCL). No reply was given by PSPCL in this regard. However,
the Commission issued categorical directions to the Petitioner to
file the instant Petition.
ToD tariff for this year as well as for last year has been
introduced as per the Tariff Orders. The treatment to be given
with regard to ToD tariff upon power brought under open access
was neither provided last year nor this year in the Tariff Orders
issued by the Commission. Even PSPCL did not issue any
consequent commercial circulars in this regard. However, PSPCL
is interpreting the applicability of ToD tariff for last year & this
year differently and has chosen to apply different treatment to
power brought under open access by the Petitioner this year as
compared to last year. While no ToD rebate was allowed last
year on open access power, PSPCL has chosen to include open
access power in the consumption eligible for ToD rebate and ToD
charge.
The Petitioner has further submitted that even Deputy Chief
Engineer/Open Access, PSTCL has issued open access
UI/deviation settlement account for the months of October and
3

Order in Petition No. 3 of 2015

November, 2014, in which power purchase from open access for

the period 00.00-06.00 hours and 22.0024.00 hours (period of
ToD Rebate) and from 18.0022.00 hours (period of ToD charge)
has been shown separately.
The Open Access Regulations provide for charges payable by
the consumers on open access power. There is no provision for
giving ToD rebate/claiming ToD charge on the open access
power. The open access charges for the year 2014-15 have been
determined by the Commission in para 9.10 of the Tariff Order
and there is no mention of applicability of the ToD rebate/charge
on open access power. Similarly, there is no mention of
applicability of ToD rebate/charge on open access power in
Electricity Act, 2003. Further, Regulation (18) (2) (g) of the Open
Access Regulations states that During peak load hour
restrictions, the open access customers shall restrict their total
drawl including open access power to the extent of the peak load
exemption allowed. This provision has also been provided in
Short

Term

Open

Access

procedure

approved

by

the

Commission (para 2.1 (A) (vii) and in para (2) of the Undertaking
to be given by the Open Access Consumer for obtaining
permission). Further, para 7.3.15 of the Tariff Order for FY 201415 provides that consumers opting for ToD tariff will be allowed to
consume power up to Contract Demand. In line with this
provision, SLDC has amended the approval letter and NOC for
open access to this extent. Thus, under the ToD regime, the
consumers are allowed to draw power up to Contract Demand
during Peak Load Period including power drawn from PSPCL and
under open access.

Order in Petition No. 3 of 2015

The Petitioner has further submitted that PSPCLs concern that

there are transmission and wheeling constraints requiring
restrictions on power flow in the system also does not hold good
as both PSPCL and PSTCL have certified that their systems can
meet the demand. In any case, there cant be any constraint in
winter months when the load on PSPCL Distribution and PSTCL
Transmission systems reduces by 40 to 50%, compared to paddy
period. Moreover, ToD order itself provides for permitting usage
of power up to Contract Demand by the consumers and any such
restrictions are totally unjustified.
3.

It has been submitted by the Petitioner that the Commission

introduced kVAh tariff vide para 7.1.5 of the Tariff Order for FY
2014-15. For designing the kVAh tariff, PSPCL had worked out
the normative Power Factor for LS (General Industry) as 0.95
and for LS (PIU/Arc Furnace) as 0.98. However, as per CERC
and PSERC Open Access Regulations, the open access power
schedules and charges are worked out in MW/MWh. As such, the
open access power under bilateral/collective transactions is
flowing in MWh and has to be converted to MVAh by applying the
power factor. Every LS consumer has installed capacitor banks to
improve the power factor but the actual power factor being
maintained by the consumer varies depending up on the quantity
and quality of the capacitor banks. The actual power factor shall
vary for each consumer and also on monthly basis. The Tariff
Order/General Conditions of Tariff/Open Access Regulations
does not provide any clarity as to which Power factor is to be
applied for converting MWh quantum of Open Access power to
MVAh quantum. Also, there is no provision for treating such
power in MWh as equal in MVAh. PSPCL, on its own, simply
5

Order in Petition No. 3 of 2015

treated the quantum of open access power in MWh as per

schedules as equal quantum in MVAh without applying the
normative or actual power factor for working out the billing of
PSPCL power in the bills raised for the months of October and
November, 2015. In the bill for the month of December, 2014,
PSPCL has calculated the quantum of open access power in
kVAh by multiplying the quantum brought in kWh by normative
power factor based on CC No. 49/2014 dated 16.10.2014. The
consumption and billing has been revised by PSPCL for the
months of October and November also by taking this normative
power factor and the difference has been adjusted through
sundry charges. With this arbitrary conversion, open access
power of 4741282 kWh has been treated as 4504218 kVAh i.e. a
reduction of

237064

units

of

open

access

power

and

corresponding increase in PSPCL energy consumption for which

Petitioner has been billed for 13 lakhs approximately. The
formula given in CC No. 49 of 2014 clearly states that it is for
conversion of kWh tariff to kVAh Tariff and not for the conversion
of quantum of energy from kWh to kVAh but PSPCL is using this
to financially burden the consumers opting for open access. kVAh
tariff was introduced by PSPCL vide CC No. 43 and CC No. 44 of
2014 and Open Access Charges given in CC No. 45 of 2014 but
there is no formula given in these circulars. CC No. 49 of 2014 is
for rebate of 1/- per unit above the threshold consumption and
not for open access or introduction of kVAh tariff. CC No. 49 of
2014 gives methodology to work out the target consumption
where conversion factor is to be used for converting the kWh
consumption into kVAh consumption on the basis of prevailing
tariff in last three years, which were in per kWh. The kVAh
6

Order in Petition No. 3 of 2015

recorded by the meter can be correlated to the kWh by the

equation as under:
kVAh = kWh / Power Factor
PSPCL is amply clear about the conversion factor, power factor
and formulae for conversion of tariff and quantum but PSPCL has
chosen to adopt its own methodology without informing the
consumers in advance and in a biased manner, to put the open
access consumers at a loss financially after a period of 3 months.
The Petitioner has further submitted that the DLMS Trivector
meters installed as per approval of PSPCL display power factor
in 0.xxx format, whereas normative power factor is in 0.xx format.
The Petitioner has requested for clarification as to which Power
Factor (normative or actually achieved by the consumer in the
month) is to be applied for converting the open access power in
MWh to MVAh and which formula is to be adopted to convert the
quantum of power from kWh to kVAh. In case, actual power
factor is to be applied, then whether three digit or two digit format
is to be taken for applying the actual power factor. Further, if
power factor is to be worked out from kWh and kVAh readings of
the month, then also 3 or 4 digits need to be taken because of
the consumption being in LU/MU per month for the Petitioner and
3 or 4 digits will result in approaching as near to the actual as
possible and will be fair to both the parties. That for the balance
of convenience to both PSPCL and Consumers, the Petitioner
has suggested that actual power factor with three digit format (if
PF is to be taken as per meter reading) or 4 digit format (if PF is
to be worked out from monthly kVAh and kWh readings) be
applied for working out the quantum of open access power in
MVAh.
7

Order in Petition No. 3 of 2015

4.

It has also been submitted that as per paras 7.6.2 and 7.6.3 of
the Tariff Order for FY 2014-15 and as per CC No. 49 of 2014, a
rebate of 1 per unit is admissible on tariff to all consumers,
except Agriculture and Railway Traction for the consumption
above the threshold limit/target consumption. However, till date,
PSPCL has not informed the threshold consumption to the
Petitioner. If it would have been done, the Petitioner would have
planned its sourcing of power from PSPCL in advance and it
would have helped in achieving the aim/goal for which the rebate
was designed i.e. maximising the consumption of PSPCL power,
reducing the back down of its thermal plants/surrender of central
sector power and PSPCL would have managed its finances in a
better way.

5.

The Petitioner has prayed that the Commission may kindly issue
directions to PSPCL as under:
1.

Not to apply ToD rebate/charges on open access power;

2.

To apply actual power factor with three or four digit format

and formula for working out the quantum of open access
power in MVAh;

3.

To work out the threshold consumption for eligibility of

rebate of 1/unit and display it on the bills;

4.

To rectify the bills in light of the above and refund the

excess amount recovered from the consumers with penal
interest or surcharge applicable to consumers for delayed
payments;

5.

Any other order/relief which the Commission may grant in

favour of the Petitioner in the facts and circumstances of
the instant matter.

Order in Petition No. 3 of 2015

6.

The petition was admitted vide Commissions order dated

27.01.2015. PSPCL was directed to file reply by 02.03.2015 with
a copy to the Petitioner, who was to file rejoinder to the reply of
PSPCL by 10.03.2015, with a copy to PSPCL. The next date of
hearing was fixed for 17.03.2015.

7.

PSPCL submitted its reply to the petition vide CE/ARR&TR

memo no. 5238-39 dated 09.03.2015. PSPCL submitted that the
Petition is misconceived as in the first instance ToD tariff is
optional for the Petitioner as well as other Large Supply
consumers and even under ToD tariff, the Petitioner is in an
advantageous position compared to earlier PLEC system of
charging the Petitioner for power consumed during peak load
hours. In comparison, ToD tariff is beneficial to the Petitioner as
well as other Large Supply consumers. PSPCL has elaborated
the method of billing under PLEC and ToD regime.
(a) Billing under PLEC System:
(i)

Prior to introduction of ToD tariff, Large Supply consumers

desiring to run their industry during peak load hours were
required to get sanction for the power (kW) to be used.

(ii)

The power consumed during peak load hours in a month

was worked out as per formula (kW x 3 x 30 = kWh) where
30 was the days of the month and 3 was taken as hours of
use every day (as peak load hours period was fixed for 3
hours daily during the period 6 PM to 10 PM).

(iii)

The energy consumed during this period was charged extra

@ 2.70/ kWh upto 65% of contract demand and @
4.05/kWh between 65% and 90% of contract demand as
per sanction granted by PSPCL during peak load hours.

Order in Petition No. 3 of 2015

(iv)

The Petitioner purchasing power through open access was

also consuming this very power along with power drawn
from PSPCL during peak load hours and paying the
respondent as per rates given in Para (iii) above and this
was never challenged by the Petitioner. For use of power
beyond sanctioned limit, penalty @ 750/kVA as demand
surcharge was leviable.

(b) Billing under ToD tariff:

Under ToD tariff for Large Supply consumers who opted for
this tariff, the actual energy consumed during peak load
hours (6 PM to 10PM) recorded by the meter is charged
extra @ 3/kVAh for power purchased through open
access as well as drawn from PSPCL generation. Under
ToD tariff, the Petitioner got additional benefits as under:
(i)

The Petitioner can use power during peak load hours up to

sanctioned contract demand.

(ii)

No prior sanction is required from PSPCL for use of this

power during peak load hours.

(iii)

Actual energy consumed during peak load hours (6PM to

10 PM) and recorded by the meter is to be charged extra @
3/kVAh and not as per empirical formula (kW x 30 x 3)
under PLEC system where sanctioned power for use during
peak load hours was considered as fully utilized by the
consumers. The extra charges were leviable for full month
even if utilized for one day. But now under ToD tariff, 3/per kVAh is only charged during day when power is actually
consumed during peak hours.

10

Order in Petition No. 3 of 2015

(iv)

Demand surcharge @ 750/kVA is to be charged only in

case Petitioner utilized extra demand during peak load
hours beyond its full sanctioned contract demand.

(v)

Under ToD tariff, Petitioner is also given rebate @ 1.50

per kVAh for power consumed from PSPCL generation
during off peak hours of 10 PM to 6 AM, whereas no such
rebate is admissible under PLEC system of billing.

The peak load restrictions have been imposed by PSPCL with

the approval of Commission to control maximum demand during
peak load hours (6 PM to 10 PM) with the coming of load of
domestic and NRS consumers for lighting purposes. The
transmission system gets equally over loaded during peak load
hours whether power is drawn from PSPCL generation or through
open access by the Petitioner and charging extra charges @ 3/per kVAh for overall total power consumed during peak load
hours is required to control maximum demand which is required
to keep transmission system in healthy condition and levy of
charges is justified.
PSPCL has filed parawise reply to the Petition and has submitted
that rebate @ 1.50 per kVAh is admissible only on power drawn
from PSPCL during off peak hours of 10 PM to 6 AM under ToD
tariff. As per principle of equality and commercial principles, the
Petitioner is purchasing open access power being cheaper and
PSPCL has allowed rebate @ 1.50 per kVAh in order to
encourage drawl of power by the Petitioner (as well as other
Large Supply consumers opting ToD tariff) during off peak hours
of 10 PM to 6 AM when surplus power is available for use with
PSPCL. The Petitioner has no legal ground to compare power
drawn during peak load and off peak hours on the same footing.
11

Order in Petition No. 3 of 2015

The Petitioner has no ground to challenge its levy being just and
appropriate. The Petitioner has himself opted to be charged as
per ToD tariff.
Power from PSPCL and open access equally affect the maximum
demand on the system during peak load hours and restriction on
its use through levy of charges is in the interest of stability of
transmission system and to facilitate power supply to lakhs of
DS/NRS consumers including Hospitals, continuous power
industries, apart from electric traction trains.
PSPCL has further submitted that it is ready for issue of monthly
bills on the basis of recorded monthly power factor. In order to
resolve this dispute, PSPCL has already started converting the
open access units in MWh into MVAh by application of recorded
monthly power factor. During the month of February, 2015, the
billing has been made by PSPCL on the basis of this method as
requested in the petition by the Petitioner. PSPCL is also ready to
make suitable adjustments pertaining to bills of October and
November, 2014, in the bills being issued during March, 2015.
PSPCL has further submitted that the suggestion that actual
power factor be considered with 4 digit format instead of 2 digit
format may lead to unnecessary disputes in future. However, the
Commission may issue any instructions, if felt necessary, which
shall be abided by PSPCL.
PSPCL further submitted that updation of billing software for
calculation of threshold limit/target is under process.
With regard to charging of 3 per kVAh on power purchased
through open access, PSPCL has also submitted as below:
(i)

The circular CC No. 46/2014 is as per Tariff Order and

additional charge levied on overall power consumed from
12

Order in Petition No. 3 of 2015

PSPCL and open access is correct as per the facts given in

the preceding paras.
(ii)

The

plea

taken

by

the

Petitioner

is

wrong

and

misconceived. The Petitioner was earlier also paying PLEC

on overall power consumed during peak load hours and
there is no reason to believe the plea taken by the
Petitioner. The Petitioner is at liberty to purchase any
amount of power through open access and no restrictions
as such have been placed in CC No. 46/2014 issued by
PSPCL.
(iii)

The action of PSPCL is just and equitable and the

Petitioner has opted for ToD tariff where rebate is given on
power drawn from PSPCL generation during off peak hours
(10.00 PM to 06.00 AM). ToD tariff as being beneficial was
opted by the Petitioner.

(iv)

The Honble Commission has power to decide tariff for

various categories/sub-categories of consumers viz Large
Supply consumers opting ToD tariff and Large Supply
consumers opting PLEC system. PSPCL with the approval
of the Commission has declared peak load hours during the
period 06.00 PM to 10.00 PM and all Large Supply
consumers apart from other consumers (MS) are covered
under restrictions to use power during peak load hours. The
Commission is competent to levy surcharge on power
purchased through open access as both PSPCL power and
open access power equally affect the maximum demand on
the system during peak load hours and restriction on its use
through levy of charges is in the interest of stability of
transmission system and power supply to lakhs of DS/NRS
13

Order in Petition No. 3 of 2015

consumers including hospitals, continuous power industries

apart from electric traction trains.
PSPCL has prayed that the petition be dismissed.
8.

The Petition was taken up for hearing on 17.03.2015. The

Petitioner filed rejoinder to the reply of PSPCL during hearing of
the petition. The Commission vide order dated 18.03.2015, fixed
the next date of hearing as 07.04.2015, to hear the arguments of
the parties.

9.

The Petitioner in the rejoinder has denied and disputed all the
averments made by the PSPCL in its reply, save and except for
what has been expressly admitted to herein after and any
omission on the part of the Petitioner should not be construed as
an admission of the same by the Petitioner.
The Petitioner has submitted that it totally relies upon the
averments made therein in the Petition and has reiterated the
same to be read as part and parcel of the rejoinder. The
Petitioner has submitted that reply of PSPCL (paras 1 to 3) is
vague, evasive and does not address the issues raised in the
Petition on merit.
The Petitioner has submitted that, in fact, nowhere in its Petition
the levy of 3 per kVAh over and above the normal tariff on the
power consumed from PSPCL has been challenged, but has only
requested for levying this ToD charge on power bought in by the
Petitioner under open access, as per scheme of ToD tariff
approved by the Commission. The Petitioner has further
mentioned in the rejoinder that it is also wrong to state on the part
of PSPCL that ToD tariff is beneficial only to the Petitioner,
whereas the fact is that it is equally beneficial to the PSPCL, as it
flattens the load curve of PSPCL and saves the PSPCL from
14

Order in Petition No. 3 of 2015

backing down of its thermal plants during night hours. The

Petitioner and other Large Supply consumers are opting for ToD
tariff only in distress as operating the industry has become the
question of survival for them even without any profit.
The Petitioner has further submitted that PSPCL has concealed
the fact that LS consumers not availing ToD are levied PLEC of
1.80 per kVAh upto 65% of CD and 2.70 per kVAh above 65%
of CD for three hours only during the period October to March.
PSPCL has also not brought out in its reply that for those who opt
for ToD, the ToD charge is being treated as a part of SoP and for
power brought under open access, it is attracting 13% Electricity
Duty (39 paisa/kVAh), whereas for those who do not opt for ToD,
ED is not payable on PLEC, even if they bring power under open
access.
The Petitioner is consuming power round the clock and has a
uniform consumption pattern with slight adjustment/reduction of
load during peak load hours. It has been submitted that PSPCL
has failed to prove with data that with the coming of load of
Domestic and NRS consumers for lighting purposes, the
transmission and distribution system is so much overloaded in
winter months that it requires the imposition of PLEC. The factual
position is that the maximum load in the winter months is only
about 50% of the peak load in summer and there is no question
of system overloading in winter months when ToD is applicable.
The Petitioner has pointed out in the rejoinder that it has not been
explained that under which order/rule/regulation, PSPCL has
allowed ToD rebate on open access power brought in during
night hours (off peak hours) in the months of October and
December, 2014 and under which rule/regulations, the rebate
15

Order in Petition No. 3 of 2015

has been withdrawn from January, 2015 onwards. Further, it is

not clear that not allowing ToD rebate on open access power but
imposing ToD charge on open access power is violative of
Section 42 of the Electricity Act, 2003, which provides that open
access has to be provided on a non-discriminatory basis.
Section 42 of the Electricity Act, 2003 mandates the Commission
to determine wheeling charges, surcharge, additional surcharge
and cross subsidy surcharge for open access. There is no
provision to determine ToD charges for open access power in the
Electricity Act, 2003. Even the Open Access Regulations, 2011
framed by PSERC have no provision to charge ToD or PLEC on
open access power.
In its parawise reply, the Petitioner has submitted in the rejoinder
that PSPCL has failed to give reference to the provisions of the
Tariff Order for FY 2014-15 or Open Access Regulations under
which it is charging 3/kVAh on open access power brought in
during peak load hours and further making it a part of SOP for
levy of ED. As per the scheme of Electricity Act, 2003 and
specifically provided in para 23 of General Conditions of Tariff
issued by the Commission, the principle of equity and commercial
principles for interpretation of tariff are not to be inferred/decided
by the Distribution Licensee but by the Appropriate Commission.
It has also not been explained as to how and under which
Regulations, PSPCL allowed rebate of 1.50/kVAh on open
access power for the months of October to December, 2014 and
disallowed this rebate thereafter.
The power drawn during peak and non peak hours by the
Petitioner, whether under open access or from the Respondent,
has to be considered equally under ToD tariff as ToD has been
16

Order in Petition No. 3 of 2015

made applicable under the same commercial circular and

decided by the Commission in the Tariff Order as a package.
Open access power brought in during peak and non peak hours
has to be treated similarly i.e. if ToD charge is to be levied for
peak hours, then ToD rebate also has to be given for night hours,
as no distinction has been made between open access power
and PSPCL power in the Tariff Order or the commercial circular.
No data relating to October to March viz--viz March to October
has been given in support of the contention. PSPCL is making
vague statement to justify the levy of 3/kVAh on open access
power. It may be true that some additional load will come on the
transmission and distribution system during peak load hours but
the system is capable of taking the additional load during winter
and PSPCL has the capacity to meet the demand. Further, the
permission to use load upto Contract Demand on 24 hours basis
to consumers opting for ToD also supports the contention of the
Petitioner.
The Petitioner has further submitted that market rate differential
of the power during peak and non peak hours for term ahead
market prevailing at the Power Exchange as well as bilateral
trade also does not justify the ToD charge of 3/- per kVAh and it
should be much less so that the tariff reflects cost of supply. The
Petitioner has quoted extracts from Market Monitoring Report for
the month of December, 2014 issued by CERC.
The Petitioner has further submitted that PSPCL has conceded
that for converting the open access power in kWh to kVAh, the
use of normative power factor was an error committed by the
PSPCL. Further, PSPCL has also accepted that it will be using
actual power factor during the month maintained by the
17

Order in Petition No. 3 of 2015

consumer for the conversion. The Petitioner has submitted that

PSPCL be directed to refund the amount charged in excess due
to this wilful error along with interest charges. As per Section
62(6) of the Act, PSPCL has to refund such amount with interest
and the Commission may be pleased to order accordingly.
The power factor is available in the new DLMS meters upto four
decimal points. If it is applied as such, there will be correct
application and there will be a win win position for both PSPCL
and the Petitioner. If it is rounded upto two decimal points, then
either of the parties will be in the profit and other will be a loser. It
will, therefore, be appropriate if the power factor is applied upto
four decimal points.
It has also been submitted that PSPCL has not yet complied with
the orders regarding rebate of 1 per unit on consumption
beyond threshold limit passed by the Commission which shows
that the orders are not at all being taken seriously by the PSPCL.
The Petitioner has prayed to allow the instant Petition and grant
the reliefs to the Petitioner as prayed for.
10.

PSPCL filed its reply dated 06.04.2015 to the rejoinder of the

Petitioner during hearing of petition on 07.04.2015. Next date of
hearing was fixed for 05.05.2015, for hearing the arguments of
the parties.

11.

PSPCL reiterated the reply earlier filed by it to the Petition filed by

the Petitioner. PSPCL in its reply to the rejoinder submitted that
there is no violation of Electricity Act, 2003 or Open Access
Regulations where the Petitioner himself is not challenging the
levy of 3/kVAh over and above the normal tariff. The challenge
by the Petitioner that power consumed during peak load hours

18

Order in Petition No. 3 of 2015

and brought under open access should not be charged @

3/kVAh is not sustainable as per following:
(i)

ToD tariff is optional for all Large Supply consumers and

Petitioner has opted for ToD tariff against PLEC system of
charging the Petitioner earlier, for power consumed during
peak load hours.

(ii)

Prior to introduction of ToD tariff, Petitioner has been

paying for the power consumed during peak load hours
(whether drawn from PSPCL or through open access).
PLEC charges were duly approved by the Commission and
Petitioner never challenged it.

(iii)

Power consumed during peak load hours whether drawn

from PSPCL or through open access, affects the
transmission system of the respondent equally.

(iv)

As per the statutory provisions of Section 61 of Electricity

Act 2003, the respondent Corporation is required to run as
per commercial principles. The Commission is competent
to decide matters relating to Tariff and other allied issues
on commercial principles as per statutory provisions of the
Act.

(v)

ToD tariff is advantageous to the Petitioner as under PLEC

system, rebate @ 1.50/kVAh for power consumed during
off peak hours (10 PM to 6 AM) is not provided. The
Petitioner is at liberty to adopt PLEC system of charging or
may meet power requirements during peak load hours from
alternate source of power available.

The plea taken by the Petitioner that power drawn through open
access saves the respondent from backing down its thermal
plants is wrong, rather power drawn through open access
19

Order in Petition No. 3 of 2015

reduces demand on thermal plants and any backing down

increases the cost of generation as well to the respondent
PSPCL. PSPCL has denied that power tariff is high in
comparison to neighboring states equitably placed to sources of
power generation (thermal/hydro). Rather, the Commission, to
give boost to energy consumption, has given rebate @ 1.50 per
kVAh for power consumed during off peak hours (10 PM to 6
AM). Still further, the Commission has allowed rebate @ 1/kVAh
on consumption during FY 2014-15, above the average threshold
consumption of past 3 years. In case, the Petitioner still feels that
PLEC system of charging for power consumed during peak load
hours is beneficial, he is at liberty to opt for PLEC system. E.D. is
Govt. levy and is charged on SOP based on actual consumption.
Under PLEC system, actual consumption is not worked out as it
is based on empirical formula (kW x 3 x 30) and this was levied
when the meters did not have facility to store energy consumed
during different periods of the day. PLEC charging is just flat rate
based on kVA demand allowed to be run during peak load hours.
PSPCL has reiterated that with the coming of load of domestic,
commercial, essential services, continuous process industry
including railways, the demand during peak load hours has to be
controlled, to avoid break down of the transmission system. In
summer, the demand of power increases compared to winter and
generation capacity also increases during summer months
compared to winter months and problem of maximum demand
during peak load hours persists. In all the states, restrictions have
been placed on consumption of power during peak load hours to
control maximum demand.

20

Order in Petition No. 3 of 2015

Rebate on night consumption (10 PM to 6 AM) is given only on

power consumed from PSPCL and not on power drawn through
open access. This is as per principle of equity and commercial
principles. The Petitioner is purchasing power through open
access during off peak hours being cheaper and there is no
restriction for drawl/consumption of this power. The power
consumed during peak load hours drawn from PSPCL or through
open access is charged 3 per kVAh as explained above. There
is no violation of Electricity Act, 2003 or regulations for charging
3 per kVAh on total power consumed during peak load hours.
PSPCL has further submitted that it is incorrect that by not
allowing ToD rebate on open access power but imposing ToD
charges on open access power is violation of Section 42 of
Electricity Act, 2003 as there is no discrimination to the Petitioner
and all Large Supply consumers are being charged accordingly.
ToD only defines Time of Day whereas tariff was decided by the
Commission keeping in view the guiding principles enshrined in
the Act. Further, the Petitioner is being charged in equitable
manner keeping in view the commercial principles provided in the
Act.
The levy of 3/kVAh on power consumed during peak load hour
is just a surcharge levied over and above the consumption
charges based on total consumption as per Large Supply tariff
and there is no violation of the Act. The respondent PSPCL is
required to run on commercial principles as per statutory
provisions of the Act. PSPCL has further submitted that as
explained above, ToD levy of 3/kVAh on power consumed
during peak load hours is just a surcharge duly approved by the
Commission and decided in equitable manner after considering
21

Order in Petition No. 3 of 2015

the views of the industrial consumers and the Petitioner should

not have objected to it.
On para wise reply, the respondent PSPCL reiterated the earlier
reply filed to the Petition and clarifications given in above paras.
PSPCL has clarified in its parawise reply that the rebate of
1.50/kVAh or 1/kVAh was given inadvertently to some of the
open access consumers as there is no regulation issued by
PSERC in this regard. This inadvertently rebate given has now
been charged by PSPCL to the respective consumers.
PSPCL has prayed that its action to charge the Petitioner as per
tariff decided by the Commission, being just and equitable and
Petition being misconceived, be dismissed.
12.

The Petitioner filed counter reply dated 25.04.2015 (received on

30.04.2015) to the rejoinder filed by PSPCL. The Petitioner has
denied each and every content of the reply to the rejoinder
except the averments specifically admitted hereinafter. The
Petitioner has submitted that PSPCL has not brought out any
new argument in its counter reply to the rejoinder and simply
reiterated the earlier arguments which have already been replied
by the Petitioner in its rejoinder.
In reply to the main issues, the Petitioner has submitted that
PSPCL has failed to quote any provision of Electricity Act, 2003
and/or the PSERC Open Access Regulations empowering it to
levy ToD charge of 3/unit on open access power. The Tariff
Order passed by PSERC and PSPCL commercial instructions
nowhere indicate that ToD charge/rebate will be applicable on
open access power. PSPCL is wrongly and mischievously
equating the PLEC with ToD charge to justify the levy of ToD
charge on open access power and is trying to make two unequals
22

Order in Petition No. 3 of 2015

as equals without quoting any authority, regulation or section of

the Act. Section 61 is relating to power of appropriate
Commission and PSPCL is trying to usurp the functions of the
Commission by deciding the commercial principles of its own.
ToD tariff is more beneficial to PSPCL than to the consumer as it
gets better load curve as well as retains part of the savings also.
The points raised in the concluding para of the main issues by
PSPCL are without conviction and mischievously worded.
In parawise reply, the Petitioner has submitted that PSPCL has
accepted that peak load is brought on the grid by domestic,
commercial, essential services, railways etc. and not by LS
consumers. Despite this, to control the load, LS industries are
made to either stop or pay additional charges. Further, the
Petitioner has reiterated that during peak load hours in winter,
there is no transmission constraints for supplying power to the
consumers and Petitioner has never been refused permission for
peak load even in summer except that load is curtailed due to
shortage of power. The Petitioner has denied the fact that all
states in India levy PLEC.
In reply to other paras, the Petitioner has reiterated the same
reply as already given in its rejoinder that PSPCL has no
authority under any law to decide what is surcharge and what is
just like a surcharge, when the Honble Commission in its Tariff
Order has not declared it a surcharge for the purpose of open
access transactions.
13.

The Petition was taken up for hearing on 05.05.2015. After

hearing the arguments of the parties, further hearing in the matter
was closed and the order was reserved. The Petitioner and the

23

Order in Petition No. 3 of 2015

respondent PSPCL were ordered to file written submissions by

11.05.2015.
14.

The Petitioner has submitted written arguments vide its letter

dated 11.05.2015. The same grounds have been reiterated by
the Petitioner in the submissions as already submitted in the
Petition and the rejoinder, except that it has been submitted by
the Petitioner that PSPCL in its reply to the rejoinder has
categorically mentioned that the ToD is being charged as it
amounts to JUST A CHARGE, which is totally unwarranted and
unsustainable in the eyes of the law.

The term JUST A

SURCHARGE is no where defined in the Electricity Act 2003.

That even otherwise, terming the ToD charges to be JUST A
SURCHARGE is an afterthought of the PSPCL in order to cover
up its misdeeds, as there cannot be levy of Electricity Duty on a
surcharge. As per provisions of the Act, Electricity Duty can be
levied on the tariff component and not upon surcharge.
15.

PSPCL

vide

its

memo

dated

11.05.2015

(received

on

12.05.2015) has filed the written arguments. In addition to the

submissions made by PSPCL in its replies to the main petition
and rejoinder, it has been submitted by PSPCL as under:
(i)

For converting the open access power (being recorded in

kWh) into kVAh, the actual power factor (being recorded up
to four decimal places) during the month maintained by the
consumer may be used for the conversion. PSPCL
submitted that all over India, the power factor with rounding
upto two decimal places is being applied. This suggestion
that actual power factor be considered with 4 digit format
instead of 2 digit rounded format may lead to unnecessary
disputes in future as some other consumers may come with
24

Order in Petition No. 3 of 2015

the plea that 6 digit format may be considered. Accordingly,

in order to maintain uniformity, the 2 decimal digit format
(rounded) is the right approach. The contention of the
Petitioner that this method incurs loss to it is not correct as
at times the power factor recorded has any figure more
than 5 (i.e. 0.956), then the power factor taken for
calculation will be 0.96, which will benefit the consumer and
as such rounding to the desired decimal is standard
practice with loss at times and gain at other times to either
party which is averaged out in the long run & as such there
is neither any loss nor any benefit to either party.
(ii)

Regarding rebate of 1 per unit on consumption beyond

threshold limit, PSPCL submitted that the software is ready
and the rebate will be given in the bills issued after 7th June,
2015.

(iii)

PLEC is a kind of surcharge which is levied on consumers

to cover the cost of the excess transmission system laid to
cater to the demand of consumers during peak load hours.
The transmission system gets equally overloaded during
peak load hours whether power is drawn from PSPCL or
through Open Access by the Petitioner and as such there
can never be any difference to PSPCL power and open
access power for levy of PLEC charges.

(iv)

The plea of the Petitioner that PSPCL is not entitled to

charge 3 per kVAh on power drawn through open access
is not tenable. PSERC also while converting PLEC charges
charged on kVA demand sanctioned for use during peak
load hours to per unit charges has gone in for tariff neutral
approach. It is settled law that for extending any benefit to a
25

Order in Petition No. 3 of 2015

particular class of consumers, the tariff neutrality has to be

achieved within the same class of consumers. In case, the
contention of the consumer succeeds, then no power is
likely to be drawn from PSPCL during peak load hours due
to differential of 3 per unit & the entire revenue of 345
crores being recovered through PLEC has to be borne by
other category of consumers. The contention of the
consumer that no further surcharge can be levied on open
access power unless notified in Open Access Regulations
is not correct, as PLEC charges per kVA being levied
earlier is to arrest the peak and also to cover the cost of
maintaining higher level of transmission system to allow the
peak and as such has no connection with Open Access
Regulations but is part of ToD tariff. Further this tariff is
optional to the Petitioner.
(v)

In case, the contention of the consumer succeeds, then the

set of consumers who have opted for ToD tariff will not pay
PLEC charges on the power consumed from open access
during peak load hours whereas the other set of consumers
who had not opted for ToD tariff will continue to pay PLEC
charges for power consumed from open access during
peak load hours & thus two set of rules shall be applicable
for same category of consumers.

(vi)

In case the Petitioners contentions succeeds, there may

arise a situation when a consumer draws whole of its power
during night hours from open access only and respondent
PSPCL shall end up paying such consumers @ 1.50 per
unit i.e. PSPCL shall pay from its pocket without any
recovery from such consumers.
26

Order in Petition No. 3 of 2015

16.

In view of the submissions/arguments made by the parties, three

main issues raised by the Petitioner before the Commission, are
discussed and decided as under:(i) ToD charge on Open Access Power:
The submission by PSPCL that there will be loss of revenue to
the tune of 345 crore if the contention of the Petitioner not to
charge 3 per kVAh on the power purchased through open
access during peak load hours from 06.00 PM to 10.00 PM
succeeds, is wrong as (i) ToD tariff is applicable from 01.10.2014
to 31.03.2015 only and as such the Large Supply consumers are
liable to pay peak load exemption charges for the demand
allowed during peak load hours during the period 01.04.2014 to
30.09.2014; (ii) there will be income under PLEC system from
those consumers who have not opted for ToD tariff during the
period from 01.10.2014 to 31.03.2015 and (iii) there will be
additional income as a result of charging of 3/kVAh on the
power drawn by Large Supply consumers from PSPCL
generation. In the Trial Balance for the month of January, 2015,
PSPCL has shown income of about 224.60 crore from PLEC.
The Petitioner had opted for ToD tariff during FY 2014-15 and
PSPCL has levied 3 per kVAh on power purchased through
open access by the Petitioner during peak load hours from 06.00
PM to 10.00 PM. Regulation 10 (2) of the Punjab State Electricity
Regulatory Commission (Terms and Conditions for Intra-state
Open Access) Regulations, 2011, states that:
Subject to the provisions of these Regulations, the
licensees, generating stations, captive generating
plants and consumers shall be eligible for open access
to distribution system of a distribution licensee on
27

Order in Petition No. 3 of 2015

payment of the wheeling and other charges as may be

determined by the Commission in accordance with
Chapter 5 of the these regulations.
As per Chapter 5 of the ibid regulations, open access consumers
are liable to pay Transmission Charges, Scheduling and System
Operation

Charges,

Wheeling

Charges,

Cross

Subsidy

Surcharge and Additional Surcharge. There is no provision of

ToD charges to be levied upon power purchased through open
access by the Petitioner during peak load hours, in these
regulations.
Further, there is no provision in the General Conditions of Tariff
approved by the Commission for charging any additional
charge/surcharge of 3/kVAh on power purchased through open
access by the Petitioner during peak load hours from 06.00 PM to
10.00 PM.
Thus, PSPCL has wrongly charged 3 per kVAh on power
purchased through open access by the Petitioner during peak
load hours from 06.00 PM to 10.00 PM. PSPCL is directed to
refund the amount charged to the Petitioner on this account
through the subsequent energy bills. It is also clarified that no
rebate is admissible in respect of power purchased through open
access by the Petitioner/open access consumers during off peak
hours from 10.00 PM to 06.00 AM (next day).
(ii) To apply actual power factor with three or four digit
format to work out Open Access Power in kVAh.
PSPCL has submitted that it has already started issuing monthly
energy bills from February, 2015 onwards on the basis of
recorded monthly actual power factor. PSPCL has also submitted
that it is ready to make adjustments pertaining to the bills of
28

Order in Petition No. 3 of 2015

October, 2014 and November, 2014, in the bills to be issued in

March, 2015. PSPCL has further submitted that using 4 digit
format instead of two digit format may lead to unnecessary
disputes in future and if, the Commission consider the plea of the
Petitioner, PSPCL shall abide by it.
PSPCL is calculating power factor upto 2 decimal figures for all
intents and purposes. As such, PSPCL shall amend the bills of
the consumers on the basis of average power factor (rounded
upto 2 (two) decimal figures) worked out as the ratio of active
energy (in kWh) to total energy (in kVAh) supplied to the
consumer during the billing period.
(iii) To work out the threshold consumption for eligibility of
rebate of 1 per unit.
The Commission in the Tariff Order for FY 2014-15 approved
rebate of 1/kWh (or kVAh) on the category wise tariffs for all
categories, except street lighting and AP categories, on
consumption exceeding threshold limit during the financial year.
PSPCL in its reply dated 09.03.2015 to the Petition had
submitted that the updation of billing software for calculation of
threshold limit/target is under process. PSPCL in the meeting
held on 10.03.2015 with regard to implementation of Tariff Order
for FY 2014-15 had intimated that the software for allowing the
rebate as per orders of the Commission has been developed and
rebate will be given in the consumer bills to be issued for March,
2015. However, PSPCL in the written arguments submitted that
the software is ready and the rebate will be given in the bills to be
issued after 7th June, 2015. The Commission observes that
PSPCL is willing to allow this rebate to the consumers but it has
taken more than 8 months to develop the software for this
29

Order in Petition No. 3 of 2015

purpose. This delay should have been avoided by PSPCL by

taking timely action in the interest of the consumers. PSPCL is
directed to complete the job of allowing admissible rebate to the
consumers in the immediate billing cycle after issuance of this
Order. Compliance report will be submitted to the Commission
within two months of the issue of the Order.
The above orders of the Commission shall apply to all
similarly placed consumers.
The Petition is disposed of accordingly.
Sd/(Gurinder Jit Singh)
Member

Sd/(Romila Dubey)
Chairperson

Chandigarh
Dated: 20.05.2015

30