ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION
Hyderabad
Sri.
Surinder Pal, Member
O. P. No. 6 of 2007
M/s.
Jocil Limited,
Dokiparru,
Guntur.
Rep
by it’s Managing Director ...
Petitioner
and
rep. by its Managing Director
This petition coming on for hearing on 01.09.2007 in the presence of Sri. K.Gopal Choudary, Advocate for the petitioner, Sri. P. Shiva Rao, Advocate for Respondent No.1 and Sri. N. Jayasurya, 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 petition is filed for enforcement and for directions u/s 86(1) (b), 86(1) (e), 86(1) (f), 142 and 146 of the Electricity Act, 2003 (for short the ‘Act’) praying the Commission to (i) enforce its directions dated 05.12.2003, 28.01.2004 and 30.01.2004 and the order dated 20.06.2001 in O.P.No. 1075 of 2000 (ii) direct the respondents according to their respective liabilities to make payment of Rs. 1,47,86,334/- remaining unpaid in respect of the energy supplied during the months of May 2004 to March 2006 together with interest at 15% per annum (iii) to take such penal or other action according to law for non-compliance with directions and orders of the Commission and (iv) pass such further or other order that the Commission deems fit and expedient in the facts and circumstances of the case.
2. In brief, the averments made in the petition are as follows:
(a) The petitioner established a 6-MW Biomass co-generation power plant. A part of the electricity generated therefrom is consumed by the petitioner for its manufacturing process and the surplus electricity is sold. However, the quantity of such surplus energy varies from time to time according to the requirements of steam and the captive consumption of electricity for the petitioner’s manufacturing process.
(b) In view of the order of the Commission dated 20.06.2001 in O.P.No.1075 of 2000, whereby the Respondent No.2 (for short, ‘R-2’) was required to purchase the entire electricity or the entire surplus power generated, the petitioner entered into a Power Purchase Agreement (for short, ‘PPA’) dated 06.07.2002 which was valid up to 30.06.2003. Later, the Commission issued an order on 05.02.2003 granting renewal of consent for captive consumption up to 30.06.2004 and revised the capacity intended for captive use by the petitioner to 2 MW. In view of coming into force of the Act, consent of the Commission is no more required for captive use of any part of the energy generated from the petitioner’s plant.
(c) During the period from July 2002 upto April 2003, R-2 purchased the entire surplus electricity exported by the petitioner and made payments for the same without raising any objection. However, for the billing month of May 2003, the petitioner was paid only for 1728000 units as against the actual export of 1756500 units and the petitioner was given to understand that the balance 28500 units were considered by the respondent as exported in excess of capacity indicated in the PPA. Such deductions were also made for the months of July , August, October 2003 to January 2004 and April 2004.
(d) By letter dated 05.12.2003, the Commission in general directed R-2 to purchase additional / surplus power on account of reduction in captive consumption and by its letter dated 28.01.2004 also directed R-2 in particular to purchase the surplus power delivered by the petitioner herein and make payments. By letter dated 30.01.2004, the Commission once again directed R-2 to purchase additional / surplus delivered energy on account of reduction in captive consumption as per its directions given earlier. .
(e) However, in view of insistence of R-2 in limiting the quantity of power to be purchased from the petitioner on the basis of the capacity of only 2.4 MW in defiance of the specific directions of the Commission in its letters dated 05.12.2003, 28.01.2004 and 30.01.2004 and the order dated 20.06.2001 referred to supra, the petitioner filed O.P.No. 27 of 2004 praying the Commission to enforce compliance with its directions, to make payment of Rs.81,62,688/- which was deducted from the amount due to the petitioner, to direct the respondents herein to enter into PPA, and to punish them for non-compliance of directions. By an order dated 21.04.2007, the Commission held that the petitioner herein had failed to make out a case for punitive action against respondents u/s 142 or 146 of the Act, that direction cannot be given to respondents to enter into PPA with the petitioner and that the petitioner is entitled for payment for the surplus energy to the extent of variable cost. The petitioner is filing an appeal before the Appellate Tribunal for Electricity (for short, ‘Tribunal’).
(f) The amounts stated by the petitioner in O.P.No. 27 of 2004 related to the energy supplied to the respondents from May 2003 to April 2004. The respondents have made deductions and did not pay for the energy supplied in excess of capacity of 2.4 MW for subsequent months also. Hence, this petition is filed for the period subsequent to April 2004. On the basis of the rates as per the interim order at which R-2 is paying for the energy supplied subject to the final outcome of the appeal pending before the Hon’ble Supreme Court arising out of order of the Commission dated 20.03.2004, an amount of Rs.1,47,86,334/- remains to be paid to the petitioner in respect of the energy supplied between May 2004 and March 2006.
(g) Non-payment of the above-mentioned amount is violation of the directions of the Commission dated 28.01.2004. Further, refusal to purchase the surplus power beyond 2.4 MW is violation of the directions of the Commission dated 05.12.2003, 28.01.2004 and 30.01.2004 and order of the Commission dated 20.06.2001 in O.P.No. 1075 of 2000. As the respondents have utilized the energy, the petitioner is entitled to recover the said amount both in law and equity.
3. On behalf of R-1, counter is filed, wherein apart from offering para-wise replies, it is stated that
(a) The relief claimed by the petitioner for enforcement and for directions is not permissible under law. In order that any petition for enforcement is sustainable, there must be an enforceable order or direction existing on the date of filing of such petition for enforcement and for directions. In the instant case, neither the petitioner filed an application, nor the Commission issued any order with regard to liability for the energy delivered during the period from May 2004 to March 2006. Therefore, the petition filed by petitioner is misconceived.
(b) With regard to the surplus energy delivered, the respondent is ready to pay variable charges for the period from May 2004 to March 2006, provided such payment is towards full and final settlement of account in respect of said energy and the matter is closed. As this energy is not covered by PPA, respondent is ready to pay such amount as compensation, but not as a price.
(c) The respondent never agreed to purchase the surplus or additional energy than which is specified in the PPA. The respondent is not willing to purchase surplus power of the petitioner at a higher cost when energy is available at lower cost. The order of the Commission dated 20.06.2001 does not cast an obligation on the respondent to purchase entire surplus energy that is available with the petitioner. The respondent has not committed any violation of the orders of the Commission.
(d) Therefore, the petition may be dismissed
4. On behalf of R-2 also counter is filed, wherein apart from offering para-wise replies, it is stated that:
(a) The petitioner was required to sell only 2.4 MW of power as per the PPA and it cannot alter the quantum of export of power to grid under the guise of variation of captive consumption. Otherwise all captive power plants will deliver surplus energy to the grid under the guise of variation in captive use forcing the respondent to purchase the same which will lead to great financial repercussions.
(b) In the PPA, the capacity agreed to for sale by the petitioner and purchase by the respondent was specifically mentioned in paragraph-2 of the Preamble, Article 1.10 and Schedule-1. Non-conventional Energy Development Corporation of AP (NEDCAP) also confirmed that the petitioner could export 2.4 MW to grid for sale. Therefore, the contention that the respondent was required and obliged to purchase entire electricity or surplus power generated is not correct. The petitioner exported additional surplus energy which the respondent is not willing to purchase.
(c) It is true that the Commission issued directions by different letters to the respondent to purchase additional / surplus power, but the respondent expressed its inability to purchase surplus energy for various reasons set out in its letters dated 29.12.2003 and others. It is further submitted that the directions issued by the Commission by way of letters are only on the representation of the petitioner, but not on petitions filed by following the procedure prescribed under the APERC (Conduct of Business) Regulations, 1999. There is no willful violation or defiance of the directions issued by the Commission from time to time on the representations made by the petitioner.
(d) The petitioner, having chosen to prefer an appeal against order of the Commission in O.P. No. 27 of 2004, is precluded from stating anything with reference to the said order in the present proceedings. The amount of Rs.1,47,86,334/- claimed by the petitioner is not admissible, much less payable, in view of the facts and circumstances of the case.
(e) The petitioner has an option for third party sales in view of provisions of the Act. However, the petitioner with a malafide intention is resorting to pressure building tactics to compel the respondents to purchase more than the agreed quantity of electricity.
(f) Therefore, the petition may be dismissed
5. On 21.07.2007 on behalf of the petitioner a Memo was filed along with a copy of the order passed by the Commission in O.P. No. 21 of 2004 stating that the said order dated 17.07.2004 is relevant for the purpose of present proceedings. As the respondents have not challenged or questioned the said order, the issues decided therein have become final against the respondents herein. It is requested that the Commission may take the order 17.07.2004 into consideration while deciding the present petition filed by the petitioner herein.
6. On 25.07.2007 on behalf R-1 additional submissions were filed stating that:
(a) Appeal No. 7 of 2006 filed before the Tribunal against the order 17.07.2004 in O.P. No. 21 of 2004 was dismissed on 07.03.2007. However, the respondents filed Appeal before the Hon’ble Supreme Court against the order of Tribunal dated 07.03.2007. Therefore, the order of the Commission dated 17.07.2004 did not attain finality and therefore the said order cannot be taken into consideration for deciding the present petition filed by the petitioner.
(b) Detailed statement of energy purchased from the petitioner from the month of May 2004 to March 2006 is furnished. According to it, the petitioner delivered a total of 3,72,37,800 kwhs (units) during the said period, out of which 3,49,68,845 kwhs are considered for payment and an amount of Rs.10,15,59,032/- was paid at the tariff fixed by the Commission. The excess energy of 22,68,955 kwhs delivered during the months of May to November 2004 are not considered for payment. Thus the dispute is only with regard to excess energy of 22,68,955 kwhs delivered during May to November 2004, but not up to the period of March 2006 as claimed. For this surplus energy, the petitioner can be paid only variable cost as decided by the Commission in O.P. No. 27 of 2004 which works out to Rs. 28,81,573/-. Thus it is not correct to state an amount of Rs. 1,47,86,334/- remains unpaid by the respondents on account of excess energy delivered.
7. On 31.08.2007, the petitioner filed reply to the additional submissions filed on behalf of R-1, stating that :
(a) Filing of additional submissions as stated supra, which was signed by Chief General Manager of Central Power Distribution Company of AP Ltd., which is not a party to the present proceedings is objectionable.
(b) Mere filing of an appeal does not affect binding nature and / or the enforceability of an order, unless the same is stayed by a competent appellate court. The order of Commission in O.P. No. 21 of 2004 merged with by the judgment of ATE dated 07.03.2007 in Appeal Nos. 7 of 2006 and the same is binding upon the respondents as well as the Commission.
(c) The contention of the respondents that quantity of energy mentioned in column (d) of the table furnished in the additional submissions of R-1, i.e., only 22,68,955 kwhs, could properly be the subject matter of dispute is not correct and tenable. The respondents are bound and obliged to purchase entire energy, or up to at least 3.4 MW capacity, consequent to reduction in captive consumption and in pursuance of directions of the Commission.
8. Heard the counsel for the parties concerned.
9. On behalf of the petitioner, its counsel submitted that :--
(a) Basic issues that arise for consideration of the Commission in this case were already dealt by it in O.P.No.27 of 2004, and the Commission arrived at a decision on 21.04.2004. However, the said order of the Commission in O.P.No.27 of 2004 is challenged by the petitioner herein before the Tribunal.
(b) Vis-à-vis the particulars of energy supplied for
different months, the provisional rates applied, the amounts payable, the
amounts received and the balance of unpaid amount as shown by the petitioner in its petition under
paragraph 42, R-1 in its additional submissions filed on 25.07.2007 furnished a
table (paragraph-5) wherein the energy considered for payment is shown as
3,49,68,845 kwhs, which is not correct.
The respondent should have taken exportable capacity of 3.4 MW for
arriving at units of energy considered for payment under column (c) of the said
table. For the said reason, the
contention of R-1 that controversy should be limited to the units of excess
energy received by it as shown under column (d) therein is also not
correct.
(c) In the order of the Commission dated 17.07.2004 in O.P.No.21 of 2004 at paragraph-6, the Commission categorically asserted that it directed R-2 herein to incorporate a provision in all the existing and future PPAs with non-conventional energy developers to enable purchase of surplus/additional power made available by the developers on reduction of captive consumption or otherwise. Similarly at paragraph-8 therein, the Commission observed that the only restriction that it imposed is in regard to payment for the sale of energy to R-2 when the generation exceeds the installed capacity. A developer was permitted to export additional power on reduction of his captive consumption during the exigency or otherwise subject to the above condition. The said order of the Commission was upheld by the Tribunal as the Appeal No.7 of 2006 preferred by R-2 was dismissed. Thus the order of the Commission dated 17.07.2004 got merged with order of the Tribunal and became a binding precedent for the Commission. Therefore, the Commission has to take a decision on the present petition taking into consideration the order passed by it on 17.07.2004 in O.P.No.21 of 2004.
10. On behalf of the respondents, its counsel submitted that :–
(a) In short, the scope of the petition is limited. Except that petition in O.P.No.27 of 2004 was filed by the petitioner for payment of energy exported by it for certain months up to April, 2004, the present claim is for payment of energy exported by the petitioner subsequent to April, 2004. Except the period for which payments are claimed, there is no difference between the present proceedings and the earlier proceedings. For the purpose of arriving at a decision, neither the petitioner can re-agitate the issue with regard to payment for the energy exported by it to the grid nor can the Commission re-appraise the decision arrived at by it in O.P.No.27 of 2004. Thus the present proceedings have to be necessarily decided in line with the decision of the Commission in O.P.No.27 of 2004.
(b) Notwithstanding the contention of the respondents that order of the Commission dated 17.07.2004 passed in O.P.No.21 of 2004 did not attain finality in view of their preferring an appeal before the Hon’ble Supreme Court as stated supra, the case of the petitioner in O.P.No.21 of 2004 stands totally on a different footing from that of the petitioner herein. In the case of the petitioner in O.P.No.21 of 2004, there is a valid subsisting PPA between the parties. On the contrary, the PPA entered into between the petitioner herein with the respondent ceased to be valid on 30.06.2003.
(c) That apart, the petition filed by the petitioner could be at best is an entitlement petition, but not an execution petition and order of the Tribunal dated 07.03.2007 cannot become the basis for deciding entitlement of the present petition filed by the petitioner.
11. The issue that arise for consideration is –
“whether the petitioner is entitled for the reliefs sought for”
12. Careful consideration of the material placed before the Commission reveals that the issues that arise for consideration of the Commission in this petition were already dealt by it earlier in another proceedings between the self-same parties viz., O.P.No.27 of 2004. However, there are some differences.
13. The petition in O.P.No.27 of 2004 was filed for enforcement of the direction of the Commission, without mentioning the provisions of law and also for taking appropriate action according to law u/s 142 and / or 146 of the Act. The present petition is, however, filed also for enforcement of same direction, u/s 86(1)(b), 86(1)(e) and 86(1)(f) and 142 and 146 of the Act. Apart from requesting the Commission to take penal action against the respondent u/s 142 and / or 146 of the Act, the essence of the prayer of the petitioner in both the petitions relates to payment of certain amounts which remained unpaid towards energy exported by the petitioner, but for different periods, which as per the petitioner, the respondents ought to have paid in view of directions of the Commission dated 05.12.2003, 28.01.2004 and 30.01.2004 and order of the Commission dated 20.06.2001 in O.P.No.1075 of 2000.
14. Whatever it might be, the crux of the present issue before the Commission is with regard to payment of an amount supposed to have remained unpaid in respect of the energy supplied by the petitioner during the period from May, 2004 to March, 2006 to the respondents. While the petitioner contends that an amount of Rs. 1,47,86,334/- remains unpaid on that count, the respondents state that the petitioner is entitled for payment of Rs.28,81,573/- in pursuance of orders of the Commission dated 21.04.2007 passed by it in O.P.No.27 of 2004.
15. In paragraph-42 at page 11 of the petition, it is mentioned in a tabular form that a total of about 37.24 million units of energy were supplied by the petitioner during the period mentioned above. Towards cost of the said units of energy, the petitioner claims that it is entitled for payment of about Rs.11,63,45,366/- from the respondents at the rates mentioned in the said table. Out of the said amount, the petitioner was paid Rs.10,15,59,032/- and an amount of Rs.1,47,86,334/- remains unpaid. As seen from the table, the petitioner took into consideration all the energy supplied by it to the grid. On the other hand, R-1 in its additional submissions filed on 25.07.2007 (notwithstanding the contention of the counsel for the petitioner that the said additional submissions was signed by Chief General Manager, APCPDCL) while admitting that the petitioner delivered in all about 37.24 million units of energy stated that only 34.97 million units of energy were considered for payment as per the PPA at the tariff fixed by the Commission, even though the PPA between the parties was valid up to 30.06.2003. According to the respondents, the excess units of energy delivered over and above 2.4 MW as per the PPA, which was subsisting between the parties i.e., 2.27 million units of energy, were not required to be purchased by the respondents at all. However, in view of the order of the Commission in O.P.No.27 of 2004, R-1 is ready to pay for the surplus energy delivered at the rate of variable charges, provided that such payment is towards full and final settlement of the account in respect of such excess energy.
16. Thus while the petitioner takes exportable capacity of 3.4 MW into consideration for arriving at the amount remaining unpaid to it, the respondents vehemently oppose the said contention stating that they are liable to pay for 2.4 MW exported by the petitioner at the tariff fixed by the Commission, which was in fact paid and are willing to pay for the excess energy delivered by the petitioner over and above 2.4 MW at the rate of variable cost of energy in line with orders of the Commission dated 21.04.2007 in O.P.No.27 of 2004.
17. After thorough examination of the matter, including the order passed in O.P.No.27 of 2004, the Commission is of the opinion that there is force in the contention of the counsel for the respondents, especially in view of the fact that there is no subsisting and valid PPA between the parties herein. The reliance placed on behalf of the petitioner on the order dated 17.07.2004 in O.P.No.21 of 2004 will not help the cause of the petitioner for several reasons, including that the facts that fell for consideration of the Commission in that case were different, especially the existence of a valid and subsisting PPA in that case.
18. In view of the above, the respondents are directed to pay an amount of Rs.28,81,573/- to the petitioner within four weeks of receipt of this order without interest and thereafter, with interest @ 10% per annum. If the petitioner is willing to receive the said amount and the respondents refuse to pay the same, cause of action to initiate punitive action against the respondents will arise. For the said reason, punitive action u/s 142 and or 146 of the Act cannot be taken against the respondents in this proceedings. Ordered accordingly.
The order is corrected and
signed on this 14th day
of September, 2007.
|
Sd/- |
Sd/- |
Sd/- |
|
(R.RADHA KISHEN) |
(SURINDER PAL) |
(K.SWAMINATHAN) |
|
MEMBER |
MEMBER |
CHAIRMAN |
CERTIFIED COPY