ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION
4th & 5th Floors, Singareni Bhavan, Red Hills, Hyderabad-500 004
I.A. No. 1 of 2008
in
O.P.No. 11 of 2007
Dated: 07.02.2008
Sri Surinder Pal, Member
Sri R.Radha Kishen, Member
Between
and
Easteren Power Distribution Company of A. P. Ltd. … Respondent / Respondent
This Interlocutory Application (IA) coming on for hearing on 18.01.2008 in the presence of Sri. K. Gopal Choudary, Advocate, for the petitioner, and Sri P. Shiva Rao, Advocate for the respondent, and having stood over for consideration to this day, the Commission delivered the following:
The petitioner herein is also the petitioner in the main petition, viz., O.P.No. 11 of 2007. The petitioner filed the above-mentioned O.P. u/s 60, 86 (1) (b), (e), 62 and 30 of the Electricity Act, 2003 (hereinafter, “Act 2003”) praying, inter alia, for a declaration that the conduct of the respondent in withholding action and facilities for evacuation of power generated by the petitioner with a view to coercing the petitioner into accepting a tariff contrary to the provisions of the Act 2003 is improper, arbitrary, unconscionable, capricious and illegal and consequently to restrain the respondent from doing so.
2. Pending adjudication on the said main petition, the petitioner filed an application under Section 94 (2) of the Act, 2003. The averments mentioned in the said application are as follows:
(a) The petitioner is implementing a mini hydel power project and the 1st commissioning is expected to be done in or about the second week of February, 2008. The petitioner had applied to the respondent by letters dated 04-01-2007 and 18-01-2007 seeking interconnection facilities as contemplated in Article 3 of the Power Purchase Agreement (hereinafter, “PPA”) dated 06-12-2003. The respondent has sent a letter dated 16-03-2007 contending that it has no obligation to purchase power from the petitioner as the respondent has already met the stipulated percentage of NCE power to be purchased as determined by the Commission. However, the respondent has asked for the petitioner’s concurrence to the rate of Rs. 2.49 per unit. The respondent has also stated that it will take necessary steps to arrange power evacuation facilities upon receipt of the concurrence to that rate. In the main petition, it is contended that the action of the respondent in withholding power evacuation facilities and in repudiating the obligation under the PPA is only with a view to coercing the petitioner to accept a lower price of Rs. 2.49 and in a manner contrary to the provisions of law.
(b) The petitioner filed the main petition on 03-08-2007. The matter was heard on 03-11-2007 on the question of maintainability. Though, the respondent was directed to file its counter by 06-12-2007, no counter was filed till 14-12-2007, when the present IA under Section 94 (2) of the Act 2003 was filed as the final adjudication of the main petition may be delayed by reason of possible change in incumbency of the Commission and because of such delay, the petitioner may be put to irreparable harm and injury.
(c) The expected date of commissioning of the petitioner’s power project would be in the 2nd week of February 2008. If the petitioner does not get connectivity by that time for evacuating power and if the erection of the lines and evacuation facilities are not established immediately, the petitioner will not be able to evacuate any power that is generated or test and commission the power project. The petitioner is entitled for connectivity and for evacuation of the power generated even without reference to the PPA.
(d) In any case, the interconnection facilities are to be established at the cost of the petitioner. The respondent would not suffer any prejudice whatsoever by establishing the power evacuation facilities. If the evacuation facilities are not made available when the petitioner’s plant is ready for commissioning, the petitioner will be subjected to irreparable harm and injury as it will not be able to commission the plant and also will not be able to evacuate the power generated to any entity under the existing PPA or even otherwise to some other entity who may purchase and / or consume such generated power.
(e) It is therefore, prayed that the Commission may be pleased to direct the respondent to prepare an estimate and establish and / or provide interconnection facilities by 15-02-2008 at the cost of the petitioner or by permitting the petitioner to execute the interconnection facilities for power evacuation as per the sanctioned estimate, duly collecting supervision charges and to do so expeditiously so that the evacuation arrangements are available without fail by 15-02-2008 and / or pass such other order as the Commission considers fit in the facts and circumstances of the case.
3. Heard the counsel for both the parties.
4. On the date of hearing on 18.01.2008, the counsel for the petitioner reiterated the various averments mentioned in the application filed u/s 94 (2) of the Act, 2003. According to the counsel, the Commission has to consider whether the petitioner (a) has a prima facie case, (b) will be put to irreparable loss, if interim orders are not passed, and (c) has the balance of convenience in its favour. He further submitted that :
(a) In view of the contention of the respondent in the counter filed by it on 16.01.2008 stating that there is no subsisting valid PPA between the parties, the petitioner has prima facie case in its favour
(b) The petitioner filed the main petition in the month of August, 2007. At that time, an application u/s 94 (2) of the Act, 2003 was not filed in the bonafide belief that the said matter will be decided within reasonable time. Three months thereafter when the said main petition was still under scrutiny, the present application u/s 94 (2) of the Act, 2003 is filed. As the petitioner expects that it would commission its power project in the 2nd week of February 2008, it would suffer irreparable loss if estimate is not given and the petitioner is not provided with interconnection facility by that time.
(c) As far as the respondent is concerned, it does not make any difference whether the line is laid or not. On the other hand, if line is not laid, the petitioner will definitely suffer irreparable damage (in point of time). Moreover, erection of the line for establishing evacuation facilities will be at the cost of the petitioner. Thus the balance of convenience is in favour of the petitioner.
(d) For all the reasons mentioned above, it is requested that the Commission may allow the Interlocutory Application as prayed for.
5. On the other hand, the counsel for respondent stated that the submissions of the counsel for the petitioner are neither justified nor permitted under law. He further stated that:
(a) The respondent has filed its counter to the main petition and it is ready with arguments on the said petition. As such, there is no need to hear the I.A., much less passing an order on it.
(b) After hearing the arguments of the counsel for the petitioner on the question of maintainability of the main petition itself, the Commission on 17.11.2007 admitted the said petition, subject however to the points (a) to (d) as mentioned in the detailed order relating to maintainability of the petition. Thus when maintainability of the main petition is yet to be decided, further question of granting interim relief will not arise, as the issue of maintainability of the petition is an integral part for the purpose of deciding whether a prima facie case exists or not.
(c) When the PPA itself is under challenge, the question of grant of any interim relief does not arise. Moreover, as per the revised agreement dated 02.06.2007 entered into by the petitioner with the Non Conventional Energy Development Corporation of A.P.Limited (for short, ‘NEDCAP’), the project now is to be executed in two phases, thereby becoming an altogether new project and accordingly the parties herein are required to enter into fresh PPA. Therefore, the further question of granting interim relief will not arise, especially when the maintainability of the said petition is subject to final decision of the Commission as stated above.
(d) As the petition was filed under administrative side of the Commission’s jurisdiction, the petitioner cannot be permitted to take relief under its quasi-judicial side. In this regard, the counsel referred to the order passed by the Hon’ble Appellate Tribunal for Electricity in the case of M/s. Polyplex Corporation Limited, Ghaziabad Vs Uttaranchal Power Corporation Ltd, Dehradum, wherein the Tribunal classified the different functions of a Regulatory Commission to arrive at a decision with regard to its jurisdiction.
(e) When the petitioner itself delayed commissioning of its power project for more than five years, it cannot be permitted to contend now that delay in hearing the main petition itself would cause irreparable damage to it. The main petition itself can be disposed of and there is no necessity to pass orders on the Interlocutory Application.
(f) Thus viewing from any angle, the contentions of the petitioner that there exists prima facie case for entertaining the I. A., that it will suffer irreparable loss if interim orders are not passed and that the balance of convenience is in the favour of the petitioner are not correct. For all the said reasons, the application may be dismissed.
6. In response, the counsel for the petitioner further argued that
(a) When the Act, 2003 empowers the Commission to pass interim orders, such relief can be granted by it. It is not correct that the Hon’ble Supreme Court deprecated the practice of passing interim orders as contended by the counsel for the respondent. Passing such orders is not unknown to courts.
(b) Due to unworkability of the tariff determined by the Commission and the uncertainty of tariff, the petitioner could not proceed effectively with financial closure of the project. However, time was extended for financial closure as well as execution of the project.
(c) The PPA entered into between the parties provides for interconnection facilities for power evacuation. Therefore, the petitioner has prima facie case in its favour.
(d) Maintainability of the main petition may be in question, but it does not prohibit passing of interim orders by the Commission on this application.
(e) The limited prayer of the petitioner is to direct the respondent to prepare an estimate and establish interconnection facilities at the cost of the petitioner or to permit the petitioner to execute the interconnection facilities by itself for power evacuation as per the sanctioned estimate, duly collecting supervision charges.
7. The point that arises for consideration is, “whether the petitioner is entitled for the relief as prayed for in I.A.No.1 of 2008 in O.P.No. 11 of 2007.”
8. The fact that this Commission has got powers to pass such interim order as it considers appropriate in any proceeding, hearing or matter brought before it, is not in dispute in view of sub-section (2) of Section 94 of the Act, 2003. In view of the above-mentioned provision of law, the Commission is required to examine the parameters for exercise of such power. It is admitted by both the counsel that such parameters are well settled. Firstly, the Commission must be convinced that the petitioner has made out a prima facie case for exercise of power u/s 94 (2) of the Act, 2003. Secondly, the balance of convenience is in favour of grant of interim order and thirdly, in the event of not granting relief u/s 94 (2) of the Act 2003, the petitioner will suffer irreparable injury and / or loss. The counsel for the respondent contended that in addition to the above parameters, the Commission is also required to be convinced that public interest warrants exercise of discretion by the Commission in favour of passing an interim order.
9. Notwithstanding the power of Commission to grant interim relief u/s 94 (2) of Act, 2003 as stated above, the principal contention of the counsel for the respondent is that the main petition filed by the petitioner itself is not maintainable. Therefore, according to him, the petitioner is not entitled for any interim relief and the I.A., is liable to be dismissed on that ground alone. As the Commission is of the opinion that it is not appropriate for it to delve into merits of rival contentions relating to the main petition, it finds no force in the above-mentioned contention of the counsel for the respondent and the same is rejected as untenable. Similarly, the Commission is not inclined to delve into the points (a) to (d) as mentioned in the detailed order relating to maintainability of the main petition at this stage; the parties would be at liberty to make their respective pleadings on this aspect when the main petition is taken up for hearing.
10. Coming to the examination of the aforementioned parameters, it is the opinion of the Commission that admission of the main petition, subject however to the points mentioned in the order passed by the Commission on 17.11.2007 as referred to earlier, or issue of notice to the opposite party is only indicative of the Commission’s willingness to examine the merits of the issues raised by the petitioner in the main petition. Thus admission of the main petition can be treated as indicative of the existence of prima facie case in favour of the petitioner. However, that by itself is not sufficient for passing an interim order, especially in view of the order passed by the Commission on 17.11.2007 which states that the various issues raised by the petitioner in the main petition are interwoven with facts as well as law and require clarification by the respondent for examination in detail by the Commission.
11. Therefore, the contention of the petitioner that the PPA dated 06.12.2003 which contemplates interconnection facilities is sufficient to conclude that it has a prima facie case for grant of interim order with regard to such facilities cannot be accepted, especially in view of the rival contention of the respondent that there is no subsisting valid PPA. In view of the above, the other contention of the petitioner that denial of a subsisting valid PPA between the parties by the respondent itself makes a prima facie case in favour of the petitioner is not logical at all and has no legs to stand. Therefore, the Commission is of the view that denial of a subsisting valid PPA between the parties by the respondent is in no way sufficient to conclude that prima facie case exists for passing an interim order in the favour of the petitioner as contended by it.
12. Nextly, even if it is admitted that erection of line for establishing evacuation facilities will be at the cost of petitioner, that by itself will not bring the balance of convenience in favour of the petitioner as contended by its counsel. One of the defining features of the electric power industry is the high level of interdependence between generation, transmission and distribution of electricity. The extent of this interdependence is unusual enough to make the industry unique in this respect and to raise structure and policy questions that are complex. As the power system operations are driven by several technical considerations, it is not correct to state that the respondent would not suffer any prejudice whatsoever by establishing power evacuation facilities at the cost of the petitioner.
13. The contention of the petitioner that it will be subjected to irreparable harm and injury if the respondent does not prepare and estimate, establish and / or provide interconnection facilities by 15.02.2008 is hypothetical and is not based on ground realities. The question of evacuation of power comes into picture after commissioning of the power plant and availability of consumers (unless the power generated is for captive consumption, which is not the case here). Such a situation does not exist herein prima-facie, inasmuch as while on one hand, the respondent denies existence of a subsisting valid PPA with the petitioner, on the other hand, the petitioner has not adduced any evidence of going in for sale of power to others.
14. It is an admitted fact that the petitioner entered into agreement with NEDCAP as far back as on 11.11.2003 for establishing mini-hydel power project of 3 MW capacity and as per the said agreement, the petitioner should have generated power from the project by 05.11.2005. For certain reasons which are not relevant for the present, the petitioner could not execute the project in time and obtained extension from NEDCAP to generate power by 02.12.2008. In the light of the above, the statement of the petitioner that its power project is proceeding in such a manner that the expected date of commissioning would be in the 2nd week of February 2008 needs closer examination. Except making this statement, the petitioner has not placed any material before the Commission to substantiate its claim of commissioning the project by the stated date. The contention of the petitioner that it will be subjected to irreparable harm and injury, if evacuation facilities are not made available when its power plant is ready for commissioning could have carried weight, had the petitioner placed any material in support of its claim that the project would indeed be ready for commissioning by the stated date. There is lot of difference between expected date of commissioning of a power project and actual commissioning of such a project. In the facts and circumstances of the case, the Commission is not convinced that the petitioner will suffer irreparable loss if interim orders are not passed directing the respondent to provide interconnection facilities by 15.02.2008 at the cost of petitioner.
15. For all the reasons mentioned above, the Commission is of the opinion that the petitioner is not entitled for the interim relief with regard to making available arrangements by 15.02.2008 for evacuation of power. Accordingly, the Interlocutory Application filed by the petitioner mentioned above is dismissed.
This order is
corrected and signed on this 7th day of February, 2008.
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(R.RADHA KISHEN) |
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(SURINDER PAL) |
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MEMBER |
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