IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL NO. 80 OF 2024 & IA NO. 323 OF 2024 Dated: 5^th August, 2024 Present: Hon’ble Mr. Justice Ramesh Ranganathan, Chairperson Hon’ble Smt. Seema Gupta, Technical Member (Electricity)

In the matter of:

DAMODAR VALLEY CORPORATION Through its Executive Director (Commercial, DVC Headquarters, DVC Towers, VIP Road Kolkatta – 700054. … Appellant(s)

VERSUS

1. JHARKHAND STATE ELECTRICITY REGULATORY COMMISSION Through its Secretary, 1^st Floor, Jharkhand State Housing Board, Old Building, Harmu Housing Colony, Ranchi, Jharkhand - 834002 ... Respondent No.1

2. ASSOCIATION OF DVC HT CONSUMERS OF JHARKHAND Through its Joint Secretary, Kalyani Apartment, 1^st Floor, Gandhi Chowk, Giridih – 815301, Jharkhand ... Respondent No.2 Counsel on record for the Appellant(s) : Shri Venkatesh Ashutosh Kumar Srivastava Shryeshth Ramesh Sharma Bharath Gangadharan Nihal Bhardwaj Abhishek Nangia Siddharth Nigotia Shivam Kumar Kartikay Trivedi Mohit Gupta Manu Tiwari Aashwyn Singh Punyam Bhutani Harsh Vardhan Suhael Buttan Priya Dhankar Himangi Kapoor Anant Singh Vineet Kumar Aditya Tiwari Nehal Jain Nikunj Bhatnagar Kunal Veer Chopra Vedant Choudhary Counsel on record for the Respondent(s) : Aditya Kumar Choudhary for Res.1 Rajiv Yadav for Res.2

J U D G M E N T

PER HON’BLE MR. JUSTICE RAMESH RANGANATHAN, CHAIRPERSON The present Appeal is filed against the order passed by the Jharkhand State Electricity Regulatory Commission (“JSERC” for short) in Case (Tariff) No. 01 of 2023 dated 22.01.2024. The Petition, in Case (Tariff) No. 01 of 2023, was filed by the Appellant herein seeking approval of true-up for FY 2021-22, Annual Performance Review for FY 2022-23, and Aggregate Revenue Requirement & Tariff for FY 2023-24 for distribution of electricity in the Appellant’s licensed area in the State of Jharkhand.

I. CONTENTS OF THE IMPUGNED ORDER TO THE EXTENT IT RELATES TO DETERMINATION OF THE NON-TARIFF INCOME OF THE APPELLANT:

In the impugned order, the Commission recorded the summary of Aggregate Revenue Requirement for FY 2021-22 as approved in the MYT Tariff Order dated 30.01.2023 vis-à-vis the claim by the Petitioner wherein the non-tariff income under the MYT Order was shown as 26.84 crores and, in the Petition, as 48.47 crores. While considering the cost tariff income and noting that the petitioner had claimed Rs.48.47 crores towards non-tariff income for FY 2021-22, the Commission observed, among others, that no adjustment of non-tariff income attributable to the Appellant’s Generation and Transmission had been undertaken in the input cost for the FY 2019-24 as well as the period prior to it; such non-tariff income ultimately impacts the end consumers (i.e., Retail consumers of Jharkhand) as the cost for the Generation and Transmission business becomes the input cost which drives up the retail ARR/ Tariff; since Section 61 of the Electricity Act, inter alia, only mandates reasonable recovery of cost, it was necessary that the entire non-tariff income as per the audited accounts should be adjusted in the retail supply tariff of Jharkhand; thus consumer interest in terms of Section 61, needs to be safeguarded by providing for the legitimate deductions in the ARR as per the regulatory framework in place; and, accordingly, the entire non-tariff income as per the Audited Accounts was being approved.

With regards non-tariff income of the appellant, the impugned order records as under:-

Non-Tariff Income Petitioner's Submission

5.40 The Petitioner has claimed Rs. 48.47 Crore towards Non-Tariff Income for FY 2021-22.

Commission's Analysis

5.41 The Commission has observed that the value claimed by the Petitioner as Non-Tariff Income is restricted to the Delayed Payment Surcharge (DPS) by firm consumers of DVC distribution licensee.

5.42 The Commission in its order on True-up from FY 2006-07 to FY

2013-14 and APR for FY 2014-15 dated 19.04.2017, has observed as shown below-

5.51 The Commission observed that the Pet