ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION
Hyderabad
Sri.
Surinder Pal, Member
Sri. R.Radha Kishen, Member
O.P.
(SR) No.58 of 2006
1. Transmission Corporation of Andhra Pradesh Limited.
2. Andhra Pradesh Power Co-Ordination Committee
3. Andhra Pradesh Central Power Distribution Company Ltd.
4. Andhra Pradesh Southern Power Distribution Company Ltd.
5. Andhra Pradesh Northern Power Distribution Company Ltd.
6. Andhra Pradesh Eastern Power Distribution Company Ltd. … Petitioners
and
1. Andhra Pradesh Generation Corporation Limited,
2. Lanco Kondapalli Power Pvt. Limited, Kondapalli
4. Spectrum Power Generation Limited
5. GVK Industries Limited
6. Reliance Energy Limited
7. Srivathsa Power Projects Limited … Respondents
This petition coming on for hearing on 05.05.2007 in the presence of Sri P. Shiva Rao, Advocate, for the petitioners; Sri. K. Gopal Choudary, Advocate for R-1, Sri. C.Kodanda Ram, Advocate for R-2, Sri. M.G. Ramachandran, Advocate for R-3, Sri. Manoj Kumar, Advocate for R-4, Sri. D.V.S.S. Prasad, Advocate for R-5 and Sri. V.R.N. Prasanth, Advocate for R-7 and having stood over for consideration to this day, the Commission delivered the following:
This petition is filed under Sub-sections (1), (2), (3) and (4) of Section 33 read with Sections 143 and 144 of the Electricity Act, 2003, before the Adjudicating Officer of this Commission, seeking issue of directions to the respondents:
(i) to pay the amount of Rs.9.017 cr towards the loss sustained by the petitioner No.1 for the period from 01.04.2004 to 31.03.2005 as specified in Annexure-I to the petition;
(ii) to pay an amount of Rs.14.700 cr towards the loss suffered by the petitioner Nos. 3 to 6 for the period from 1.4.2005 to 31.3.2006 as specified in Annexure-II ibid and
(iii) to pay an amount of Rs. 2.0701 cr towards the loss suffered by the petitioner Nos. 3 to 6 for the period from 1.4.2006 to 30.9.2006 as specified in Annexure-III ibid.
2. The averments made in the petition in brief are as follows:
a) The petitioner No. 1 was engaged in purchase of energy and transmission of power till June 2005. Subsequently with the issue of the Third Transfer Scheme by Government of Andhra Pradesh (for short, ‘GoAP’), the function of power purchase has been undertaken by petitioners No. 3 to 6 (for short, ‘DISCOMs’). For co-ordinating the business of purchase of energy on behalf of DISCOMs (distribution companies), petitioner No.2 was constituted by GoAP vide G.O.Ms.No.59 dated 07.06.2005. However, as far as maintenance and operation of load dispatch centre is concerned, petitioner No.1 is operating the same as per Section 31(2) of the Electricity Act, 2003 (for short, ‘the Act’) based on the direction of GoAP. Thus all the petitioners are required to join together in filing this petition against the respondent-generators.
b) Section 33 of the Act contemplates achieving maximum economy and efficiency in the operation of power system in the State and the said Section deals with operation of State Load Dispatch Centre (for short, ‘SLDC’). Due to non-compliance with the directions of SLDC by the respondent-generating companies, the Commission has got jurisdiction to decide the dispute u/s 33(4) as well as u/s 143 and 144 of the Act.
c) It is inevitable on the part of Generating Stations, Licensees or any other person using the State grid, to comply with the instructions of SLDC forthwith. However, some gateways are provided to get relief from compliance of instructions of SLDC. But the respondents have not taken recourse to such relief under grid code for non-compliance of the backing down instructions of SLDC.
d) Further, the necessity of compliance with the instructions of SLDC has been outlined u/s 43 scheduling and dispatch of the code of technical interface (Grid Code) 2001 approved by the Commission. Non-compliance with the instructions of SLDC by the respondent-generators amounts to violation of the Grid Code.
e) Due to non-compliance with instructions of SLDC by the respondent-generators, the other generators having lesser variable cost of generation had to be backed down to operate the power system in a safe and secured manner. The said indiscipline of respondents resulted in higher cost of purchase of power by the licensees only to unjustly burden the end-consumers. The financial burden on the applicants or the end-consumers, due to non-compliance with the SLDC instructions by the respondents is set out in detail in the annexure sheet appended to the petition. The petitioners have submitted the details of non-compliance to Commission every month.
f) For the years 2004-05, 2005-06 and 2006-07 (up to September 2006) petitioner No. 1 suffered financial loss of Rs. 25.7871 cr due to non-compliance with backing-down instructions. In respect of thermal generating stations of R-1, the backing-down instructions of SLDC are based on the revised technical limits, as suggested by R-1. Like wise, after June, 2005, all the four DISCOMs (petitioners No.3 to 6 herein) have sustained financial loss, the working sheet giving details of loss due to non-compliance etc., is submitted as Annexure-II to the petition.
g) Cause of action to file the petition arose when the respondents failed to comply with the instructions of backing down and when they failed to make good the loss suffered by the petitioners.
h) In view of the limitations provided in Section 158 of the Act and other provisions in the repealed enactments, though there is an arbitration clause in the Power Purchase Agreement (for short, ‘PPA’), the same is not enforceable and the Commission has power to adjudicate upon the dispute as per Sections 33(4), 143 and 144 of the Act.
3. Before admitting the petition, notice was ordered to the petitioners on the question of (a) maintainability in the absence of proof of giving directions to the respondents and non-compliance of such directions by the respondent-generators, and (b) as to how the petitioners are entitled for crores of rupees as claimed in the petition, when a generating company is liable to pay penalty not exceeding Rs.5 lakh. A copy of each of the notice was communicated to all the respondents herein.
4. In response to the notice issued, several counsel entered appearance and filed vakalats on behalf of their respective respondent-generators. On behalf of R-3, reply was filed stating that:
a) R-3 is a generating company owned and controlled by the Central Government within the meaning of Section 79 (1) (a) of the Act. All the matters, including adjudication of any dispute between it and the petitioners are under the regulatory control, supervision and adjudication by the Central Electricity Regulatory Commission constituted under the Act, and not therefore, by this Commission which is a State Commission. Therefore, this Commission has no jurisdiction to entertain the petition filed against R-3 and accordingly, the same is liable to be dismissed summarily as not maintainable.
b) The petitioners earlier filed a similar petition being O.P. No. 17 of 2005 and the same was not entertained by the Commission herein. The present petition filed for the similar relief is barred by the principles of res-judicata.
c) Grid Code defined u/s 2 (33) of the Act includes the Grid Code specified u/s 79 (1) (h) of the Act and does not include State Grid Code specified by a State Commission u/s 86 (1) (h) of the Act. The electricity sector in India is operated in an integrated manner. Electricity operations are not isolated state-wise and at present, integrated grid is on regional basis.
d) This respondent (R-3) followed the backing-down instructions issued by SLDC from time to time. Simhadri station of R-3 has been operated under the technical limits accepted by petitioner No. 1 and other similar technical limitations. A substantial portion of the deviations from the generation schedule alleged by the petitioners has been on account of generation up to technical minimum limit as explained in the reply.
e) The instruction given by petitioner No. 1 for backing down and normalization can be implemented only after allowing time for the ramping down / ramping up of the machines and it is technically not possible to undertake instantaneous backing down. This is also recognized under the IEGC provisions.
f) The respondent has been carrying out backing-down / normalization instructions considering appropriate ramping down/ ramping up time as duly communicated to SLDC and accordingly deviation in generation from the schedule is not to be taken as not following the backing-down instruction of SLDC.
g) Simhadri Station of R-3 has operated its machines as per directions of SLDC in line with the provisions of the Grid Code subject to the technical and safety requirements of the operating machines.
h) For all the reasons mentioned in the reply, it is prayed that the petition filed by the petitioners is liable to be dismissed with costs as not maintainable and is without any merit.
5. Heard arguments of the parties concerned.
6. Before submitting arguments on behalf of the petitioners, its counsel pointed out that notices should not have been given to respondents before admitting the petition filed by the petitioners. As per the APERC (Conduct of Business) Regulations 1999 (for short, ‘CBR’) opportunity of being heard is required be given to the party which files a petition before refusing admission. Nevertheless, the counsel preferred to leave the issue to the decision of the Commission on this procedural aspect.
a) With regard to petitioner No. 1 joining the proceedings before this Commission, it is also pointed out by the counsel that the functions of SLDC whose backing down instructions were not complied with by the respondents herein are being discharged by petitioner No. 1 and hence it also joined as a party to the present proceedings.
b) On the question of maintainability, the counsel for petitioners submitted that subsequent to filing of the petition, a Memo was filed on behalf of the petitioners on 03-05-2007 furnishing documents evidencing proof of issue of backing-down instructions and non-compliance therewith by the respondents; this includes two books consisting of instructions issued by SLDC and Compact Disks containing generation data frequency for different periods.
c) Petitioner Nos. 3 to 6 have suffered loss because the respondents have not complied with directions of petitioner No. 1 and hence they are included in the proceedings. While adjudicating the quantum of penalty u/s 33 of the Act for non-compliance of directions of SLDC, the adjudicating officer shall have to pay due regard to the amount of disproportionate gain or unfair advantage earned by the respondent-generators concerned as a result of non-compliance of the directions of SLDC. Therefore, if the Commission comes to the conclusion that loss suffered by Petitioner Nos. 3 to 6 can be ascertained along with disproportionate gain made by generators, compensation can be awarded to the said petitioner-DISCOMs. Otherwise, the Commission can give a finding on the disproportionate gain made by the generators and levy penalty accordingly.
d) If after enquiry, the Commission comes to the conclusion that the respondent-generators have not complied with the backing-down instructions of SLDC, penalty not exceeding rupees five lakh may only be levied as per the provisions of the Act. To that extent the petition is maintainable.
7. On behalf of R-1, its counsel submitted that:-
a) The petition is totally misconceived. It could have been filed for appointing an adjudicating officer.
b) The details regarding nature of instructions given, the time they were given and to which generator among the respondents herein and when they were disobeyed by the such respondent have not been furnished. The details furnished in the Compact Disks contain generation particulars of the last four years and one has to figure out the alleged non-compliance with the instructions by oneself.
c) Petitioner No. 2 has no legal personality. The inter-relationship between petitioner Nos. 3 to 6 to claim common compensation is neither stated nor explained. Therefore, joinder of all these petitioners is bad in law.
d) For all these reasons, the petition is liable to be dismissed in its entirety as not maintainable.
8. On behalf of R-3, its counsel submitted that the petitioner has not adverted to the order dated 10.08.2006 passed by the Commission in O.P.(SR) No. 41 of 2006 in the present petition before the Commission and explained as to how it is maintainable, especially in view of the fact that the Commission had refused to admit the earlier petition as not maintainable. The cause of action is same in both the petitions.
9. The counsel appearing for other respondent-generators chose to adopt the submissions and arguments advanced above.
10. The point that arises for consideration is, ‘whether the petition is maintainable’.
11. Before adverting to the rival contentions raised in the present petition, it is just and necessary to refer to the petitions filed earlier by the petitioner(s) herein. In the year 2005, petitioner No.3 herein filed a petition u/s 33 r/w 86 of the Act alleging non-compliance with backing-down instructions of SLDC by the generators who are also the respondents in the present petition, with a request to approve the proposal of non- payment of variable cost to those generators who have injected energy into grid by not complying with the dispatch instructions of SLDC. The said petition was admitted as O.P.No.17 of 2005 on file of this Commission and notices were issued to the respondents. However, on 03.03.2006, the sole petitioner therein which is the petitioner No.3 herein filed a petition under clause 55 of the CBR seeking leave of the Commission to permit it to withdraw the main petition filed by it in O.P.No.17 of 2005. On 25.03.2006, permission to withdraw the petition was granted with the liberty to initiate proceeding afresh. Accordingly the said petition was dismissed as withdrawn.
12. On 15.06.2006, petitioners herein filed a petition under sub-section (1) to (4) of Section 33 r/w Section 86(1)(f) of the Act seeking certain directions to the respondents therein. The respondents therein are no other than the respondents in the present petition.
The Commission after careful consideration of the matter passed an order in O.P.(SR) No.41 of 2006 holding that petition u/s 33 of the Act for recovery of financial loss is not maintainable as detailed in paragraph 10 of its order dated 10.08.2006 and that it cannot entertain petition u/s 86(1)(f) of the Act for the reasons detailed in paragraphs 11 and 12 of its order referred to above.
13. Curiously, the present petition is filed under sub-sections (1) to (4) of Section 33 r/w Sections 143 and 144 of the Act, not before the Commission, but before the Adjudicating Officer of the Commission (even before any appointment as such by the Commission) and in spite of the finding given on 10.08.2006 by the Commission holding that the petition filed u/s 33 of the Act for recovery of financial loss is not maintainable. The petitioners should have taken care and explained as to how the present petition, also filed u/s 33 of the Act, is now maintainable. Instead of doing so, the petitioners have chosen to file the present petition repeating more or less the same pleadings as made in the earlier petition filed by them on 15.06.2006. In spite of being afforded an opportunity, maintainability of the present petition u/s 33 of the Act is not explained in the present proceedings. In view of finding of the Commission with regard to maintainability of the petition u/s 33 of the Act in its order dated 10.08.2006, it is not necessary to delve in detail on this aspect in this petition, since finding given earlier in this petition is binding on the petitioners. The petitioners have not placed any material that the said finding of the Commission with regard to maintainability of the petition u/s 33 of the Act has since been set aside by a competent court of law.
14. Apart from section 33 of the Act, the petitioners have also invoked Sections 143 and 144 of the Act in the present proceedings. Therefore, it is necessary to refer to the said provisions, which read as follows:
“143. Power to adjudicate.
(1) For the purpose of adjudging under this Act, the
Appropriate Commission shall appoint any of its Members to be an adjudicating
officer for holding an inquiry in such manner as may be prescribed by the
Appropriate Government ,after giving any person concerned a reasonable
opportunity of being heard for the purpose of imposing any penalty.
(2) While holding an inquiry, the adjudicating
officer shall have power to summon and enforce the attendance of any person
acquainted with the facts and circumstances of the case to give evidence or
produce any document which in the opinion of the adjudicating officer, may be
useful for or relevant to the subject-matter of the inquiry, and if, on such
inquiry, he is satisfied that the person has failed to comply with the
provisions of section 29 or section 33 or section 43, he may impose such
penalty as he thinks fit in accordance with the provisions of any of those
sections.
144. Factors
to be taken into account by adjudicating officer.
While adjudicating the quantum of penalty under
section 29 or section 33 or section 43, the adjudicating officer shall have due
regard to the following factors, namely:-
(a)
the
amount of disproportionate gain or unfair advantage, wherever quantifiable,
made as a result of the default;
(b)
the
repetitive nature of the default.”
15. As seen from Section 143, the Commission has the power to appoint any of its Members to be an adjudicating officer under sub-section (1) thereof. Sub-section (2) of the said section empowers such adjudicating officer to summon and enforce attendance of any person acquainted with the facts and circumstances of the case to give evidence or produce any documents. Upon conducting enquiry, it is for the adjudicating officer to arrive at a decision with regard to compliance or otherwise with the directions of the SLDC and to levy penalty as enumerated u/s 33 of the Act. Section 144 is an enabling provision of law which gives guidance to an adjudicating officer with regard to levy of quantum of penalty.
16. As seen from the pleadings and reliefs claimed in the present petition, there is no request for appointment of any of the Members of the Commission as an adjudicating officer to hold an enquiry for the purpose of imposing any penalty for the alleged non-compliance with the directions of SLDC. On the other hand, directions are sought to be issued to the respondents herein for payment of certain amounts towards loss sustained by the petitioners, which is not covered by Section 33 of the Act.
17. In this context, it is useful to refer to the finding earlier given by the Commission on 10.08.2006 at para 10 of its order in O.P.(SR) No.41/2006, which reacts as follows:
“The recovery of the loss with regard to grid operations is not covered
under Section 33 of the Act ibid. The purpose of Section 33 of the Electricity
Act, 2003 is only to see that safe, secure and integrated operation of State
grid is achieved. In the present case,
the petitioners have not approached the Commission to direct the concerned respondent-generator
to implement the directions given by SLDC to maintain integrated grid
operations properly and for achieving maximum economy and efficiency in
operation of power system in the State.
Moreover the relief sought for is to direct the respondents to pay
certain amounts which are said to represent the quantum of loss sustained by
the petitioners herein for the respective periods as mentioned in the
petition. None of the provisions of
Section 33 ibid enables the Commission to assume any power whatsoever to direct
recovery of loss on account of power purchases by the petitioners at higher
cost due to non-compliance of directions of SLDC by any generating
company. The said section only provides
for the levy of penalty, by SLDC. Hence the petition filed u/s 33 of the
Electricity Act, 2003, for recovery of financial loss, is not maintainable.”
18. As per the Act, if any dispute arises in relation to any direction given under sub-section (1) of Section 33 by SLDC in a state for ensuring the integrated grid operations and for achieving the maximum economy and efficiency in the operation of power system in that state, it shall be referred to the Commission for decision under sub-section (4) of Section 33. Then for the purpose of adjudicating, the Commission is empowered to appoint any of its Members to be an adjudicating officer for holding an enquiry. Thus in the instance case, if warranted, a dispute with regard to non-compliance with the directions of SLDC could have been raised before the Commission u/s 33(4) of the Act with a request to appoint an adjudicating officer u/s 143 of the Act for holding an inquiry. Instead, as pointed out above, the present petition is filed straightaway before the Adjudicating Officer even before such an appointment is made by the Commission u/s 143. Thus the petition is totally mis-conceived and is liable to be dismissed.
19. For all the reasons mentioned above, the
Commission is of the view that the petitioners have failed to make out a case
for the maintainability of the petition.
In the result, the petition is not admitted as not maintainable.
The
order is corrected and signed on this 16th day of May, 2007.
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(R.RADHA KISHEN) |
(SURINDER PAL) |
(K.SWAMINATHAN) |
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CHAIRMAN |