CONSUMER
HAS THE OPEN ACCESS TO CHOOSE DISTRIBUTER/SUPPLIER FOR ELECTRICITY SUPPLY
In the matter of Brihan Mumbai Electricity Supply & transport under
taking Versus Maharashtra Electricity Commission (MERC) & others Civil
Appeal No. 4223 of 2012 in the Supreme Court of India,decided on 8 May, 2014 BEST (Brihan Mumbai Electricity
Supply & transport known as BEST) is a licensee for electricity supply to
the public at large. Tata power also has
the license to supply electricity in the same area. The unit rate of
electricity of BEST was 100% more than the unit rate of Tata-power. One Mr.
Guru Prasad Shetty who is a restaurant owner was the customer of BEST. He
wanted to switch over to Tata power to save on electricity bills. Tata power
asked the consumer to get NOC from BEST for allowing Tata Power to give electricity connection. BEST refused to give
NOC on the ground that they are a “local authority under the Electricity Act
and hence in their area nobody can supply electricity to retail customers
Mr Guru Prasad approached Maharashtra Electricity Regulatory Commission
who after getting convinced with the consumer, directed Tata Power Company to
create its own infrastructure for giving electricity to the consumer.since BEST
refused to give NOC to get the power
from his set up/infrastructure. BEST went in appeal to Electricity Appellate
tribunal and challenged the directions of the Maharashtra Electricity
Regulatory Commission. Appellate Tribunal for Electricity also confirmed the
order of the MERC and decided in favour of the consumer. BEST again filed an
appeal before the Hon’ble Supreme Court of India.with the following points –
a)The Regulatory Commission did not have the jurisdiction to entertain a
dispute between the consumer and a distribution licensee;
(b) TPC was not a deemed
distribution licensee for the area in question and therefore was not entitled
to give connection to consumer in the area
c) TPC could not extend its network in BEST area of supply, without
BEST’s consent and agreement.
Advocate for the consumer Mr. Guru Prasad Shetty argued that Tata-power
has to adhere to its universal supply obligation. It cannot run away from the
responsibility of establishing their own infrastructure in the license area and
supply electricity to the customers. Advocate for complainant further argued
that if the monopoly of BEST is allowed it defeats the objective of the Act to
create competition among the electricity suppliers.
One more question was also raised
on the point of jurisdiction qua Maharashtra Electricity Regularity Authority
to deal with the subject when there is a provision of consumer forums Consumer
Grievances Redressal Forum (CGRF) established under Section 42 (5) of the
Act.established by each distributing agency Here in this case ,Guru Prasad
had approached the Regulatory Commission
to enforce a distribution licensee obligation under the Act. As on that date,
he was not the consumer of TPC but wanted to become its consumer. In so far as
CGRF is concerned, which each distribution licensee is required to set up under
Section 42 (5) of the Act, it deals with the grievances of the consumer.
Hon’ble Supreme Court Bench comprising Hon’ble Justice Mr. Surinder
Singh Nijjar and Mr. A. K. Sikri by a detailed Judgment dated 08.05.2014
accepted the contentions of Mr. S. Ravi Shankar and dismissed the appeals Civil
Appeal No.4223 of 2012 filed by M/S. Brihan Mumbai Electricity Supply &
transport under taking (BEST) and upheld the rights of the retail electricity
consumers to choose the electricity supplier on the basis of the service
quality and price.
Law point is –
Section 42 (3) of the Act
When an application is made by a consumer to a distribution licensee for
supply of electricity, such a distribution licensee for supply of electricity,
can request other distribution licensee in the area to provide it network to
make available for wheeling electricity to such consumers and this open access
is to be given as per the provisions of section 42 (3) of the Act.
Sec 43 0f the act –
If in a particular area local
authority has its network and it does not permit wheeling of electricity by
making available its network, the other distribution licensee will have to
provide the electricity from its own network. For this purpose, if it is not
having its network, it will have to lay down its network if it requires in
order to supply electricity to a consumer seeking supply.
This is the provision to provide open access in transmission from the
outset. The provision of open access to consumers ensures right of the consumer
to get supply from a person other than the distribution licensee of his area
and can take supply under section 43 of the Act.
But consumers/suppliers who have
been allowed open access under Section 42 (by getting NOC from the local
supplier) ,may enter into an agreement with any person for supply of
electricity on such terms and conditions, including tariff, as may be agreed
upon by them under Section 49 of the Act
National Electricity Policy (Paragraph 5.4.7) stipulates that the second
licensee in the same area shall have the obligation to supply to all consumers
in accordance with Section 43.
Reported earlier cases
Chandu Khamaru v. Nayan Malik reported in (2011) 12 SCC 314:
“These provisions in the Electricity Act, 2003 make it amply clear that
a distribution licensee has a statutory duty to supply electricity to an owner
or occupier of any premises located in the area of supply of the distribution
licensee, if such owner or occupier of the premises applies for it, and correspondingly
every owner or occupier of any premises has a statutory right to apply for and
obtain such electric supply from the distribution licensee.”
In Tata Power Co.Ltd. v. Reliance Energy Ltd. & Ors.(2008) 10 SCC
321, this Court gave due recognition to objective behind the Act viz. to
promote competition and give the consumer open to choose the distribution
licensee from which it seeks electricity as is clear from the following
paragraphs:
“in our view, the provisions of both the 1903 and 1910 Electricity Acts
encourage competition in the electricity trade and the same is also
incorporated in the licences issued in favour of the distribution licensees,
which also include licensees generating power for supply. The element of
competition has been included in the Preamble to the 2003 Act and permeates the
same in its various provisions.”
By Dr Prem Lata
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