Hyderabad: In an order that will have a bearing on Electricity Regulatory Commissions across the country, the Supreme Court upheld the provision in the AP Electricity Reform Act 1998 for levying Fuel Surcharge Adjustment (FSA), which is collected from consumers in addition to fixed tariff for consumption of power.
A two-member Bench comprising Justice V. Gopala Gowda and Justice Arun Mishra of the apex court, while dismissing more than 300 appeals moved by Sai Bhaskar Iron Ltd and others, ruled that though the “Fuel Surch-arge” has not been defin-ed in the 1998 Act or the 2004 Act, the Commis-sion had power under Section 26(2) to prescr-ibe the terms and conditions for determination of the licensees’ revenue and tariffs.
Section 26(9) enables the Commission to vary fuel surcharge which is to be determined as per the formula prescribed by regulations.
While upholding the FSA provision, the Bench directed that the appellants make the deposit along with interest — if no other rate is prescribed then at the rate of eight per cent per annum — and other charges for delay, as may be permissible to recover, within one month from Monday. It also said that the respondents were at liberty to take coercive steps to recover the dues.
“It is pertinent to note that under the Act of 2003, the Commission has adjudicatory, legislative as well as advisory powers. Under Section 61(d), it has to frame the conditions with regard to safeguarding of consumers’ interest and at the same time, recovery of the cost of electricity in a reasonable manner,” stated the Bench.
The appellants contended that the provision for levying FAS ultra vires as the 1999 rules as amended in 2003 being the tariff regulation under 1998 Act, ceased to have effect on June 10, 2004, one year after the Act of 2003 came into force.
