ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION
Hyderabad
Sri
Surinder Pal, Member
Sri. R.Radha Kishen, Member
O. P. No. 28 of 2004
M/s Gowthami Solvent Oils Pvt. Ltd, … Petitioner
and
This petition coming on for hearing on 17.02.2007, 17.03.2007 and 07.04.2007 in the presence of Sri K.Gopal Choudary, Advocate for the petitioner, and Sri.N.Jayasurya, Advocate for Respondent No.1 and Sri P.Shiva Rao, Advocate for Respondent No.2, and having stood over for consideration to this day, the Commission delivered the following:
O R D E R
This is a petition filed under Sections 11 (1) and 30 of the Andhra Pradesh Electricity Reform Act, 1998 (hereinafter, ‘Reform Act’) read with Rule 9 of the APERC (Conduct of Business Regulations) 1999, originally against Respondent No.1 seeking directions to the latter to (a) implement the order of the Commission issued vide letter No. APERC/ Secy/Dir(Engg)(1)(I)-Tr/F:PPA D.No. 2821/2003 dated:05-12-2003; (b) pay the balance amount of Rs. 4,64,580 said to be due against power bills along with interest as per the Power Purchase Agreement (hereinafter, ‘PPA’); (c) direct the respondent not to deduct any amount for increased supply on account of reduction in captive consumption; and (d) direct the respondent to amend the PPA to enable the petitioner to reduce or increase captive consumption from time to time.
2. The brief averments mentioned in the petition are as under:
(a) The petitioner is having a 2.75MW co-generation power plant and generating power since 1996. It entered into a PPA with Respondent No.1 on 22.03.2002 which was subsequently amended on 28.06.2004. The petitioner is selling surplus power to the Respondent No.1 as per the terms and conditions of the PPA. Due to reduction in self-consumption, the surplus units for sale increased and the petitioner decided to sell the same to the said Respondent as per terms of the PPA.
(b) The Commission had issued directions vide letter dated 05.12.2003 referred to above, which was confirmed by subsequent letter dated 30.01.2004, stating that the additional surplus power becoming available due to reduced captive consumption can be sold to Respondent No.1. However, the said respondent did not pay an amount of Rs.4,64,580. Upon enquiry with Respondent No.1, the petitioner was informed that the short payment was on account of deduction for supply of excess units consequent to reduction of captive consumption. The said deduction is illegal and contrary to the specific direction issued by the Commission.
(c) In spite of repeated requests, Respondent No.1 did not pay
the amount and it failed to amend the PPA, contrary to the directions of the
Commission
dated.05-12-2003.
3. Respondent No.1 submitted its comments / objections, which are as follows:
(a) It purchased the delivered energy from the project of the petitioner from 22.11.2003 to 23.03.2004 as per the provisions of the PPA @ Rs.3.48 per unit.
(b) The tariff of Rs.3.48 per unit being on the higher side has already been passed on to end-consumers and if surplus energy due to reduction in captive consumption as contended by the petitioner is also purchased at that rate, it will cause extra financial commitment to it and will force the end-consumers to face more burden. In the interest of end-consumers, it is prayed that the request of petitioner to purchase of surplus power by the respondent at Rs.3.48/unit may not be considered. The said tariff prior to 01.04.2004 was fixed on an ad-hoc basis.
(c) The Commission in its order APERC Secy/DD(Engg)/DD (P&PP)/ FSTPP/ D.No. 102/04 dated 17-01-2004, in similarly placed circumstances, directed that the surplus energy which is available with the CPPs (captive power plants) namely, M/s Nava Bharat Ferro Alloys Limited and M/s Vizag Steel Plant for export after reduction of their captive consumption shall be paid for at variable cost of the concerned CPP or the highest variable cost among the similar projects, whichever is lower. On the same analogy, the Respondent No.1 requests the Commission to fix the price of the energy at variable cost of the concerned CPPs.
(d) Surplus energy from the petitioner’s project is not dependable and purchase of the same from the petitioner will force the respondent to cut down its power purchases from cheaper sources of energy.
(e) For all the said reasons, it is prayed that the request of the petitioner may not be considered.
4. The petitioner filed rejoinder stating that:
(a) The respondent has raised irrelevant issues in response to the petition. The petition was filed for implementing the orders of the Commission dated 05.12.2003 and 30.01.2004, which have become final.
(b) The respondent is indirectly asking for review of the orders passed by the Commission. The issue of fixed and variable costs does not arise for the period prior to 01.04.2004. Hence, the respondent is liable to pay at the rate of Rs.3.48 for each unit of surplus power sold by the petitioner to it. Thus the respondent is liable to pay an amount of Rs.4,64,580 together with interest for delayed payment.
(c) With regard to the period from 01.04.2004, the Commission by its order in R.P.No.84 dated 20.03.2004 in O.P.No.1075 / 2000 had fixed the tariff. The said order was modified by the Hon’ble High Court in W.P.No. 12921 / 2004 pursuant to which the respondent is paying Rs.3 per unit from 01.04.2004.
(d) The respondent has already raised the issue of paying only variable costs on surplus exported by the petitioner consequent to reduction of captive consumption which was rejected by the Commission in its order dated 19.11.2004 and hence the respondent cannot be permitted to re-agitate the same issue on the same facts and it amounts to abuse of the process of law.
(e) For the period after 01.04.2004, there is only one bill dated 23.08.2004 which has been short-paid by respondent to an extent of 13,500 units, presumably on the ground of excess generation. The respondent may be directed to pay for the same @ Rs.3 per unit.
5. Subsequent to filing of rejoinder by the petitioner, the respondent filed additional submissions stating that:
(a) After examining the financial implications of the orders passed by the Commission, Respondent No.1 is of the opinion that public interest will be prejudiced by reason of compliance with the said orders and it has been advised to challenge the orders.
(b) The petition filed before the Commission is not maintainable. There is no provision for any party to approach the Commission for a direction to enforce its orders. Section 30 of the Reform Act relied upon by the petitioner makes it clear that the remedy of an aggrieved party is to approach the Civil court for execution of the decree. After the enactment of the Electricity Act, 2003 (hereinafter, the ‘Act’) in particular Section 173, which provides for repeal, it is doubtful whether Section 30 is still available, especially in view of Section 142 and 146 of the Act.
(c) The Commission is not analogous to a court, nor is there any procedure laid down by law for executing its orders. Once the Commission decides an issue, it becomes functus officio. It can, if at all, entertain a review petition to the extent law permits for issuance of further orders or variance of its earlier order in respect of the said subject matter. There is no question of adding any further direction to the order already passed, much less in the nature of directions sought for.
6. During hearing of the matter on 06.01.2007, the counsel for the petitioner submitted that in view of the Third Transfer Scheme (notified by Government of Andhra Pradesh on 09.06.2005) which allocated the capacity of the petitioner’s power project to Eastern Power Distribution Company of Andhra Pradesh Limited (hereinafter, ‘EPDCL’), the said company is required to be impleaded. Accordingly, EPDCL was impleaded as Respondent No.2 and notice issued to it.
7. On 20.01.2007, Respondent No.2 entered appearance and Sri P.Shiva Rao, Advocate, filed vakalat on its behalf. On 17.02.2007, counter was filed by Respondent No.2 stating that it adopts the counter already filed by Respondent No.1 and further stating that:
(a) The petition filed u/s 30 of the Reform Act is not maintainable. The Commission is not conferred with the power to execute the decree/directions and orders.
(b) There is no specific enforceable direction against the respondents, except general orders dated 05.12.2003. The said general orders of the Commission is challenged before the Appellate Tribunal for Electricity (hereinafter, ‘ATE’) and thereafter before the Hon’ble Supreme Court of India. As such, the general order did not attain finality.
(c) It is not clear whether the petitioner is seeking implementation of the order dated 05.12.2003 or seeking fresh orders with regard to its claim for payment of Rs.4,64,580 or issue of direction to the respondents to amend the PPA. The petitioner is precluded from clubbing the separate and distinct causes of action. Therefore, petitioner may be directed to elect one of the reliefs, so as to enable the respondents to contest the matter effectively.
(d) The petitioner claimed that it reduced captive use of energy and thereby it has surplus power within the limits of capacity of its project. But no meter is fixed to ascertain the actual generation of electricity by the petitioner. Installation of meters at the delivery end of the petitioner project is inevitable requirement under the provisions of Electricity Laws.
(e) The claim of the petitioner that prior to May, 2003, the respondents paid for energy even beyond the quantum that was specified in the PPA, can never be taken as a ground to compel the respondents to get a wrong perpetuated.
(f) The request of the petitioner to compel the respondents to purchase the additional surplus power after reducing the captive consumption is not within the jurisdiction of the Commission. Consequently, the prayer to amend the PPA to that effect is untenable at law.
(g) The claim for Rs.4,64,580 is not based on any justifiable grounds. The Commission in similarly placed situations directed that surplus power shall be paid for at only the variable cost, as the fixed costs were already covered in the tariff of the energy that is purchased by the licensee. For all these reasons, it is prayed that the petition filed by the petitioner may be dismissed.
8. On 17.02.2007, the counsel for the petitioner submitted arguments. While reiterating the various averments mentioned in the petition and the rejoinder, it is submitted that the petitioner is asking for implementation of the order passed by the Commission. Even though, it is not specifically pleaded either in the petition or in the rejoinder, the respondents are liable for punishment for non-compliance of orders/directions of the Commission u/s 142 and/or 146 of the Act. The respondents are deliberately defying the directions of the Commission and did not pay the amount due to the petitioner. As the respondents failed to pay the amount due to the petitioner, in spite of specific directions of the Commission, it is a fit case to hold that the respondents are squarely responsible for continuing default u/s 142 and are also liable for punishment u/s 146 of the Act. Suitable steps may be taken for prosecution as contemplated u/s 146 of the Act. Even if meter is not fixed to ascertain actual generation of energy by the petitioner as contended by the respondents, it is not a ground for not implementing the direction of the Commission.
9. Heard arguments of the counsel for respondents on 17.03.2007. While reiterating the contentions mentioned in the counters already filed, it was submitted that the directions issued by the Commission in its letter dated 05.12.2003 would have to be understood and implemented subject to exigencies and contingencies. The said directions are only advisory in nature and not mandatory. Even if it is assumed that such directions are issued purportedly in exercise of regulatory jurisdiction of the Commission, implementation or otherwise of the same cannot be termed or attributed as wilful defiance on the part of respondents. The respondents already paid amounts to the petitioner entitled to be received by it as per the PPA. With regard to surplus power, only variable charges for energy drawn can only be directed to be paid to the petitioner.
10. On 30.03.2007, on behalf of the respondents, copies of grounds of writ petition filed before the High Court of Andhra Pradesh, grounds of appeal filed before the ATE, grounds of Civil Appeal filed before the Hon’ble Supreme Court and related documents were filed. It was submitted that the said documents clearly show that the respondents challenged the orders of the Commission dated 05.12.2003, 28.01.2004 and 30.01.2004 and for that reason the matter in issue sought to be decided by the Commission is sub-judice before the Hon’ble Supreme Court of India. A cursory reading of civil appeal filed before the Hon’ble Supreme Court of India reveals that respondents herein, among others, have also challenged the letter dated 09.08.2004 issued by the Commission to Respondent No.1. The direction contained in letter dated 05.12.2003 with regard to amendment to the PPAs entered into with certain developers, including the petitioner herein, and purchase of additional/ surplus power on account of reduction in captive consumption, does not contain any time limit within which such directions are required to be complied with by the respondents. In fact, no enforceable order is passed against respondents by the Commission in the said letter. Therefore, no coercive action can be taken against the respondents herein. Neither of the respondents herein are liable to pay any money to the petitioner as the basis of the letter/order is under challenge.
11.
The
point that arises for consideration of the Commission is –
“whether the petitioner is entitled to the reliefs as prayed for in the petition”
12. At the outset it is appropriate to state that the petition is filed under Sections 11 (1) and 30 of the Reform Act read with Rule 9 of the APERC (Conduct of Business Regulations) 1999.
13. Section 11 (1) of the Reform Act only speaks of the
functions required to be performed by the Commission. As the section contains
provisions only relating to and explaining the functions of the Commission, it
is of no help to the petitioner in the present proceedings.
14. Section 30 which is invoked by the petitioner, forms, together with Sections 28 and 29, one separate Part of the Act one whole under the heading:
“ PART-IX
COMMISSION’S POWER TO PASS ORDERS AND ENFORCE DECISIONS”
It may therefore be appropriate to look at Sections 28 and 29 for better understanding of Section 30 which speaks of contravention of conditions of its licence by the licensee and consequent enforcement of the orders of the Commission passed on such contravention.
15. The relevant provision of Section 28 is sub-section (1) thereof which reads as follows :
“28 (1) Where the Commission is satisfied that a licensee is contravening, or is likely
to contravene any relevant condition or requirement of its licence, it shall by final order under section 29 and, if it thinks it appropriate, in accordance
with sub-section (2) by interim order under this section, issue such directions as it
deems proper for securing compliance.
…………”
The above provision only enumerates the powers of the Commission to take action when a licensee is contravening / disobeying or is likely to contravene any of the conditions in the licence granted to him by passing interim order comprising such directions as deemed proper by it.
16. Section 29(1) which follows the above provision and is directly connected therewith reads as follows; the sub-section (2) to (9) that follow deal with the procedure for issue of notices as contemplated in sub-section(1) ibid, and the follow-up action thereon:
“29
(1) If the Commission proposes to
make a final order or to declare an interim order to be a final order, the Commission shall give notice,-
(a) stating that
it proposes to make the final order or to declare the interim order to be a final order;
(b) setting out the information referred to in clause (b) of sub-section
(3) of section 28 in respect of the proposed final order; and
(c
) specifying the period (being not less
than 60 days from the date of publication of the notice) within which
representations or objections to the proposed order may be made; and shall
consider any representations or objections that are duly made and not
withdrawn. The Commission shall publish notice of such representations or objections and specify
a period (being not less than 30 days from the date of publication of the
notice) within which further representations or objections may be made.”
This provision enables the Commission to pass final orders after giving notice either by treating any interim order given under Section 28 as final order or passing final order afresh requiring the licensee to implement the directions given earlier or to comply with the conditions of the licence as required under the licence issued to him .
17. Section 30 (1) reads as follows:
“30 (1) Without prejudice to section 46 of this Act, all orders and directions, interim or final, passed by the Commission shall be enforceable in law as if it were a decree passed by a Civil Court.”
A combined reading of all the above three provisions makes it clear that whenever the licensee is likely to contravene or has contravened any of the provisions / conditions of the licence issued to such licence, the Commission can undertake proceedings and pass orders or directions interim or final as may be appropriate in the given set of circumstances to get the conditions of licence implemented properly. Such orders are treated as a decree as if it were passed by a competent Civil Court while rendering justice to the ordinary litigant.
18. In the instant case, while the petitioner has invoked Section 30 of the Reform Act, it has not shown any instance of contravention / violation / non-performance of any of the conditions of licence by the respondents by which act it can be inferred that the petitioner is entitled to any relief in this petition. No incident is brought out as regards violation of the licence conditions. In view of the foregoing discussion, the petitioner is not entitled to any relief under Sections 11(1) and 30 of the Reform Act.
19. However, the issue with regard to payment of amounts stated to have been deducted by Respondents from the bills of petitioner and the former’s liability to pay for the energy exported by the petitioner to them for the months of November, 2003 to January, 2004 and March, 2004 has to be viewed separately. The very fact that the respondents received power from the power plant of petitioner, with or without a valid PPA, casts a duty upon the former to compensate the petitioner for such utilisation of energy. Irrespective of the fact, that the respondents have not entered into PPA as amended by the Commission containing provision for purchase of additional/surplus power on account of reduction in captive consumption, the respondents cannot get away from the fact that energy was pumped into the grid.
20. The matter has been carefully considered. In the case of the two other developers mentioned by the respondents, specific direction regarding the price to be paid was given by the Commission, which is not the case with regard to the petitioner. However, the fact has to be taken into account that the petitioner is a Captive Power Plant, and therefore not entitled to compensation for fixed costs. The fact that the petitioner uses a Non-conventional source of fuel is not relevant to the issues in the present petition, because the aforementioned directions of the Commission refer only to the reduction in captive consumption, and the sale of surplus power consequently becoming available with the petitioner. There is, therefore merit in the contention of the respondents that the petitioner need to be compensated only to the extent of the variable cost incurred by it. It would, therefore meet the ends of justice if the petitioner were paid the variable cost.
21. For the foregoing reasons, the petition is liable to be dismissed, and is accordingly dismissed. However, the respondent has agreed to pay for the surplus power pumped into the grid at variable cost. In view of this, the respondent may pay for the surplus power supplied at variable cost.
The order is corrected and signed on this 21st day of April, 2007.
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(R.RADHA KISHEN) |
(SURINDER PAL) |
(K.SWAMINATHAN) |
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MEMBER |
MEMBER |
CHAIRMAN |
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