ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION

 

Hyderabad

 

 

Dated: 07-03-2007

 

 

Present

 

Sri K. Swaminathan, Chairman

Sri Surinder Pal, Member

Sri. R.Radha Kishen, Member

 

 

O. P. No. 2 of  2007

 

 

Between 

 

M/s Balaji Energy Private Limited,

1-2-234/13/37 & 38, 2nd Floor, Aravind Nagar Colony,

Domalguda, Hyderabad-500 029                                                                                                         …    Petitioner

 

 

                                                                 and

 

 

1. Transmission Corporation of Andhra Pradesh Limited,

     Vidhyut Soudha, Khairatabad, Hyderabad.

 

2. Southern Power Distribution Company of A.P. Ltd.,                     

    19-3-13 (M) Upstairs, Renigunta Road, Tirupati.                                                                               ...    Respondents

 

 

This petition coming on for hearing on 03.02.2007 and 17.02.2007 in the presence of Sri J.Ugra Narasimha, Advocate and Sri. L.Venkata Rami Reddy, Whole Time Director, M/s Balaji Energy (Private) Limited for the Petitioner, and Sri P. Shiva Rao, Advocate, for the Respondents,   and having stood over for consideration to this day, the Commission delivered the following:

 

 

 

O R D E R

 

           This petition is filed for the grant of consent by the Commission for the Power Purchase Agreement (hereinafter,  ‘PPA’) dated 31.01.2005 stated as deemed to have been entered into by the Petitioner with Respondent No.1 which was subsequently transferred by the Government of Andhra Pradesh (hereinafter, ‘GoAP’) to Respondent No.2 through Gazette Notification dated 09.06.2005 notifying the Provisional Third Transfer Scheme (termed ‘Provisional’ by GoAP as it reserves for a period of two years the right to alter, vary, modify, etc. the terms of this Scheme) and to pass such other order or orders as the Commission may deem fit and proper in the circumstances of the case.

 

2.        The following are the averments made in the petition:

 

(i)        Respondent No.1 (hereinafter,  ‘R-1’) entered into a PPA with the petitioner on 28.10.2000 for purchase of power for a period of 20 years from the latter’s mini-hydel power project.  R-1 in its letter dated 07.07.2004 informed the petitioner that this Commission had not given its consent to the PPA entered into on 28.10.2000 on the plea that it has to be entered into in the standard format approved by the Commission on 29.05.2001 for mini- hydel power projects for obtaining consent from it.  Thereafter, the petitioner entered into PPA with R-1 on 31.01.2005 in the standard format approved by the Commission. R-1 sent the said PPA to the Commission on 03.02.2005 for its consent.

 

(ii)       GoAP in its Gazette Notification dated 09.06.2005 mentioned above transferred all the powers of PPAs, contracts, obligations of R-1 in regard to Bulk Supply Undertaking and PPAs to the Distribution Companies (hereinafter, ‘DISCOMs’) and the project of the petitioner was allotted to Respondent No.2 (hereinafter, ‘R-2’).  The Petitioner is a party to all the proceedings of the Commission relating to fixation of rates, etc.

 

(iii)      As irrigation authorities issued schedule for release of water with effect from 28.09.2005, the petitioner requested R-2 to connect petitioner’s units to its grid for generation of power and to deliver the power generated to itself.  But to the surprise of the petitioner, R-2 raised a new issue that the petitioner should get consent for its PPA and then only its units will be connected to the grid. Accordingly, R-2 advised the petitioner to approach R-1.  After the petitioner approached it, R-1 recommended to the Commission in October, 2005 for issue of consent to the PPA dated 31.01.2005.  The Commission by its letter dated 22.10.2005 returned the PPA of the petitioner along with other PPAs to R-1 stating that powers of R-1 stood transferred and vested with DISCOMs who were accordingly advised to examine these PPAs in the light of Commission’s Renewable Power Purchase Obligation (hereinafter, ‘RPPO’) Order dated 27.09.2005 (in O.P.No.9 of 2005), and keeping in view the provisions of Regulation No.2 of 2005 on the terms and conditions of Open Access.

 

(iv)      On 24.10.2005, the petitioner informed the Commission that the PPA of the petitioner is an old PPA and RPPO Order and Open Access policy orders are not applicable to it. The R-1 recommended to the Commission in the month of October, 2005, for issue of consent. The said recommendation of R-1 is binding on R-2, the latter being the successor entity of the former.

 

(v)       As the petitioner fulfilled all terms and conditions of the respondents and the Commission, and that the petitioner has no role to play for the consent of the PPA, the consent is deemed to have been granted to the PPA dated 31.01.2005.  In view of the transfer of the PPA by GoAP, it is deemed that the PPA entered into by the petitioner on 31.01.2005 has been consented to and is binding on both the petitioner and R-2.  Moreover, R-2 has connected the power supplied by the petitioner to its grid on 31.12.2005 and 02.01.2006 and the petitioner is supplying power to the grid accordingly.  But in view of non-grant of consent by the Hon’ble Commission, the PPA entered into by the petitioner has not been implemented in its full force.  Unless, the consent is granted by the Commission, R-2 may not implement the PPA in its full force. Hence, this petition.

3.        As directed by the Commission, the petitioner filed on 19.01.2007, a copy of the PPA dated 31.01.2005 as additional material papers, with the petitioner’s agreement dated:04.10.2000 with NEDCAP as Schedule 3 thereto.

 

 

4.        On 03.02.2007, R-1 and R-2 filed common objections through their counsel and prayed that the Commission may dismiss the petition. On their behalf, it is stated that:-

 

(i)        The petition filed by the petitioner for the grant of consent to the PPA dated 31.01.2005 by the Commission is not maintainable at law and facts on record.   The PPA sought to be approved is not in accordance with the RPPO Order of the Commission dated 27.09.2005 and the Regulation No.2 of 2005 on Open Access issued by the Commission.

 

(ii)       As per the location of the project of the petitioner, it falls within the jurisdiction of R-2.  Therefore, R-1 is not necessary or proper party to these proceedings.

 

(iii)      As directed by the Commission in its letter dated 22.10.2005, R-2 made all efforts to persuade the petitioner to agree for negotiations in the light of RPPO Order dated 27.09.2005 and Regulation No.2 of 2005. But the petitioner was adamant and stuck to its stand not to enter into PPA to be in consonance with aforesaid orders of the Commission.  As the stand taken by the petitioner is inconsistent / contrary to the general orders which are applicable to all NCE projects, the petitioner is not entitled for approval of the PPA.  In pursuance of the said two orders of the Commission, several NCE developers have accepted negotiated terms and entered into PPAs.  The respondents being public undertakings, are unable to enter into PPAs with different terms and conditions in respect of the same category of projects, and doing so would amount to discrimination.

 

(iv)      It is not correct to state that the petitioner has no role to pay to get the consent of the Commission. It is the obligation of the parties to the agreement, more particularly the petitioner to get consent, otherwise it would be considered that there is no concluded contract between the parties. The contention that the general orders of the Commission are not applicable to the petitioner as the PPA of the petitioner is old, is not correct.  Until consent is granted by the Commission, it can be considered that there is no binding contract between the parties.  R-2 being independent separate juristic person and having separate financial obligation, is not bound by the proposals made through PPA entered into by R-1. Therefore, the claim of the petitioner that the recommendation made by R-1 is binding on R-2 is not acceptable under law.  Had there been any concluded contract, the situation would have been different.  Thus the petitioner is overlooking an important and factual aspect of the matter.

 

(v)       At the request of the petitioner, pending finalization of the price, R-2 agreed to take energy at the price of Rs.2.69 per unit up to the limit of 35% PLF,  beyond which Re.0.25  per unit would be payable.  Thus the petitioner is being paid for the energy delivered to R-2. Participation of the petitioner in the earlier proceedings before the Commission in the matters involving tariff to NCE projects is irrelevant for the present issue.  Hence the petition may be dismissed.

 

5.        Heard the counsel for the petitioner and the Director of the petitioner company. On 03.02.2007, the counsel for the petitioner while reiterating the various averments mentioned in the petition, vehemently argued that in view of the Provisional Third Transfer Scheme issued by GoAP vide G.O.Ms.No.58, Energy (Power-III), dated 07.06.2005 and notified on 09.06.2005, R-2 had stepped into the shoes of R-1, and  being the successor entity of R-1,  cannot review the recommendation already forwarded by its predecessor-in-interest in the light of Commission’s RPPO Order and Open Access policy, which orders were issued subsequent to the signing of PPA on 31.01.2005.  R-2 is, therefore, estopped from examining the PPA in the light of said two orders of the Commission.  The Director of the petitioner company added that R-1 gave an impression that consent to PPA will come automatically.  Though it is inconvenient, the petitioner entered into PPA for the second time on 31.01.2005 in the format approved by the Commission.  As PPA is not consented to by the Commission, the petitioner is losing a lot of money.  The petitioner company is being paid on an adhoc basis and several bills are also due for payment.  The project of the petitioner company is likely to be declared as NPA (non-performing asset, akin to a doubtful debt) by IREDA. Written arguments were also filed on behalf of the petitioner on that very day of hearing, reiterating the averments mentioned in the petition. It was submitted  that the  recommendation forwarded by R-1 for formal grant of consent for the PPA to the Commission is binding on R-2 inasmuch as R-2 is now the competent authority in place of its predecessor authority, R-1.  Further, R-2 cannot assume a stand different from that taken by R-1.

 

6.        On 06.02.2007, on behalf of the respondents, certain relevant material papers, which comprise correspondence relating to the objections/ counter reply earlier filed by them were submitted.

 

7.        On 17.02.2007, before the counsel for the respondents could advance his arguments, the counsel for the petitioner sought permission and invited the attention of the Commission to paragraph 65 of the order dated 02.06.2006 passed by the Appellate Tribunal for Electricity (hereinafter,‘ATE’) in Appeals No.1 of 2005 and batch, wherein  reference is made to judgment in Mst Rafiquennessa vs. Lal Bahadur Chetri reported in AIR 1964 SC 1511, essentially holding that vested rights cannot normally be affected by statutory provisions with retrospective effect. The counsel also invited a reference to paragraph 108, wherein the ATE pointed out that in all the contracts, obligations, etc. to be entered or incurred by the (erstwhile A.P.State Electricity) Board with third parties or APTRANSCO (R-1 herein) with third parties before the transfer schemes,  have been kept intact and they are deemed to be incurred by the transferee viz., APTRANSCO or DISCOMs and the said bodies cannot wriggle out of the same.  The said observation of the ATE strengthens the contention of the petitioner that the recommendation forwarded by R-1 is final and R-2 cannot take a different stand. The Director of the petitioner company also stated that the petitioner had been wanting to sell the power generated to third parties but was dissuaded by R-1 by threats of not entering into an agreement. The petitioner on its own could not expedite the project due to Irrigation Department stopping release of water.

 

8.        On behalf of the respondents, their counsel submitted arguments stating that there is no concluded contract between the parties herein.  Therefore, no rights will accrue to either of the parties.  As the PPA is not concluded, the agreement signed on 31.01.2005 by the parties will at the most will remain as a Memorandum of Understanding and is yet to reach the stage of a concluded contract.  From the year 2000 to 2005,  the petitioner took long time to establish its project and it cannot now blame the respondents for any delay in obtaining consent for the PPA.  In pursuance of the order dated 27.09.2005 of the Commission, respondents wrote several letters to the petitioner to come for negotiations.  But the petitioner did not choose to come forward for negotiations.  Apart from the PPA of the petitioner, 13 other PPAs were returned by the Commission.  The petitioner at no stage has been discriminated against.  Because of change of law, directions of the Commission etc., the petitioner is required to come for negotiations to finalise the PPA.  The Commission is requested to examine the entire correspondence exchanged between the parties, copies of which were filed on 06.02.2007. It is further requested that the petitioner may be directed to come for negotiations. 

 

9.        On the same day, reply to the objections raised by respondents was filed by the petitioner. On behalf of the petitioner, it is stated that by letter dated 24.10.2005, the petitioner brought to the notice of the Commission that subsequent policies cannot be applied to the PPA in retrospective manner.  It is not true to state that the petitioner is adamant, but has instead obeyed all the instructions and orders of the authorities notwithstanding the inconvenience and laws to avoid litigation.  On the other hand, respondents are not releasing amounts as agreed to by them.  R-2 is paying all mini hydel power projects as per the interim orders of ATE, except the petitioner herein.  R.1, which has not procured consent for the PPA for over a period of 4 years cannot now contend that the contract is not concluded.  It is well-settled principle in administration jurisprudence that competent authority seized of the matter should expeditiously give consent, but cannot keep it pending as it would lead to animated suspension and results in serious hardship.

 

10.      The issue that arises for consideration is :-

“whether the petitioner is entitled for the relief as prayed for”

 

11.      Before adverting to the various rival contentions, it is necessary to dwell briefly on the history of electricity laws and the turn of events that have a bearing on the present case. The A.P. Electricity Reform Act, 1998 (hereinafter, ‘the Reform Act’) came into force on 01.02.1999 and in pursuance of the said Act, the Commission was constituted on 03.04.1999. However, with effect from 10.06.2003, the Electricity Act, 2003 (hereafter, ‘the Central Act’) brought some fundamental changes in the electricity sector like Open Access in transmission, trading as a distinct activity, etc. Towards the end of 2003, the Commission initiated proceedings for determination of tariff applicable to Non-Conventional Energy (for short, ‘NCE’) projects to take effect from 01.04.2004 and on 20.03.2004 issued orders in R.P.No. 84 of 2003 in O.P.No. 1075 of 2000 fixing tariffs for various categories of NCE power projects. The Commission also issued Regulation No.2 of 2005 prescribing terms and conditions of Open Access for intra-state transmission and distribution networks and notified the same in the Gazette of Andhra Pradesh on 01.07.2005, after first notifying the draft Regulation on 04.08.2004. Similarly, the Commission sought for views of the licensees (R-1 herein, and the four distribution licensees) and the NEDCAP, the nodal agency of GoAP for promotion of NCE vide letters dated 06.11.2004 and 25.02.2005, published a discussion paper seeking comments/suggestions from public and other stakeholders through a public notice on 28.05.2005 and conducted a public hearing on 30.06.2005 and finally issued the order dated 27.09.2005 (also referred to in this Order as the RPPO Order)  in O.P.No.9 of 2005, specifying a percentage of the total consumption of the electricity for purchase from NCE sources with liberty to negotiate a competitive price within some overall ceilings. The proceedings / orders / regulations mentioned above were taken up / issued by the Commission in discharge of its functions dealing with regulation of purchase, distribution, supply and utilization of the electricity. and the said proceedings / orders / regulations are not adversarial in nature with regard to any matter in controversy between the rival parties herein.

 

12.      The Commission likes to clarify herein that a reference to its Regulation No.2 of 2005, in some of its communications cited by the rival parties herein, was made by the Commission only with a view to apprising the power project developers like the petitioner herein that they had another avenue – apart for entering into PPAs with DISCOMs – of sale of electricity to third parties etc open to them, through the Open Access route. 

 

13.      The RPPO Order of the Commission dated: 27.09.2005 requiring every distribution licensee, captive power consumer, open access consumer and scheduled consumer to purchase a certain percentage of their consumption of electricity from NCE sources was challenged before the Hon’ble Appellate Tribunal for Electricity.  The Tribunal in its order dated 02.03.2006 in Appeal Nos.173 of 2005 and others set aside the RPPO Order of the Commission dated 27.09.2005 to the extent it directed the captive power consumers also to purchase electricity to the extent of the specified percentage of 5% of their consumption from NCE sources. In the meanwhile, the Order of the Commission dated 20.03.2004 in RP No.84 of 2003 was also under challenge, first before the Hon’ble High Court of Andhra Pradesh, and transferred subsequently to the Hon’ble ATE on its constitution.  On 02.06.2006, the Hon’ble ATE in Appeals No.1 of 2005 and batch set aside the said order dated 20.03.2004 of the Commission and further directed the R-1 and the DISCOMs to continue the power purchase at the same rate at which the power generated by NCE developers supplied to them was being paid for before the passing of the said order dated 20.03.2004 with all difference and arrears thereof with some further directions. The Order is presently under appeal to the Hon’ble Supreme Court but subsists as no stay has been granted by the Apex Court. 

 

14.      The rival contentions are examined in the light of the above backdrop.   On behalf of the petitioner, it is contended that the petitioner entered into a PPA with R-1 in respect of its 2x5 MW mini hydel project at Somasila Reservior, Nellore district, on 28.10.2000, and again on 31.01.2005 in the standard format approved by the Commission duly cancelling the PPA dated 28.10.2000. It is the further  contention of the petitioner that in fulfillment of terms and conditions of R-1 and  signing the PPA first on 28.10.2000 and again on 31.01.2005 in the standard format approved by the Commission as stated above,  the petitioner has no role to play for obtaining consent of the Commission.  For the said reason, it is also the contention of the petitioner that as it fulfilled all terms and conditions of R-1 and the Commission, the Commission is deemed to have granted consent to the said PPA, without demur.  The said contentions are not correct.   It is seen from the additional material papers filed by the petitioner on 19.01.2007 that as long ago as on 04.10.2000 it was made clear in clause 12 of its agreement with NEDCAP that the petitioner is required to obtain all clearances necessary under Sections 15,16 and 21 of the Reform Act, and it is the clause (b) of sub-sections(4) and the sub-section(5) of Section 21 of this Act that make the Commission’s consent, the subject matter of the petition herein,  mandatory for an agreement like the PPA between the petitioner and the respondents herein to be valid.  The said clause 13 of petitioner’s agreement with NEDCAP and the relevant extracts from Section 21 of the Reform Act are reproduced below:

 

Clause 13 of the petitioner’s agreement dated 04.10.2000 with NEDCAP:

 

“13.  The developer is required to obtain all clearances necessary under section   15, 16 and 21 of A.P.Electricity Reform Act.”

 

 

Clause(b) of sub-section(4) and (5) of Section 21 of A.P.Electricity Reform Act, 1998

 

“Restrictions on licensees and Generating Companies.

21. (1) xxxxxxxxxxxxxx

      (2) xxxxxxxxxxxxxx

      (3) xxxxxxxxxxxxxx

 

       (4)  A holder of a supply or transmission liscence may, unless expressly, prohibited by the terms of its licence, enter into arrangements for the purchase of electricity from, -

 

(a)   xxxxxxxxxx

(b)   any person or Generating Company with the consent of the Commission.

               

(5)             Any agreement relating to any transaction of the nature described in sub-sections (1), (2), (3) or (4) unless made with or subject to such consent as aforesaid, shall be void.”

 

In accordance with Section 185 (3) of the Central Act, the above provisions of the Reform Act continue to be applicable in the State of Andhra Pradesh even after the coming into force of the Central Act, as these are not inconsistent with the provisions of the Central Act. Further, in the PPA dated 31.01.2005 too, the petitioner and Respondent No.1 agreed upon a provision (clause 9) providing that

 

“This Agreement is enforceable subject to obtaining consent of Andhra Pradesh Electricity Regulatory Commission (APERC) as per Section 21 of Andhra Pradesh Electricity Reform Act, 1998 (Act No.30 of 1998)”. 

 

Moreover, there is no provision either in the Electricity Act or in the Reform Act that once parties enter into a PPA and submit it to the Commission, consent is deemed to have been given. As such, it is not open to the petitioner to claim that (i) it has no role to play in obtaining consent of this Commission and/or (ii) the Commission is deemed to have granted its consent to the PPA dated 31.01.2005.

 

15.      It is also the contention of the petitioner that its PPA is an old one and the RPPO Order and Open Access policy orders of the Commission are therefore not applicable to it.  No doubt the petitioner entered into PPA on 31.01.2005 in the standard format approved by the Commission, but as mentioned above because of change in law and coming into force of the Central Act, after the Commission issued the RPPO Order and Open Access Regulation, it returned not only the PPA of the petitioner herein, but also all other PPAs in respect of NCE projects not yet consented to by the Commission, for re-examination in the light of the RPPO Order and also as the Commission had extended the facility of Open Access, to generators, including NCE developers. Further, in view of the transfer of PPAs under the Provisional Third Transfer Scheme from R-1 to DISCOMs like R-2, the Commission also in its letter dated: 22.10.2005, while returning inter-alia, the PPA of the petitioner, informed R-1 that it is the DISCOM concerned (R-2 in this case) that can enter into a PPA and not R-1.  It is relevant that even though the petitioner entered into the PPA on 31.01.2005, the project of the petitioner was not yet completed.  On 29.07.2005 the petitioner addressed a letter to NEDCAP requesting for extension of time for completion of its project up to 15.01.2006, which was acceded to by NEDCAP vide its letter dated 18.08.2005. Thereafter, the petitioner informed the Commission vide its letter dated 17.10.2005 i.e. after the issue of the Commission’s PPO Order dated 27.09.2005 that NEDCAP had extended the time for completion of the project and that the project was ready to go on for production and evacuation of power to the respective DISCOM on commercial lines and requested the Commission to grant consent to the PPA dated 31.01.2005. Simply because of the fact that the PPA of the petitioner was submitted prior to coming into effect of the RPPO Order, the claim that the said order of the Commission is not applicable to the PPA of the petitioner has no validity as due to the Provisional Third Transfer Scheme having come into force in the intervening period (w.e.f. 09.06.2005) the PPA with R-1 had thereby required to be entered into with R-2, and also as the petitioner’s very project to which the PPA related had not come into production. 

 

16.      Similarly, it is also the contention of the petitioner that R-1 had recommended to the Commission in the month of October, 2005 for issuing consent and the said recommendation is binding on R-2, as the latter being the successor-entity of the former is estopped from examining the PPA in the light of the two orders of the Commission. There is no denying the fact that R-2 is successor-in-interest of R-1 and is bound by the decisions of its predecessor-in-interest. That would, however, be true only in cases where the latter (R-1) had indeed acquired an interest or right whereas in the absence of the Commission’s consent, no rights or liabilities had accrued to either of the parties, including R-1, which could therefore be passed on by R-1 to R-2. In fact, on 22.10.2005, the Commission in the process of grant of consent, returned the PPA of the petitioner along with a number of other PPAs not consented to till the issue of the RPPO Order as mentioned above and directed the DISCOMs concerned to re-examine the PPAs in the light of the RPPO Order and the Commission’s Regulation No.2 of 2005 on terms and conditions of Open Access.  Hence, the above contention of the petitioner that R-2 is estopped from examining the PPA in the light of the aforementioned Order / Regulation of the Commission, has no legs to stand for the reasons that (i) as mentioned above, R-1 inherited no binding obligations from R-1 in regard to the PPA, and (ii) it was the Commission that directed DISCOMs to re-examine the PPAs as mentioned above. Accordingly therefore, the question of applicability or otherwise of the doctrine of estoppel on R-2 does not arise.  That apart, the recommendation of R-1 stated to have been forwarded in the month of October, 2005, is not of significance as by that time, the Provisional Third Transfer Scheme had already come into force, and strictly speaking, any recommendation after the notification of the Third Transfer Scheme should have emanated only from R-2, and not R-1. Therefore, the question of recommendation of R-1 being binding on R-2 too does not arise and is not an issue at all. It is in compliance of the specific Orders and the consequent directions of the Commission, that the R-2 initiated negotiations with the petitioner.

 

17.      In view of the discussion in the preceding para that in the absence of the consent to the PPA by this Commission no transferable right vested with R-1 and was therefore also no inherited by R-2, paras 65 and 108 of the Order dated:2.6.2006 of the Hon’ble ATE, as referred to in para 7 above, are not relevant to the issue at hand.

 

18.      It may be mentioned here that the grant – or for that matter the refusal to grant – consent to a PPA is not a mechanical process.  Before granting consent to a PPA, the Commission being regulator of the sector is required to take several aspects into consideration, including the interests of end-consumers who though not direct parties to such agreements, get affected by them, the changes of law other changes like notification of the Provisional Third Transfer Scheme, likelihood or otherwise of the completion in time of the power projects in question, issue and coming into force of statutory regulations, the phraseology and the contents of the PPA, the pending court proceedings / appeals relating to tariffs determined earlier by this Commission and other Commissions, etc., all have a bearing on the completion of the process for the grant (or refusal) of the consent.

 

19.      As the process of grant of consent is not yet completed, the question of grant of deemed consent to the PPA dated 31.1.2005 also does not arise. As seen from the above discussion, the process of grant of consent for PPAs is an elaborate exercise and while doing so, several factors have to be taken into consideration.  It is also a fact that after coming into force of RPPO and Open Access Regulation allowing an extra option to the petitioner to sell power to third parties in addition to DISCOMs, traders and other consumers within and outside the State, through the Open Access route, the Commission returned a number of other PPAs also to the DISCOMs concerned as per the record available with the Commission. .

             

20.      The PPAs of M/s.Vijayawada Municipal Corporation (0.14 MW municipal waste-based (power generation plant), M/s.KCP Sugars Limited (5 MW bagasse-based plant) M/s.SLT Power & Infrastructure Projects (P) Limited (3 MW industrial waste-based plant) and M/s Nava Bharat Ferro Alloys (9 MW bagasse-based plant) were resubmitted after examination and negotiation of prices in the light of RPPO Order by the DISCOMs concerned. The Commission after careful consideration, granted consent to all these four PPAs. That apart,  new PPAs of several other NCE developers viz., M/s Dr.Prasada Reddy,. M/s Maxivision Laser(P) Ltd., M/s Vimal Roller Flour Mills, M/s V.V.Agro foods, M/s Hyderabad Chemicals Ltd., M/s Hyderabad Chemical Products Ltd., M/s GSR Sugars(P) Ltd., and M/s Velagapudi Power Generation Ltd. stand forwarded to the Commission with negotiated tariffs  under the RPPO Order.

 

21.      The Commission cannot but look back and recall that when the irrigation authorities started releasing water, the petitioner, pending finalization of the tariff, requested R-2 to draw power from its project, ‘pending finalisation of the rate’ and ‘on commercial lines’. As it was a fact that water was being let out downstream of Somasila Dam and could be gainfully utilized for power generation also, R-2 after taking permission from the Commission agreed to draw power from the mini hydel power project of the petitioner pending finalisation of the unit rate for electricity generated and submission of the PPA for consent. The petitioner had dwelled on financial constraints being faced by it and the necessity to generate income from the project so as to fulfil its obligation to repay loans, etc. The Commission in its No.E: 523DD-PPP/2006 dated 08.09.2006 also instructed the R-2 to pay for the power drawn at a reasonable rate on “adhoc” basis. 

 

22.         The basic issue in this case is that the Commission returned the PPA entered between the petitioner and R-1 (APTRANSCO) with certain observations as indicated in its No.E:523/DD(PPP)/2005 dated 22.10.2005.   The PPA was not re-submitted to the Commission.  The reason for this appears to be that the parties have not come to an agreement regarding the terms and conditions to be incorporated in the PPA. There is no provision in the Electricity Act, 2003,  enabling grant of “deemed consent” as prayed for by the petitioner.  The prayer of the petitioner for grant of consent to the PPA already entered into cannot, therefore be considered, or the petition allowed.

 

23.      However, the Commission taking note of the fact that the petitioner is a NCE generator, that to a mini hydel, and in order to utilize the water being let out into the canals by the Irrigation Department authorities, permitted R-2 to purchase power from the petitioner in its letter dated 30.12.2005.  Subsequently, on the representations of the petitioner, R-2 was also instructed to pay for the power drawn at a reasonable rate on “adhoc” basis.  Despite the issue of these instructions there appears to be uncertainty regarding the tariff at which the power drawn by R-2 from the petitioner, should be paid for.  This has caused some hardship to the petitioner.  In order to ensure that the petitioner is paid for the power supplied to R.2 at a reasonable rate, the Commission feels that the R-2 may be guided by the findings in the Order of the Appellate Tribunal for Electricity in Appeals No.1 of 2005 and batch dated 02.06.2006, until final disposal of the matter by Hon’ble Supreme Court of India in Civil Appeal Nos.2926/2006, 3884/2006 and batch. The petition is disposed of accordingly.

 

The order is corrected and signed on this 7th day of March, 2007.

 

     Sd/-

Sd/-

Sd/-

(R.RADHA KISHEN)

(SURINDER PAL)

(K.SWAMINATHAN)

MEMBER

MEMBER

CHAIRMAN

 

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