The Madras High Court on Thursday ruled in favour of TANGEDCO (now Tamil Nadu Power Distribution Corporation Ltd – TNDPCL) in a decade-old legal dispute involving demand charges, a decision that has revenue implications of about ₹700 crore.A Division Bench comprising Justice G. Jayachandran and Justice Mummineni Sudheer Kumar allowed a batch of over 100 writ appeals filed by TANGEDCO and set aside an earlier order passed by a Single Judge. The Single Judge had quashed the demand charges raised by TANGEDCO on high-tension (HT) industrial consumers.
The issue dates back to 2006, when the Tamil Nadu Electricity Regulatory Commission (TNERC) introduced a concessional method of calculating demand charges, known as “deemed demand”, for HT consumers who had captive power plants or availed open access while also drawing power from TANGEDCO. The concession was withdrawn by the TNERC in 2012 after it was found to be causing financial losses to the utility.
Several HT consumers challenged the withdrawal and filed writ petitions before the High Court. These petitions were allowed by a Single Judge on September 14, 2018, following which TANGEDCO was unable to collect nearly ₹700 crore towards demand charges from 2013 onwards.
TANGEDCO filed appeals against the order in 2018. As an interim measure, the Division Bench had directed the consumers to pay 50 per cent of the demand charges. With Thursday’s verdict, the court upheld TANGEDCO’s stand, set aside the Single Judge’s order and directed the consumers to pay the remaining demand charges, amounting to about ₹350 crore, within three months.
Senior Advocate P. Wilson, assisted by Arun, appeared for TANGEDCO. Advocate Richardson Wilson represented the TNERC, while Advocates Rahul Balaji and Parthasarathy Pandiaraj appeared for the HT consumers.