- (1.)THIS petition has been filed by Power System Operation Corporation Limited (POSOCO) for invoking Regulation 29 "Power to Relax" for relaxation of Regulation 9 (2) of the Central Electricity Regulatory commission (Fees and charges of Regional Load Despatch Centre and other related matters) Regulations, 2009 (hereinafter referred to as 'the RLDC Fees and Charges Regulations') to allow the petitioner to utilize other income of the National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs) a for meeting the shortfall in the Human Resource expenses subject to the truing up after expiry of the control period. The petitioner has further requested to allow NLDC and RLDCs to deposit the fees and charges collected against return on equity, depreciation, interest on loan and other income to LDC Development Fund after meeting the statutory tax requirements as per the provisions of the Income Tax Act, 1961. The petitioner has submitted that in line with Regulation 16 of the RLDC fees and charges Regulations as amended vide notification dated 28.3.2011, the Human Resource (HR) expenses have been rationalized after considering 50% increase in employee cost on account of pay revision of the employees of the PSUs to arrive at the permissible HR expenses for the year 2009 -10. The petitioner has further submitted that though Regulation 16 of the RLDC Fees and Charges Regulations allows only 50% increase in wage revision, the actual impact of wage revision is much higher after implementation of pay revision of the employees in the line with the Department of Public Enterprises guidelines issued by the Ministry of Power. The Commission in its various orders had approved HR expenses for the year 2011 -12 as Rs. 62.65 crore for an approved manpower of 472 whereas the actual HR expenses of NLDC and RLDCs for the year 2010 -11 are Rs. 78.52 crore with a manpower strength of 445 employees. It has also been submitted that as per accounting practice of POSOCO, the provisions were made in previous years towards the wage revision of the executives and non -executives. These arrears were adjusted in the years 2009 -10 and 2010 -11. Similarly, the provisions were made towards the incentives Performance Related Pay (PRP) also and adjusted as per the actual in subsequent years. The petitioner has submitted the comparison of HR expenses approved by the Commission and the actual HR expenses as under:
(2.)THE petitioner has submitted that the shortfall for meeting the expenses of existing manpower is Rs. 15.98 crores for the year 2010 -11. Due to the shortfall in meeting the HR expenses of existing manpower, it would be difficult to deploy the extra manpower during the control period which has been approved by the Commission. The petitioner has submitted that the NLDC and RLDCs have other sources of income such as registration fee, application fee, short term open access charges for scheduling of bilateral and collective transactions under short term open access in accordance with Central Electricity Regulatory Commission (Open Access in inter -State Transmission) Regulation, 2008, and income such sources is deposited to LDC Development Fund in accordance with Regulation 9(2) of RLDC Fees and Charges Regulations. The petitioner has submitted that in order to address the issue of meeting the shortfall in HR expenses without having to immediately revise the RLDC fees and charges, the petitioner be allowed meet the shortfall from other income and deposit the balance amount in LDC Development Fund. The amount so utilized shall be deposited in the LDC Development Fund after truing up exercise in accordance with Regulation 5 of RLDC Fee and Charges Regulations. The petitioner has prayed for invoking Regulation 29 "Power to Relax" for relaxation of Regulation 9(2) of RLDC Fees and Charges Regulation in order to allow RLDCs and NLDC to deposit the receipts from other income in the LDC Development Fund after meeting the shortfall in HR expenses subject to truing up after the control period.
The petitioner has submitted that the charges on account of return on equity, depreciation, interest on loan and other income of NLDC and RLDCs are required to be transferred to LDC Development Fund in accordance with Regulation 9 of RLDC Fees and Charges Regulations. Transfer of income of RLDCs and NLDC to the LDC fund is being done after payment of income tax. During the audit of accounts of POSOCO for the financial year 2010 -11, the statuary auditors have made observations with respect to the absence of provisions in the RLDC Fees and charges Regulations regarding deduction of income tax before transferring money to the LDC Development Fund and have suggested for making appropriate provisions in the Regulations to take care of the tax liability. The petitioner has prayed that transfer to the LDC Development Fund may be allowed after meeting the statutory requirements of the Income Tax Act.

IA 16/2012

(3.)THE petitioner has filed the Interlocutory Application 16/2012 invoking Regulation 29 for relaxation of Regulation 9(3) of RLDC Fees and Charges Regulations for utilisation of LDC Development Fund for activities under Corporate Social Responsibility (CSR) and Sustainable Development (SD) in accordance with the Department of Public Enterprises (DPE) Guidelines applicable to all Central Public Sector Enterprises (CPSEs). The petitioner has submitted that in accordance with the directives of DPE, all CPSEs (Holding as well as Subsidiaries), without exception, are required to sign Memorandum of Understandings (MoUs); while the Apex/Holding companies are mandated to sign MoUs with their administrative Ministries/Departments, the Subsidiary companies are required to sign MoUs with their respective Apex/Holding companies on the same lines as MoU signed between a CPSE and Government of India. Every year DPE notifies the guidelines on the MoUs which are to be followed by all the CPSEs. The guidelines also include mandatory activities under Corporate Social Responsibility (CSR), Sustainable Development (SD) and Research & Development (R&D) which have to be carried out by the CPSE or its subsidiary company by incurring a specified percentage of its profit after tax on such activities. The petitioner has submitted that POSOCO signed its maiden MoU with its Holding Company, PGCIL for 2011 -12 in March, 2011. Since the POSOCO had commenced its operations from 1.10.2010, DPE had permitted exclusion of CSR, SD and R&D activities for 2011 -12 and accordingly, these activities were not included in the MoU for 2011 -12. However while approving the MoU for 2012 -13, DPE has approved inclusion of CSR, SD and R&D activities. The petitioner has submitted that since all its income including profit are credited to the LDC Development Fund as per the RLDC Fees and Charges Regulations, it may be permitted to utilize the LDC Development Funds to meet the mandatory expenditure on CSR, SD and R&D under the MoU by invoking Regulation 29 "Power to Relax" for relaxation of Regulation 9(3) of RLDC Fees and Charges Regulations.