The Odisha Electricity Regulatory Commission (OERC) on Wednesday revoked the licences of the three distribution companies — Nesco, Wesco and Southco —  managed by Reliance Infrastructure (RInfra), with controlling stakes of 51%, in Odisha.

The OERC, hosting the cancellation order in its official website, said that the licences were cancelled for an unsatisfactory performance and violation of the shareholding agreements by the discoms. The OERC has removed the Reliance Infra-appointed MD/CEOs of the three discoms and appointed the chairman-cum-managing director of Gridco, a state-owned utility company, as the administrators in their place.

“Highly unsatisfactory performance of the licensees in different key areas, such as energy audit, inability to control technical and commercial loss, poor billing efficiency, non payment of arrears with regard to bulk supply price (BSP) and NTPC Bond, failure to create requisite corpus for terminal benefits of employees and non-compliance of various directions of the Commission spelt out in retail supply tariff (RST) orders and during performance reviews”, said the OERC.

The commission said in its order that the discoms have breached the public trust and violated the legal provisions of the Electricity Act by non-incorporation of important clauses of the shareholders agreement in the Articles of Association of the discom when 51% of share in Nesco, Wesco and Southco were divested by Gridco in favour of three of private investors. The discoms have indulged in  subsequent transfer of shares to companies that were not group companies; gradual dilution of shares in favour of companies who did not have the original technical and financial pre-qualifying criteria specified at the time of the initial disinvestment, systemic transfer of part ownership of the utility to other companies by way of sale (transfer) of shares without the permission of the commission.

State’s energy principal secretary Suresh Mohapatra said that Gridco CMD Hemant Sharma will act as an administrator of the three discoms under the supervision of the energy principal secretary as per the OERC order.

* The three discoms — Nesco, Wesco and Southco —  are managed by RInfra
* Licences were revoked for an unsatisfactory performance, violation of the shareholding agreements by the discoms
* MD, CEOs of the discoms removed. State utility Gridco’s CMD to act as administrators
* The OERC said the discoms have violated the Electricity Act