IN THE APPELLATE TRIBUNAL FOR ELECTRICITY (Appellate Jurisdiction)

APPEAL No. 362 OF 2017 Dated: 28.05.2025 Present: Hon’ble Mr. Sandesh Kumar Sharma, Technical Member Hon’ble Mr. Virender Bhat, Judicial Member IN THE MATTER OF:

Federation of Karnataka Chambers of Commerce and Industry (FKCCI), Federation House, K.G. Road, Bangaluru – 560 009 … Appellant VERSUS

1. Karnataka Electricity Regulatory Commission

6^th & 7^th Floor, Mahalakshmi Chambers, 9/2, MG Road, Bangaluru – 560 001.

(Represented by the Secretary)

2. Bangalore Electricity Supply Company S7 Sub Division, Old Airport Road, Bengaluru, Karnataka -560017.

(Represented by the Managing Director)

…Respondents Counsel for the Appellant(s) : Mr. Ananga Bhattacharyaa Mr. Mukund P. Unny Ms. Devahuti Tamuli Mr. Rohit Rao. N Counsel for the Respondent(s) : Mr. Anand K Ganesan Ms. Ritu Apurva for R-1 Mr. Shahbaaz Husain Mr. Fahad Khan Mr. V. M. Kannan for R-2

JUDGEMENT

PER HON’BLE MR. SANDESH KUMAR SHARMA, TECHNICAL MEMBER

1. The instant Appeal has been filed by the Appellant i.e., Federation of Karnataka Chambers of Commerce and Industry (in short “Appellant” or “FKCCI”) against the order dated 11.04.2017 (in short “Impugned Order”) passed by the Karnataka Electricity Regulatory Commission (in short “Respondent No. 1” or “KERC” or “Commission”) disposing of the Application of Bangalore Electricity Supply Company Limited (in short “BESCOM”) in respect of the Annual Performance Review for Financial Year 2016, Revision of Annual Revenue Requirement for Financial Year 2018 and Revision of Retail Supply Tariff for Financial Year 2018, under Multi Year Tariff Framework.

Description of parties

2. The Appellant, Federation of Karnataka Chambers of Commerce and Industry, is a not-for-profit Company at present, under the provisions of the Companies Act, 2013. The Appellant is an apex organization established to give a common voice to the interests and concerns of the Industry, Trade & Service sectors in Karnataka.

3. The Respondent No.1 is the Karnataka Electricity Regulatory Commission, having issued the impugned order.

4. The Respondent No. 2, the Bangalore Electricity Supply Company (BESCOM), is a distribution licensee for 8 districts in the State of Karnataka under the provisions of the Electricity Act, 2003.

Factual Matrix of the Case

5. The Bangalore Electricity Supply Company Ltd. (BESCOM) and Mangalore Electricity Supply Company (MESCOM), both distribution licensees under the Electricity Act, 2003, submitted applications for the review of annual performance for FY 2015-16, approval of the revised ARR for FY 2017-18, and approval for the retail supply tariff for FY 2017-18.

6. On 18.02.2017, objections were filed by the Appellant against these petitions, highlighting several issues. The Government of Karnataka, through G.O. No EN 131 PST 2003 dated 10.05.2005, transferred the power trading rights from Karnataka Power Transmission Corporation Limited (KPTCL) to five distribution licensees, including BESCOM and MESCOM. Existing power purchase agreements (PPAs) were reassigned accordingly.

7. The Appellant argued that the subsequent state notifications on power allocation violated Section 131 of the Electricity Act, 2003. The Appellant contended that assigning high-cost energy PPAs disproportionately to BESCOM and MESCOM led to higher procurement costs and consumer prejudice.

8. The State Commission, under Section 86(1)(b) of the Electricity Act, 2003, is the appropriate authority for such allocations. Despite BESCOM and MESCOM having the lowest cost of supply, their tariffs were among the highest, violating Sections 61(e) and 61(g) of the Electricity Act, 2003. The commission allegedly failed to adopt a rational tariff determination method.

9. The increase in fixed charges for various consumer categories, without prior proposals or consumer input, was highlighted as a violation of natural justice and Section 64 of the Electricity Act, 2003.

10. The Appellant pointed out discrepancies in the review, par