- (1.)IT was noticed from the report of Southern Regional Load Despatch Centre that an amount of Rs. 29.00 crore including surcharge was outstanding against the Tamil Nadu Generation and Distribution Company Ltd. (TANGEDCO) on account of arrears of Unscheduled Interchanges (UI) charges as on 31.5.2011. The Commission in its order dated 12.7.2011 had directed First and Second respondents to show cause under Section 142 of the Electricity Act, 2003 for non -compliance of the provisions of the Central Electricity Regulatory Commission (Unscheduled Interchange charges and related matters) Regulations, 2009 (hereinafter referred to as ' UI regulations). The Commission in its order dated 21.10.2011 had directed as under:
6. We note with concern that some of the constituent States have not understood the UI mechanism in its correct perspective. Any constituent utility drawing power from the grid over and above its schedule is getting the power at the cost of other constituents. Consequently, it is under obligation to make prompt payment for consuming the power, which legitimately belongs to other constituents. By not making prompt payment for the power drawn under UI, the first respondent has not only deprived the other constituents of their legitimate UI dues, but has created impediments in the operation of the commercial mechanism. The respondents have therefore, clearly violated the provisions of Regulation 10 of the UI regulations. Accordingly, we impose a penalty of ' one lakh on the first respondent under Section 142 of the Act which shall be deposited within 15 days from the date of issue of this order.

7. We further direct the second respondent to ensure that the outstanding dues including current UI dues are liquidated by 31.10.2011. If the outstanding UI dues are not liquidated on or before 31.10.2011, we direct the second respondent to personally appear before us on 15.11.2011 to explain the reasons for non -compliance with the provisions of UI regulations and our directions in this order.

(2.)DURING the course of hearing on 15.11.2011, the learned counsel appearing for the respondents had submitted that the respondents had deposited the outstanding UI dues along with the penalty imposed by the Commission. We had during the hearing on 21.10.2011 issued direction for personal appearance of Chairman -cum -Managing Director of TANGEDCO on the next date of hearing to understand the reasons for persistent default in making UI charges payments and to share our concern about the consequences of such default on the grid discipline.
Shri Rajeev Ranjan, Chairman and Managing Director of TANGEDCO along with Shri S. Vallinayagam, Advocate, appeared before the Commission on 22.12.2011. Shri Rajeev Ranjan submitted as under:

(a) All payments towards UI charges including surcharge due to TANGEDCO has been paid to the UI Pool Account;

(b) TANGEDCO has filed a petition before Tamil Nadu Electricity Regulatory Commission (TNERC) for comprehensive revision of the power tariff in the State of Tamil Nadu including request for tariff corrections for over a period of last 10 years. The petition has been admitted by TNERC. It is expected that after the tariff is determined by the TNERC, such a situation would not arise in future;

(c) The planning for the ensuing summer is a tough job as erstwhile Tamil Nadu Electricity Board has an accumulated loss of around Rs. 50,000 crore and banks and financial institutions were not forthcoming for the loans due to general negative sentiments in regard to power sector;

(d) TANGEDCO had never defaulted on the payment of UI charges before, 2010. It was not intentional but have been forced on resulting in default in UI payments;

(e) TANGEDCO is working on multitudes of programmes to address the issue faced by it;

(f) With regard to existence of a planned load shedding scheme and implementation of the Automatic Demand Management Scheme as mandated in the Indian Electricity Grid Code, TANGEDCO has a planned rotational load shedding which sheds load in rotation in the cities and suburbs and due to the huge demand and supply gap, the same is not effective.

(3.)WE have heard Shri Rajeev Ranjan, Chairman and Managing Director of TANGEDCO. It has been submitted that the power available with TANGEDCO from various sources is insufficient to meet the consumer load in the State and therefore, TANGEDCO is overdrawing from the grid and further TANGEDCO was unable to procure power through Power exchanges due to transmission constraints. As regards the default in payment, it has been submitted that due to non - revision of tariff of the distribution company, TANGEDCO is facing acute financial crunch which has resulted in default in payment of the UI charges.