ATE's verdict says TPC to refund Rs 354 cr to REL

New Delhi, Dec 20: Appellate Tribunal for Electricity (ATE) today delivered the final judgement, with a majority decision of 2-1 in favour of Reliance Energy Ltd (REL), in the standby charges issue and ordered Tata Power Corporation (TPC) to refund Rs 354 crore to REL.

The judgement has turned down TPC's demand to get Reliance Energy to share half the stand-by charges it pays to state utility MSEB for ensuring uninterrupted power in Mumbai during an emergency.

The order allows REL to claim the refund of Rs 354 crore paid by REL as standby charges for electricity supply in Mumbai.

The ATE has allowed Tata Power Corporation 30 days to comply with the order.

The decision brings reprieve for REL's subscribers who would have otherwise ended up paying a higher tariff.

TPC and REL have been engaged in a long winding legal battle over sharing of stand-by charges since 1998. TPC, which pays Rs 396 crore to MSEB every year for this, has been asking REL to share 50 per cent of the cost.

The case went to the tribunal after TPC declined to accept an order by the Maharashtra Electricity Regulatory Commission (MERC) allowing collection of only 23 per cent stand-by charges from REL.

After a split judgement by a two-member division bench at ATE, the case was referred to a third member who, in turn, had decided that TPC cannot collect 50 per cent stand-by charges from REL, as TPC already recovers majority of the stand-by charges paid to MSEB through the tariff passed on to consumer.

REL paid Rs 354 crore to TPC as its share of standby charges for the period from 1998 to 2004. TPC will have to refund this amount with an interest component of 10 per cent from April 2004.

UNI