TAMIL NADU ELECTRICITY OMBUDSMAN 19- A, Rukmini Lakshmipathy Salai, (Marshal Road), Egmore, Chennai – 600 008.

Phone : ++91-044-2841 1376 / 2841 1378/ 2841 1379 Fax : ++91-044-2841 1377Email : tnerc@nic.in Web site : www.tneo.gov.in

BEFORE THE TAMIL NADU ELECTRICITY OMBUDSMAN, CHENNAI

Present : Thiru. A. Dharmaraj, Electricity Ombudsman

Appeal Petition No.83 of 2015

Thiru. V.B.R. Menon,Advocate,Flat No.4B, Brook Dale Apartment,No.12, P.T. Rajan Salai,K.K. Nagar,Chennai – 78. … Appellant (Rep by Thiru. V.B.R Menon)

Vs

The Asst. Exe. Engineer/O&M,Porur,Chennai Electricity Distribution Circle/South,TANGEDCO,Porur 110 KV SS Complex,Kundrathur Road, Porur, Chennai – 116. . . . . .Respondent

Date of hearing : 19.1.2016 & 26.2.2016Date of order : 29-4-2016

The petition dated 12-10-2015 filed by Thiru. V.B.R. Menon, K.K. Nagar was

registered as appeal petition No.83 of 2015. The above appeal petition came up for

hearing before the Electricity Ombudsman on 19-1-2016 & 26.2.2016. Upon perusing

the appeal petition of the Appellant, written arguments of the Appellant and the

1

Respondent and after hearing both sides, the Electricity Ombudsman passes the

following order.

ORDER1. Prayer of the Appellant

The Appellant prayed for the refund of the low power factor levies of Rs.30134/-

collected from him.

2. Brief History of the case2.1 The service connection No.324-009-320 was effected in the name of Thiru.

V.B.R. Menon. The Service was effected under tariff IIIB.

2.2 Thiru. V.B.R. Menon the Appellant herein has filed a petition before the CGRF of

Chennai EDC/South for refund of the capacitor compensation charges collected in SC

No.324-009-320 for the period from 22.6.2013 to 20.6.2015 stating that the connected

load during the above period is not more than 10 KW.

2.3 The CGRF has not given any order on the above petition though it has indicated

the above grievance also in the case of petition while giving its order on other

grievances on another complaint filed on 20.6.2015.

2.4 As more than 50 days have passed since submission of petition to CGRF of

Chennai EDC/South, the petition dt.12.10.2015 was registered as appeal petition No.83

of 2015.

3. Contentions of the Appellant furnished in the appeal petition :

3.1 He had submitted a complaint No.CGRF.90/D.1366/15 in Annexure-I dated

22.6.2015 to the consumer grievance redressal forum through speed post on 23.6.2015,

2

seeking refund of low power factor penalty amounts collected and the same have been

acknowledged by the CGRF on 24.6.2015.

3.2 Prior to the above complaint, he had submitted another complaint

No.CGRF.90/1034/15 on 20.6.2015 seeking relief in respect of different grievances.

Even though no hearing notice has been received against the above complaint till date,

the CGR Forum appears to have disposed of both the complaints through the undated

single order.

3.3 While going through the above undated order by the CGR Forum, it is notice that

the CGR forum has failed to pass an order on my complaint no.CGRF.90/D.1366/15

dated 22.6.2015 even though his prayer in the above complaint has been stated in the

narration part of the case of the petitioner in page 3 of the order. The CGR forum has

passed the above order only against his earlier complaint No.CGRF.90/D.1034/15

dated 20.6.2015, even though the hearing notice dated 19.8.2015 refers to his

subsequent complaint No.CGRF.90/D.1366/15, dated 22.6.2015.

3.4 Even though the connected load the premises was never above 10 KW since the

date of energisation of supply, Low Power Factor levies have been collected al along

from the consumer on the basis of sanctioned load against the statutory provisions.

3.5 Low Power Factor penalty is leviable for LM-IIIB category of services only when

the connected load is above 18.6 KW (25HP) as per Rule No.6.9(ii) of the TNERC Tariff

order datd 11.12.2014 as well as rule 10.9.2 of TNERC tariff order dt.30.3.2012 low

power factor penalty is not payable on the basis of sanctioned load.

3

4 Contentions of the Respondent furnished in the counter affidavit :

4.1 The petitioner herein has sought for relief from the Electricity Ombudsman for

refund of low power factor levies collected from him for the period between 22.6.2013 to

20.6.2015.

4.2 In this context it is stated that as per regulation 4(1)(iii) of the TNE Supply Code,

the disincentive for power factor is as below :

Every consumer shall maintain a power factor.

in case of LT supply of 0.85 and

in case of HT supply of 0.90

failing which he shall be liable to pay compensation by way of disincentive at such rates

as the Commission may declare from time to time.

4.3 Corresponding to the above regulation, the quantum of compensation by way of

disincentive has been levied by TANGEDCO based on the tariff order issued by the

Hon’ble TNERC.

4.4 As per the latest tariff order in SMT order No.9 of 2014 dated 11.12.2014

(effective from 12.12.2014) the low power factor compensation has been detailed under

general provision clause 6.9(ii) of the order as below :

(ii) In case of LT tariff III-B and LT tariff V, all services with a connected load 18.6 KW

(25HP) and above should maintain a power factor of not less than 0.85 where the

average power factor of low tension service connection is less than the stipulated limit

of 0.85 the following compensation charges will be levied.

4

Power Factor Dispensation of power factor compensation Below 0.85 and upto 0.75

One per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85.

Below 0.75 One and half per cent of the current consumption charges for every reduction of 0.01 in power factor from 0.85

4.5 Whenever the power factor has gone below 0.85 the consumer has been

charged the disincentive for power factor only as per the tariff order of the Hon’ble

Commission.

4.6 As per the regulation 2(1)(i) of the TNE Distribution Code “ contracted load”

means the load specified in the agreement between the consumer and the licensee

engaged in the business of supplying electricity to him.

4.7 As per regulation 2(1)(h) “connected load “ means the aggregate of the

manufacturer’s rating of all equipment’s connected to the consumer installation and of

all portable equipment’s and also the capacity of the power source required to test

manufactured products and repaired equipment in the installation.

4.8 Unless the extent of machinery/equipment is available at the consumer

premises to the level of 32 kw, the petitioner could not have made payment towards the

fixed charges for the 32KW. This clearly evidences the fact, that the petitioner’s

connected load was equal to the contacted demand which is 32 kw.

4.9 Therefore, on conjoint reading of regualtion4(1)(iii) of Supply Code and para

6.9(ii) of the Tariff order dated 11.12.2014, whenever the petitioner’s power factor goes

below 0.85, the petitioner is liable to make payment towards the disincentive for power

factor.

5

4.10 it is very appropriate to point out that during the reduction in load on 30.6.2015,

the consumer meter has been replaced with meter capacity of (10-60) amps. Prior to

this change of meter, the consumer had been provided with a meter capacity of (100-

120) amps. This adds to the fact that the consumer had a connected load to the extent

of contracted demand of 32 kw.

4.11 For the reasons elaborated above, the levy of disincentive from power factor

during the period between 22.6.2013 to 20.6.2015 is as per the provisions of tamil nadu

electricity Supply Code and the tariff order.

4.12 It is further pointed out that the consumer had been maintaining the power factor

the range of 0.27 to 0.53 during the above said period which is very much lower than

the bench mark power factor of 0.85.

5. Hearing held by the Electricity Ombudsman

5.1 To enable the Appellant and the Respondents to putforth their arguments in

person, a hearing was conducted before the Electricity Ombudsman on

19.1.2016 & 26.2.2016.

5.2 Thiru. V.B.R. Menon, the Appellant herein has attended the hearing and putforth

his arguments.

5.3 Thiru. P. Naresh Babu, Assistant Executive Engineer/O&M/Porur the

Respondent herein has attended the hearing and putforth his side arguments.

6

6. Arguments putforth by the Appellant on the hearing dates

6.1 Thiru V.B.R. Menon has reiterated the contents of the appeal petition.

6.2 The Appellant informed that the said service was effected on 27.8.1998 and used

for manufacture of automobile parts.

6.3 The Appellant has also furnished the written submission on the hearing date

besides the oral submission. As the written submission covers the oral

submission also, the arguments, given in the written submission are furnished

below :

(i) The Respondent has admitted in his Counter Affidavit that

'Low power factor penalty' is payable only when "the connected load"

of the Consumer is above 18.6 KW (25 HP). Hence, the only issue to be

decided in the above Appeal Petition is whether the Connected load of

the Service connection No: 324-009-320 during the relevant period

from 22.06.2013 to 20.06.2015 was less than the above prescribed limit

of 18.6 KW or not. The CGRF had avoided to make any observation or

finding on the above issue of Low P.F. penalty while passing the

impugned order dated NIL. in the Petition No: 90/2015.

(ii) The Respondent has also reproduced in his Counter Affidavit the definitions of

"Connected load" and "Contracted load" as per T.N. Electricity Distribution Code,

2004 whereas the definitions of above terms as per Sec 2(d), 2(e) and 2 (f) of Tamil

nadu Electricity Supply Code, 2004 would have been more appropriate in the case

of billing matters. Plain reading of the above definitions shall show that

Connected load and Contracted load are different and not one and

the same. The applicability of Connected load and Contracted load during

billing are also different.

7

(iii) In response to an online query by the Petitioner, the Respondent's Company

(TANGEDCO Ltd.,) has confirmed through an e-mail reply dated 03/07/2015 that the

Low P.F. Penalties have been collected from the Petitioner on the basis of

Contracted load ie. Sanctioned load only. The submissions by the Respondent in his

Counter affidavit also confirm that the low P.F.Penalties had been collected from the

Petitioner only on the basis of the Contracted load after making following wrong

assumptions;

(i) As though not aware of the relevant statutory provision contained in

para 6.9.(iv) of the Tariff Order dated 11/12/2014, issued under

Sec. 4(1)(ii) of T.N. Electricity Supply Code, 2004, wherein it is prescribed that the

Fixed Charges for L.T. Connections are payable on the basis of the Contracted Load

of supply, the Respondent has falsely claimed in his Counter Affidavit that the

payments collected from the Consumer towards the monthly fixed

charges shall prove that the Connected load and Contracted load of

the Petitioner are one and the same. As per rules, monthly fixed

charges are payable on the Contracted load even for disconnected

supplies wherein the Connected loads would be zero.

(iii) The statements by the Respondent in his Counter Affidavit about

the capacities of the Energy meters installed at the Consumer's

premises shall also have no relevance to the dispute in view of the

Statutory provision under Regulation 7(2) of the T.N. Electricity Supply

Code, 2004 wherein it is specified that capacities of energy meters

shall be as per the Contracted load of Supply and not as per the

Connected load. Hence, Connected load at the premises has nothing

to do with the capacities of the Energy meters fixed by the Respondent

at the above premises, as has already been held by this Hon'ble Forum in another

Appeal Petition No: 23 of 2012 by Order dated 04.12.2012.

8

(iv) The Respondent, being an Engineer of the Licensee Company,

must certainly know that contracted load [or sanctioned load] is the maximum load which a consumer is authorised to connect to the supply whereas connected load is the actual load connected to the supply at any point of time. Hence, contracted load and connected load

need not be the same and those are generally found different in most

cases because the Consumers prefer to have some extra power to meet

their future needs and to avoid excess load levies. The definitions of

Sec. 2(d) to (e) of the T.N. Electricity Supply Code, 2004 shall show the

differences between the two terms quite clearly.

(v) Even when we consider about the Power Factor, it is relevant

only to the quantum of electricity Consumed and related to the Maximum

Demand or the Connected load but certainly not to the Contracted load of

Supply. The Contracted Load or Sanctioned load is only the maximum

permitted load which a Consumer can utilize with no obligation to utilize the

entire contracted load as long as the fixed charge based on the contracted load

is being paid. Hence, levying of Low PF penalty on the basis of Contracted load shall be meaningless even on the ground of the alleged losses.

(vi) Further, a scrutiny of the bi-monthly bills of the above service

connection for the period 22.06.2013 upto 20.06.2015 shall reveal that the

maximum demands recorded therein have been less than 10 KW with

very low bi-monthly consumption figures. The total units consumed during the

above 12 bi-monthly billing cycles was 9150 units which amounts to

appx.12 units [KWh] per day ie. less than half an hour of daily usage of

32 kw of Connected load. Hence, as it is unreasonable to believe that an

Industrial Consumer would have used the connected load of 32 kw for less than

half an hour a day on an average for 2 years, the Connected load of the above connection could not even be assumed to be above the prescribed limit of 18.6 KW at any point of time during the above period of 2 years.

9

(vii) It is to be noted that the Respondent has recorded the Connected load as 2 KW

during an inspection of the premises on 26/05/2015 but has levied. Low PF penalty

in the subsequent bi-monthly bills also. This further proves that the Respondent has

not taken into account the Connected load while levying Low PF penalty on the

customer.

(viii) As regards low P.F.utilisation, it is a fact that very low utilisation of

power, consisting mainly of tube-lights and fans, shall result in low P.F and

that is why the exemption limit of 18.6 KW of Connected Load has been

prescribed for the levy of low P. F. penalty on L. T. Connections.

(ix) The Respondents, who are required to visit all L.T. installations once

in every 3 year for inspection , had noticed the low connected load at the

premises on 29.10.2011 and had sought explanation from the Petitioner

and accordingly the Petitioner had submitted a letter dated 31.10.2011

explaining the reasons. The premises had remained vacant for most part of

the above period due to the inability to find a Tenant because of the

prevailing poor general business environment.

(x) As the Respondent has admittedly collected the Low P.F.

Penalty amounts based on the Contracted load of the above Service

Connection instead of the Connected load, and in the absence of any

documentary evidence or proof such as OTR, RTR, etc. produced to prove

that the Connected load at the premises had been above the prescribed

limit of 18.6 KW [25 H.P.] at any time during the period 22.06.2013 to

20.06.2015, it is just and necessary that the Respondent is ordered to

refund the Low P.F. Penalty amounts collected from the Petitioner so far

together with interest @ 18 and to credit the refund amount to the

existing consumer account No: 324-009-320, within a time to be prescribed

by this Hon'ble Forum and thus render justice.

10

6.4 On 26.2.2016, the Appellant argued that the recording of Maximum demand

reached as 32 kw & 30 kw during 10/2014 & 12.2014 assessment periods

respectively may be a wrong entry. He has cited the consumption of 952 units &

548 units in the said period and argued that the 60 days consumption for such a

maximum demand could not be as low as 952 & 548 units. He has also argued

that during the disputed period, the M(D) recorded varies from 0.33kw to 6.36 kw

only excluding the above two months and the consumption for the period varies

from 380 units to 1242 units only.

6.5 The Appellant also argued that M(D) recorded may be due to heavy drawal

during equipment fault. The Appellant argued that during the entire disputed

period, a same tenant has utilized the service whose connected load is only 10

kw as per Test Report dt.30.6.15. and hence argued that the connected load

cannot be 32 kw.

7. Arguments of the Respondent

7.1 Thiru. Naresh Babu, Assistant Executive Engineer, Porur, reiterated the contents

of the counter.

7.2 The Assistant Executive Engineer, Porur, Argued that the Appellant has availed

the service connection for a sanctioned load of 32 kw as the appellant has not

changed the sanctioned load, he argued that the connected load is also 32 kw

only.

7.3 As the power factor recorded is below 0.85, the consumer has to pay the

compensation charges for maintaining the low power factor.

11

7.4 He also informed that the test report obtained while effecting the service

connection with connected load details are not traceable and hence unable to

produce t he records for the connected load.

7.5 He also argued that the consumer was paying fixed charges for 32 kw. Had the

connected load was les than 32 kw the consumer would not have made

payment of fixed charges for 32 kw such a long time. He could have reduced the

load, to the connected load level. As there was no request for reduction of load

before 6/2015, the connected load has to be taken as 32 kw only.

7.6 The AEE informed that the total connected load and the misused load in the said

service at the time of inspection of AEE/Enforcement Wing on 26.5.2015 is 1950

watts. He has submitted a copy of Parvai Magajar and the provisional

assessment in support of the above details.

8. Additional submission of the Appellant :

The Appellant has furnished the following arguments in the additional written

submission dt.3.3.2016.

(i) It is respectfully submitted that in spite of the 10 days time granted by

this Hon'ble Commission and another 30 days of time which was available

till the next date of hearing held on 26/02/2016 , the Respondent has neither

filed a rejoinder to his written submissions dated 19/01/2016 nor has produced

any documentary evidence to prove that the total connected load of the above

service connection has been above 18.6 KW. during the relevant periods for

which Low P. F. penalties have been levied on the Consumer. It has been

admitted by the Respondent that they do not possess any record or

12

Test inspection reports in which the Connected loads might have been recorded

from the initial date of energisation in 1998 upto 26/05/2015.

Under the relevant provisions of The Indian Evidence Act,1872,

non-production of the relevant records by a party, who is required by law to

prepare and maintain such records , shall give presumption in favor of the

opposite party's claim ie. the Petitioner's in the present case.

(ii) lt is further submitted that only one Test Report has been submitted which

was prepared at the time of inspection of the premises by APTS on

26/05/2015 in which the total connected load at the premises has been

recorded as1950 watts (1.95 KW) only. In the absence of any other

Test reports for the periods under consideration, it is reasonable to assume

that the above total Connected Load of 1.95 KW had remained throughout the

entire period.

(iii) It is further submitted that the Respondent has reiterated the earlier

admission made in response to the online query from the Petitioner that the

Low P. F. penalties had been collected only on the basis of contracted load of

supply. The arguments by the Respondent that contracted load and connected

load are one and the same was rightly rejected by this Hon'ble Commission in

the absence of any relevant documentary proof to that effect.

(iv) It is further submitted that the burden of proof is on the Respondent

and not on the Petitioner to prove that the total connected loads at the

premises were above the prescribed limit of 18.6 KW before imposing the low

P.F. penalties during the respective bi-monthly billing cycles. The failure to do so

13

shall hence amount to violation of the prescribed "sine-qua-non" statutory

provision in this regard. It is a well recognised legal maxim that while invoking

any penal provision, the Authority levying the Penalty shall satisfy himself that the

prescribed 'sine-qua-non' provisions are complied with prior to the imposition of

such penalties. As the Respondent has already admitted that no records of the

total connected loads at the premises are available with him in respect of the

disputed periods, which is 'sine-qua-non' for the levy of low P.F. penalties, there

is no need to conduct any further probe or enquiry into the issue and the low P.F.

penalty amounts collected from the Petitioner so far are liable to be set aside and

refunded with interest.

(v) It is further submitted that while the Statute itself has prescribed the

total Connected load as the basis for the levy of low P.F. Penalty during each of

the billing cycles, it is not proper to substitute , replace or reinvent another value

through assumptions, conjectures and inferences based on Contracted load,

M.D. etc. which are not conclusive or determinative of the Connected loads

as defined separately in' the statute. Similarly, any attempt to infer , correlate,

interpolate or decipher the Connected loads from those parameters having no

one-to-one relationships correlations with each other shall also be invalid and

unreliable. It was incumbent on the Respondent to ascertain and record the total

Connected loads before levying the low P.F. penalties during the bi-monthly

billing cycles and having failed to perform this statutory duty, it shall be highly

unreasonable to condone the omissions made and to justify those illegal levies of

14

low P.F. penalties by suggesting to infer and conjecture the total connected

loads from above extraneous and unrelated parameter values.

(vi) It is further submitted that as regards the M.D.values shown in the bills of the

periods under dispute , neither the Respondent has taken it as a

ground of defence in his oral submissions or in his Counter affidavit nor the

Petitioner considers it as a relevant fact for the determination of the Connected

loads for the reasons stated here under. However, at the desire of this Hon'ble

Commission, the following clarifications are offered regarding the possible

causes for the variations of M.D. values in the bi-monthly bills during the above

billing cycles.

(vii) Coming to the correctness of determining the total connected load

from the MD values recorded during the respective bi-monthly billing cycle,

it is necessary to look at the definitions of the two terms, which are extracted

below to understand the differences between the two

(a) CONNECTED LOAD;

" Connected Load means the aggregate of the manufacturer's

rating of all equipments connected to the consumer's

installat.ion and of all portable equipments and also the capacity of the power

source required to test manufactured products and repaired equipment in the

installation.

Explanation: Where the rating is in terms of KV A, it shall be converted

to KW by multiplying it by a power factor of 0.9 and where the rating

is in terms of HP, it shall be converted to KW by multiplying it by a

factor of 0.746"

15

(b) MAXIMUM DEMAND;

"Maximum Demand shall mean the average KV A delivered at the

point of supply of a consumer during any consecutive period of

30 or 15 minutes of maximum use during the month, as may be

specified by the licensee, with the approval of Commission".

(iv) The above definitions clearly bring out the distinct natures of the two

terms and the the absence of any inter-dependence or correlations

between them. While the total connected load is the sum total of

"THE RATED CAPACITIES OF ALL THE EQUIPMENTS" connected to the

service at any point of time , Maximum demand is the sum total of

"THE LOADS DRAWN BY ALL THE EQUIPMENTS" within a 15/30 min.

interval during the bi-monthly billing cycle. It is not necessary that that the

actual loads drawn by the equipments cannot exceed the rated

capacities as the loads drawn by the equipments are depended on

several factors such as over-loading due to age and external mechanical

loads , input voltage, initial loads, earthling faults, internal leaks, service line

fluctuations, etc. As the M.D. is the maximum average demand recorded in

any of the intervals of 15/30 minutes during the bi-monthly billing cycle ,

existence of any of the above conditions during 2 consecutive periods of

15/30 minutes between successive billing cycles can result in recording of

higher M.D. for 2 successive billing cycles. Further, as long as the rise in

M.D. is within the Contracted load, the fuse blowing or tripping of supply

may not happen. While the scrutiny of current consumption graph for the

entire billing cycle can be indicative of the usage pattern , it does not

conclusively prove the total Connected loads . While M.D. is relevant in

levying excess M.D. Charges, it cannot be used to compute the

connected load and thereby to levy Low P.F. Penalty on consumers.

16

For the levy of low PF Penalty , the Connected load values alone are

relevant.

(v) In the case of L T Consumers coming under Regulation 5.2(ii) (b) of

the Supply Code, 2004, no excess M.D. charges are payable as long as

their Connected loads are within the Contracted load limits. Regulations 5.2

and 5.3 of the Tamil Nadu Electricity Supply Code, 2004 are also relevant

to understand the differences. These provisions shall convincingly prove

that there may be conditions in which M.D. values could be more than the

Connected load values depending on operating conditions. Hence the view

expressed during the hearing that Connected loads cannot be less than

MD values is not always valid for the reasons stated above. Hence, no

inferences of Connected loads can be drawn from the M.D. values.

(vi) Coming to the specific cases of M.D. values of 32 KW and 30 KW

shown in the bi-monthly bills dated18/10/2014 and 19/12/2014, it is

submitted that these entries prima-facie appear to be errors of data

entry while manually transferring the data from the Energy Meter

readings to the Computers due to ;

(a) Out of the 12 bi-monthly billing cycles, 10 of the M.D. entries show

the M.D. values in the range of 0.33 to 6.36 KW while only 2 entries

show it as 32 KW and 30 KW respectively. Whether it was a data-entry

error or not could have been verified from the recorded data available in

the Energy meter which was removed from the premises on 30106/2015

as well as from the consumption data of past 2 year which the

Respondent is required under law to maintain.

(b) The M.D values of immediate previous bi-monthly billing cycles as

well as subsequent bi-monthly billing cycles of the above 2 billing

cycles are also showing the M.D. Values between 1 TO 6 KW. The

17

fact that the premises has been under the occupation of a Lessee

during the entire period without any significant changes in their

business activities and the premises had been inspected and

Connected load has been recorded within the relevant period by

APTS on 25/05/2016 may also be relevant while ascertaining the

correctness of the above 2 abnormally high M.D. values. As the above 2

M.D. values were within the Contracted load, there has been

no adverse effect on the bill amounts.

(c) The energy consumption graph of the above period from the

TANGEDCO web-site , which is enclosed herewith, shows that the

energy consumptions during the above 2 periods of abnormal

M.D. values have been significantly lower than the energy

consumptions of previous and subsequent bi- monthly billing

cycles which showed substantially lower M.D. values. It must be

unreasonable and improbable to believe that M.D. values of the

above 2 bi-monthly billing cycles could be so high by 600 to 1000

whereas the corresponding energy consumption figures were lower

by 100 when compared with the rest of bi-monthly billing cycles,

as shown in the consumption graph.

9. Findings of the Electricity Ombudsman

9.1 I have heard the arguments of both sides. On a careful consideration of the

arguments putforth by the rival submissions, the issue to be considered is

(i) Whether connected load or contracted load has to be considered for

calculating the compensation charges for low power factor ?

(ii) Whether the connected load of the Appellant is more than 18.6 kw

(25HP)?

(iii) What is the relief to be given ?

18

10. Findings on the first issue:

10.1 The Appellant argued that even though the connected load of the premises was

never above 10 kw since the date of energisation of supply low power factor levies

have been collected all along on the basis of sanctioned load against the statutory

provision.

10.2 The Appellant also citing the rule No.6.9(i) of the TNERC tariff order

dt.11.12.2014 & Rule No.10.9.2 of TNERC tariff order dt.30.3.2012 argued that low

power factor penalty is leviable for IIIB category of service only when the connected

load is above 18.6 kw (25HP) and not payable on the basis of sanctioned load.

10.3 .The Respondent has not disputed that the power factor compensation is

payable on connected load. But, argued that as the contracted load is 32 kw, the

connected load will also be at the level of 32 kw.

10.4 As the disputed period is from 22.6.2013 t o 20.6.2015, the tariff orders of the

relevant period are to be referred to arrive at the conclusion. The relevant paras of the

tariff order No.1 of 2013 & SMT Order No.9 of 2014 are extracted below :

Para 6.9.(ii):

Tariff Order No.1 of 2013 dt.(valid from 21.6.2013 t o 11.12.2014).

“6.9 General Provisions applicable for Low Tension Supply

xxx xxx xxx

ii. In case of LT Tariff III-B and LT Tariff V, all services with a connected load of 18.6 kW

(25 HP) and above should maintain a power factor of not less than 0.85. Where the

average power factor of Low Tension Service connection is less than the stipulated limit

of 0.85 the following compensation charges will be levied.”

19

Para 6.9(ii) of SMT Order No.9 of 2014 (Valid from 12.12.2014)

6.9 General Provisions applicable for Low Tension Supply

xxx xxxx xxxx

ii. In case of LT Tariff III-B and LT Tariff V, all services with a connected load of 18.6 kW

(25 HP) and above should maintain a power factor of not less than 0.85. Where the

average power factor of Low Tension Service connection is less than the stipulated limit

of 0.85 the following compensation charges will be levied.

10.5 On a careful reading of para 6.9(ii) of the above said tariff order, it is noted that in

respect of LT tariff IIIB and LT tariff V all services with a connected load of 18.6 kw

(25HP) and above shall maintain a power factor of not less than 0.85 and

compensation charges will be levied if the average power factor of the LT services is

lower than the stipulated 0.85.

10.6 Here it has been clearly mentioned that the services with a connected load of

18.6 kw and above shall maintain a power factor of 0.85. As connected load has been

mentioned as criteria for levy of the power factor compensation charges, it is held that

the connected load of the service is to be 18.6 kw and above for levying the

compensation for maintain low power factor in respect of LT IIIB & LT V services.

11. Findings on the Second Issue :

11.1 The Respondent argued that the contracted load of the said service connection

is 32 kw. The consumer is making payment of fixed charges on the contracted demand

of 32 kw. Unless the extent of machinery / equipment is available at the consumer’s

premises to the level of 32kw, the Appellant could not have made the payment towards

20

fixed charges for the 32 kw. This clearly evidence the fact that the Appellant’s

connected load was equal to the contracted demand of 32 kw.

11.2 The Respondent also argued that while effecting the reduction of load on

30.6.2015, the consumer meter was replaced with a meter of capacity of 10-60 amps,

prior to the change of meter, the consumer had been provided with a meter capacity of

100-120 amps. This adds to the fact that the consumer has a connected load to the

extent of contracted demand of 32 kw.

11.3 The Respondent also argued that the consumer has maintained a low power

factor in the range of 0.27 to 0.53 during the disputed period which is lower than the

Bench Mark of 0.85. Hence, argued that the power factor compensation charges levied

is as per regulation only.

11.4 The Appellant argued that the connected load and contracted load cannot be

same. The power factor compensation charges has to be paid only if the connected

load is 18.6 kw or more.

11.5 The Appellant argued that burden of proof is on the Respondent side to prove

that the connected load at the premises is 18.6 kw and above. He cited the legal

maximum sine-qua-non in support of his argument.

11.6 The Appellant argued that the connected load at the time of inspection by

Enforcement on 26.5.2015 is only 1950 watts as per the provisional assessment notice

issued. The same tenant was occupying the premises during the entire period in

dispute. Hence, citing the above connected load, the appellant argued that the

connected load could not be more during the disputed period.

21

11.7 The Appellant argued that the capacity of the meter fixed is based on the

sanctioned load only and the connected load at the premises has nothing do with the

capacity of the energy meter fixed in the service. He has cited the order of Electricity

Ombudsman in A.P.No.26 of 2012 dt.4.12.2012 in support of his above argument.

11.8 The Appellant argued that while statute itself has prescribed total connected

load as the basis for the levy of low power factor penalty during each of billing cycles, it

is not proper to substitute replace or reinvent another value through assumption,

confectures and inferences based on contracted loads, MD etc., which are not

conclusive or determinative of the connected loads as defined separately in the statute.

11.9 The Appellant argued that the maximum demand values shown in bills has not

been taken as a grant of defence by the Respondent . However, the Appellant argued

as below in support of not considering these values of MD.

11.10 Coming to the correctness of determining the total connected load

from the MD values recorded during the respective bi-monthly billing cycle,

it is necessary to look at the definitions of the two terms, which are extracted

below to understand the differences between the two

(a) CONNECTED LOAD;

"Connected Load means the aggregate of the manufacturer's

rating of all equipments connected to the consumer's

installation and of all portable equipments and also the capacity of the power

source required to test manufactured products and repaired equipment in the

installation.

Explanation: Where the rating is in terms of KVA, it shall be converted

to KW by multiplying it by a power factor of 0.9 and where the rating

22

is in terms of HP, it shall be converted to KW by multiplying it by a

factor of 0.746"

(b) MAXIMUM DEMAND;

"Maximum Demand shall mean the average KVA delivered at the

point of supply of a consumer during any consecutive period of

30 or 15 minutes of maximum use during the month, as may be

specified by the licensee, with the approval of Commission".

11.11 The above definitions clearly bring out the distinct natures of the two

terms and the the absence of any inter-dependence or correlations

between them. While the total connected load is the sum total of

"THE RATED CAPACITIES OF ALL THE EQUIPMENTS" connected to the

service at any point of time , Maximum demand is the sum total of

"THE LOADS DRAWN BY ALL THE EQUIPMENTS" within a 15/30 min.

interval during the bi-monthly billing cycle. It is not necessary that that the

actual loads drawn by the equipments cannot exceed the rated

capacities as the loads drawn by the equipments are depended on

several factors such as over-loading due to age and external mechanical

loads , input voltage, initial loads, earthling faults, internal leaks, service line

fluctuations, etc. As the M.D. is the maximum average demand recorded in

any of the intervals of 15/30 minutes during the bi-monthly billing cycle ,

existence of any of the above conditions during 2 consecutive periods of

15/30 minutes between successive billing cycles can result in recording of

higher M.D. for 2 successive billing cycles. Further, as long as the rise in

M.D. is within the Contracted load, the fuse blowing or tripping of supply

may not happen. While the scrutiny of current consumption graph for the

entire billing cycle can be indicative of the usage pattern , it does not

conclusively prove the total Connected loads . While M.D. is relevant in

23

levying excess M.D. Charges, it cannot be used to compute the

connected load and thereby to levy Low P.F. Penalty on consumers. For the levy

of low PF Penalty , the Connected load values alone are

relevant.

11.12 In the case of L T Consumers coming under Regulation 5.2(ii) (b) of

the Supply Code, 2004, no excess M.D. charges are payable as long as

their Connected loads are within the Contracted load limits. Regulations 5.2

and 5.3 of the Tamil Nadu Electricity Supply Code, 2004 are also relevant to

understand the differences. These provisions shall convincingly prove that there

may be conditions in which M.D. values could be more than the

Connected load values depending on operating conditions. Hence the view

expressed during the hearing that Connected loads cannot be less than MD

values is not always valid for the reasons stated above. Hence, no

inferences of Connected loads can be drawn from the M.D. values.

11.13 Coming to the specific cases of M.D. values of 32 KW and 30 KW

shown in the bi-monthly bills dated18/10/2014 and 19/12/2014, it is

submitted that these entries prima-facie appear to be errors of data

entry while manually transferring the data from the Energy Meter

readings to the Computers due to ;

(a) Out of the 12 bi-monthly billing cycles, 10 of the M.D. entries show

the M.D. values in the range of 0.33 to 6.36 KW while only 2 entries

show it as 32 KW and 30 KW respectively. Whether it was a data-entry

error or not could have been verified from the recorded data available in

the Energy meter which was removed from the premises on 30/06/2015

as well as from the consumption data of past 2 year which the

Respondent is required under law to maintain.

(b) The M.D values of immediate previous bi-monthly billing cycles as

well as subsequent bi-monthly billing cycles of the above 2 billing

cycles are also showing the M.D. Values between 1 TO 6 KW. The

24

fact that the premises has been under the occupation of a Lessee

during the entire period without any significant changes in their

business activities and the premises had been inspected and

Connected load has been recorded within the relevant period by

APTS on 25/05/2016 may also be relevant while ascertaining the

correctness of the above 2 abnormally high M.D. values. As the above 2 M.D.

values were within the Contracted load, there has been

no adverse effect on the bill amounts.

11.14 The energy consumption graph of the above period from the TANGEDCO web-

site, which is enclosed herewith, shows that the energy consumptions during the

above 2 periods of abnormal M.D. values have been significantly lower than the

energy consumptions of previous and subsequent bi- monthly billing cycles

which showed substantially lower M.D. values. It must be unreasonable and

improbable to believe that M.D. values of the above 2 bi-monthly billing cycles

could be so high by 600% to 1000% whereas the corresponding energy

consumption figures were lower by 100% when compared with the rest of bi-

monthly billing cycles, as shown in the consumption graph.

11.15 As per the findings of the first issue, the connected load is the criteria for levy of

the power factor compensation charges.

11.16 Both the Appellant and Respondent are agreeable that the connected load is

the criteria.

11.17 In order to establish the connected load, the Respondent has not provided any

record. The respondent was unable to produce the Test Report obtained at the time of

25

effecting supply to prove the connected load. Their argument is sanctioned load is 32

kw. Hence, the connected load is also 32 kw.

11.18 It is noted that during the inspection of the service by the Enforcement Wing of

the licensee on 26.5.2015, the connected load of the service was noted as 1950 watts

only.

11.19 The Assistant Executive Engineer/Porur, the Respondent herein also confirmed

that the total load noted in the assessment slip is 1950 watts and the misused load is

also 1950 watts only. Hence, the power factor compensation levied for the period from

26.5.2015 to 20.6.2015 is not correct as the connected load is only 1950 watts during

the said period.

11.20 The power factor compensation levied and disputed by the Appellant in this

petition is for the period from 22.6.2013 to 20.6.2015.

11.21 The Appellant argued that the tenant who was utilizing the service while the

inspection was carried out by the AEE/Enforcement has utilized the service during the

entire disputed period and have also furnished the Xerox copies of the lease

agreement entered from 15.3.2012 to 14.2.2013, 1.2.2013 to 1.1.2014, 1.1.14 to

30.11.14.

11.22 As the same tenant was utilizing the service, the Appellant has argued that the

connected load was same for the entire period in dispute. He has also cited the test

report dt.30.6.2015 and argued that the total connected load is only 10kw.

11.23 The Appellant argued citing the definition etc that connected load has no

relevance to the maximum demand recorded, I am not in agreement with the above.

The maximum demand recorded depends on the average load put on service during the

26

integration time of half an hour/15 minutes period. Of course, the MD recorded includes

load drawn by the equipments connected during the said period even if loaded more

than the rating of the machines. Further, if the connected load is less than 10 kw then

recording of 30 kw as MD is not feasible. Hence, I am of the opinion that there is a

relation between the load put on service and the MD recorded.

11.24 The details of consumption and maximum demand recorded after 3/2012 to

8/2015 are tabulated below :

Period Sanctioned load in KW

MD recorded in KW

Consumption in units

4/2012 31 2.18 320 6/2012 31 2.23 380 8/2012 31 2.27 550

10/2012 31 3.438 710 12/2012 31 31 350

2/2013 31 3.17 350 4/2013 31 5.02 670 6/2013 32 4.5 1060 8/2013 32 2.4 690

10/2013 32 0.4 83012/2013 32 0.33 480

2/2014 32 0.4 380 4/2014 32 3.74 830 6/2014 32 1 1120 8/2014 32 1 980

10/2014 32 32 952 12/2014 32 30 548

2/2015 32 3.28 440 4/2015 32 6.36 810 6/2015 32 5.4 1090 8/2015 10 4.7 1242

11.25 On a careful analsis of the recorded units recorded, it is noted that the

consumption varies from 320 units to 1090 units . The maximum demand recorded

varies from 0.33 to 32. The maximum demand was recorded more than 6.36 kw in the

following periods only.

27

Assessment Sanctioned MD Consumption Period load in KW. in KW in units

12/2012 31 31 350

10/2014 32 32 952

12/2014 32 30 548

11.26 When comparing the consumption with the maximum demand recorded in the

above months with that of the maximum demand and corresponding consumption

recorded in other months, it appears, the maximum demand recorded in the above

periods are unrealistic. It is true that any half an hour average load is maximum

demand recorded. So, the recording of MD may not reflect on the monthly

consumption. But, on a careful analysis, it is seen that out of the above three readings

on two assessment periods, the maximum demand and the sanctioned demand were

noted as 31kw & 32 kw respectively. Hence, there is a possibility that the reading

recording personal has wrongly entered the sanctioned load in both the columns. Here,

I would like to point out that the maximum demand has no relevance on the billing

amounts as fixed charges is levied on sanctioned load. In the white meter card also

the maximum demand has not been entered except for 12/2011 & 2/2012. Similarly,

there is a possibility of wrong entry of 30 kw as the maximum demand in respect of

12/2014 as the same company (viz) ZHAFIR PLASTICS Machinery India Pvt Ltd., was

utilizing the service whose connected load was recorded as 1.95 kw during inspection of

AEE/Enforcement on 26.5.2015 and 10 kw in the RTR dt.30.6.2015. The consumption

of 548 units for 12/2014 assessment period when the recorded demand is 30 KW also

28

appears to be not realistic when compared with the consumption & M(D) recorded for

the other periods.

11.27 In order to confirm, whether the above entry is a wrong entry or not, I have called

for the downloaded details of the said meter reading. But, the Respondent informed

that they have devoluted the meter and are not having the downloaded details. In this

regard, it is to be noted that the Appellant has raised the issue of refund of the low

power factor compensation amount on 24.6.2015 itself. The meter was changed only

on 30.6.2015. Therefore, the licensee could have downloaded the details to confirm of

the correctness of the maximum demand recorded during 10/2014 & 12/2014.

11.28 In view of the following reasons, I am unable to accept the argument of the

Respondent that the Appellant’s service connection was having a connected load of

more than 18.6 kw during the disputed period.

(i) The Respondent has not produced any record such as Test Report etc., to

establish that the connected load of the service connection is more than 18.6 kw.

(ii) The connected load recorded during the inspection of AEE/Enforcement on

26.5.2015 is 1950 watts and the above date falls within the disputed period.

(iii) The Respondent has not furnished the downloaded details to confirm the

maximum demand recorded during 10/2014 & 12/2014 as 32 kw & 30 kw respectively.

(iv) The connected load as on 26.5.2015 is 1950 watts and 10 kw as per revised Test

Report taken on 30.6.2015 and the same company has utilised the service during the

entire period in dispute. Further the consumptions recorded during the entire disputed

period is less than the consumption of 1242 units recorded during 8/2015 assessment

period [(ie) consumption recorded after 30.6.15 when the connected load is 10 kw only].

29

12. Findings on Third Issue :

12.1 The Appellant has requested for refund of the low power factor compensation

charges collected with interest at 18%.

12.2 As per my findings on first issue, the criteria for levying low power factor

compensation charges is connected load shall be 18.6 kw and above.

12.3 The connected load while inspecting the service by AEE/Enforcement on

26.5.2015 is 1950 watts only. Hence, the levy of power factor compensation charges

from 26.5.2015 to 20.6.2015 is not confirming to tariff order and is set aside.

12.4 As per my findings on the second issue, the Respondent have not established

that the connected load of the service is more than 18.6 KW during the disputed period.

Hence, the low power factor compensation charges has to be refunded to the Appellant

only.

12.5 As the Appellant prayed for refund of the low power factor compensation

charges with 18% interest, I would like to refer regulation 12 of the Supply Code.

“12. Errors in billing(1) xxx xxx xxx(2) Where it is found that the consumer has been over-charged, the excess amount

paid by such consumer shall be refunded along with interest at the rate applicable for

security deposit. The interest shall be computed from the date on which the excess

amount was paid. Such excess amount with interest may be paid by cheque in the

month subsequent to the detection of excess recovery or may be adjusted in the future

current consumption bills upto two assessments at the option of the consumer. The

sum which remains to be recovered after two assessments may be paid by cheque.

Interest shall be upto the date of last payment.”

12.6 On a careful reading of the said regulation 12(2), it is noted that the excess

amount collected from the consumer has to be refunded along with interest at the rate

30

applicable for Security Deposit. The interest shall be computed from the date on which

the excess amount was paid upto the date of refund. The refund shall be paid in the

subsequent billing month or may be adjusted in future bills.

12.7 In view of the above, it is held that the excess amount collected will be refunded

to the Appellant with interest as applicable to security deposit only.

13. Conclusion :

13.1 As per my findings in para 12.3, the connected load of the service noted during

the inspection of AEE/Enforcement on 26.5.2015 is 1950 watts only. As the connected

load is less than 18.6 kw, the power factor compensation charges levied from 26.5.2015

to 20.6.2015 is not confirming to the tariff order and hence to be refunded to the

Appellant.

13.2 As the Respondent has not established that the connected load is 18.6kw or

more in service connection No.324-009-320, in the balance period under dispute also,

the sum of Rs.30,314/- collected from the Appellant as power factor compensation

charges shall be refunded to the Appellant along with interest at the rate applicable to

the security deposit.

13.3 The refund /adjustment shall be made within 30 days from the date of receipt of

this order and a compliance report shall be furnished within 40 days from the date of

receipt of this order.

13.4 With the above findings, the A.P.No.83 of 2015 is finally disposed of by the

Electricity Ombudsman. No Costs.

(A. Dharmaraj) Electricity Ombudsman

31

To1) Thiru. V.B.R. Menon,Advocate,Flat No.4B, Brook Dale Apartment,No.12, P.T. Rajan Salai,K.K. Nagar,Chennai – 78.

2) The Asst. Exe. Engineer/O&M,Porur,Chennai Electricity Distribution Circle/South,TANGEDCO,Porur 110 KV SS Complex,Kundrathur Road, Porur, Chennai – 116.

3) The Superintending Engineer,Chennai Electricity Distribution Circle/South,TANGEDCO,110 KV SS Complex,K.K. Nagar, Chennai – 78.

4) The Chairman & Managing Director,TANGEDCO,NPKR Maaligai, 144, Anna Salai, Chennai – 600 002.

5) The Secretary, Tamil Nadu Electricity Regulatory Commission,No.19A, Rukmini Lakshmipathy Salai,Egmore, Chennai – 600 008.

6) The Assistant Director (Computer) - FOR HOSTING IN THE TNEO WEBSITE PLEASETamil Nadu Electricity Regulatory Commission,No.19-A, Rukmini Lakshmipathy Salai,Egmore, Chennai – 600 008.

32