Supreme Court rejects BSES plea on liquidation of assets

Regulatory assets are non-cash assets recorded in the books of discoms in cases where the regulator does not raise power tariffs to compensate for higher costs. If the regulator is not able to raise power rates for any reason, the loss is classified as a regulatory asset that can be liquidated in future via tariff raises.

A bench of Justices B S Chauhan and A K Sikri turned down an appeal by the BSES Yamuna and BSES Rajdhani to lift its stay against an order of the Appellate Tribunal of Electricity (ATE).

The ATE judgement in November 2013 had allowed liquidation of regulatory assets within three years. It also asked for implementation of a directive that fuel and power purchase cost adjustment should preferably be on monthly basis for generating companies but in no case exceeding a quarter.

The SC had in February stayed the implementation of the ATE judgment till such time it decides a batch of petitions over tariff and payment-related issues between the discoms and the regulator.

On Monday, senior advocate Mukul Rohatgi, appearing for the BSES, requested the vacation bench to modify the stay order so that the directions could be implemented by the DERC. He said that the BSES was clearing the current year dues with great difficulty but it was now imperative to have implementation of the ATE judgment.

“The SC had not restrained the tribunal from passing the judgement but said that the judgement shall not be implemented without ist leave. We want this stay order to be vacated now,” he said.

Rohatgi added: “A stay was granted without knowing what the judgment was going to be. Why should this stay continue now? I am here to meet the deadlines on making payments … Let this judgment be implemented now.”

The bench, however, questioned what could be the urgency to seek a modification of the February 2014 order during the court vacation. It reminded Rohatgi that the batch of petitions are already coming up for hearing in July and that the DERC’s appeal was also pending against the impugned ATE order.

“There is already an order in the matter. Allowing your application will mean dismissing the DERC’s appeal against the tribunal’s judgment…,” the bench said.

It issued notices to the DERC and others on the application by the BSES and fixed the matter for July 3.