Petition No. 132/MP/2012. Case: BBM Ispat Ltd Vs State Load Despatch Centre, Karnataka and Ors.. Central Electricity Regulatory Commission

Case NumberPetition No. 132/MP/2012
JudgesDr. Pramod Deo, Chairperson, Shri S. Jayaraman, Member, Shri M. Deena Dayalan, Member and Shri AS Bakshi, Member (EO)
IssueElectricity Act, 2003 - Sections 11, 11(1), 180, 2, 37, 42, 42(2)
Judgement DateNovember 19, 2012
CourtCentral Electricity Regulatory Commission


(New Delhi)

1. The petitioner, BBM Ispat Ltd has filed the present petition with the prayers as follows:

(a) To Set aside the letter bearing No. CEE/SLDC/EE/AEE3/37 dated 9th April, 2012 issued by the 1st Respondent, refusing to grant No Objection Certificate for Inter State Open Access to the Petitioner, by declaring the same as arbitrary, illegal, without jurisdiction, ultra virus to the provisions of the Electricity Act, 2003, CERC (Open Access in inter-State Transmission) Regulations, 2008 at ANNEXURE - P1;

(b) Direct the 1st Respondent to issue No Objection Certificate for Inter State Open Access to the Petitioner, to the extent of 45 MW power, for the period from 5th April, 2012 to 4th May, 2012, in a time bound manner, in term of Application dated 5th April, 2012 ANNEXURE - P2;

(c) Direct the Respondents No. 1 to 9, either jointly or severally, to pay damages to the Petitioner, which is being the difference between Rs. 5.30 per unit, fixed in the GO and the notional price quoted in the trading platform of the Indian Energy Exchange Limited, during the time at which the electricity was injected in the transmission system of the 4th Respondent, from 1st February, 2012, till the open access is allowed to the Petitioner by the 1st Respondent as per the Electricity Act, 2003 and the Regulations framed by this Hon'ble Commission;

(d) Award cost of this Petition;

(e) To pass such other and further orders, as the Hon'ble Commission deems fit to pass under the facts and circumstances of the case.


The petitioner, a generating company within the meaning of the term defined under sub-section (28) of Section 2 of the Electricity Act (the Act), owns and operates two co-generation power plants with a total exportable capacity of 25 MW within the area of supply of Gulbarga Electricity Supply Company Ltd., the ninth respondent, in the State of Karnataka. The generating stations are connected to the State Grid, operated and maintained by Karnataka Power Transmission Corporation Ltd (KPTCL), the fourth respondent, through a 220 kV transmission line.

2. The petitioner entered into an agreement 3.9.2011 with Bangalore Electricity Supply Company Ltd (the fifth respondent) for supply of a part of power generated and the balance of electricity generated is sold outside the State by availing inter-state open access under the Central Electricity Regulatory Commission (Open Access in inter-State Transmission) Regulations, 2009 (the Open Access Regulations). The petitioner has mentioned that it made an application dated 25.1.2012 for NOC for grant of short-term inter-State open access under the provisions of the Open Access Regulations, though copy of the application has not been filed.

3. The State Government of Karnataka (State Government) (the second respondent) issued an order bearing No EN 2 PPC 2012 dated 27.1.2012 ("the impugned GO") under Section 11 of the Act, directing the generators in the State to supply their entire exportable power to the State Grid for utilization in the State from 1.2.2012 to 31.5.2012. The impugned GO which was published in the Karnataka Gazette on 15.3.2012 is extracted below:

In the circumstances explained in the Preamble and in exercise of the powers conferred under section- 11 of Electricity Act 2003, the State Government hereby issues the following directions in the public interest with effect from 1st February 2012 and will be in force till 31st May 2012 or until further orders whichever is earlier:

a) All the Generators in the State of Karnataka shall operate and maintain their generating stations to their maximum exportable capacity and shall supply all exportable electricity generated to the State Grid for utilization within the State subject to following conditions:

i) The tentative tariff for supply of energy by the Generators under section 11 and who do not have Power Purchase Agreement with the Electricity Supply Companies shall be Rs. 5.30/unit subject to determination of final tariff by Hon'ble KERC.

ii) Joint meter readings taken by ESCOMs on 31.01.2012 midnight shall be the basis for raising the monthly bills.

iii) LC will be provided by the ESCOMs to the extent of cost of power allocated.

iv) Rebate of 2% shall be allowed on the bill amount if payment is made within 5 days from the date of presentation of bill or other wise 1% shall be allowed if the payments are made within 30 days.

v) Due date for making payment shall be 30 days from the date of presentation of the bill.

vi) Surcharge at 1.25% per month shall be payable if the payments are made beyond due date.

vii) The Jurisdictional Distribution Licensee shall raise the bill for the energy imported by the Generators under section 11.

viii) Energy pumped by Generators under section 11 shall be allocated amongst ESCOMs as per Govt. Order dated 12-10-2011 in line with CGS allocation and is as follows:

ix) The Generators shall raise the bills in the above portion to respective ESCOMs.

b) The above tariff is provisional and is subject to approval of Karnataka Electricity Regulatory Commission (KERC).

c) The above proposal shall not be applicable for the Intra-State Generators who are having valid PPA's with the Distribution Licensees in the State of Karnataka.

d) All State Electricity Supply Companies (ESCOMs) shall submit a Memorandum on the power situation within 15 days from date of this order before the Karnataka Electricity Regulatory Commission (KERC) and request to fix the tariff for supply of energy by the Generators source-wise (i.e. Cogeneration, Biomass, Captive, IPP, etc) under section 11 of Electricity Act 2003.

4. The preamble of the impugned GO discloses the reasons for invoking Section 11 of the Act, some of the clauses of which are as follows:

1. The State is facing power shortage during 2011-12. There is deficit between demand and supply in the State. Owing to steep increase over the years in demand for power supply, the daily consumption of energy has also increased.

12. In view of the Non availability of corridor from ER/WR to SR, power flow to Karnataka from outside sources up to end of May, 2012 is meager.

13. The availability of power through Energy Exchanges is also constrained by corridor congestion, rates are fluctuating and there is no guarantee that the required power can be obtained through Energy Exchange. Hence, the State cannot depend on any additional power from outside sources for the period between February 2012 to May 2012.

14. There is remote possibility of getting any additional quantum of power from outside generators either through bidding process or bilateral transactions due to corridor congestion.

15. In the circumstance, the endeavor of the State is that every possible source of power should be tapped in the coming months. To mitigate the likely power shortages and to maintain regularity and minimize inconvenience to the public is a matter of paramount concern in the coming months.

16. The State Government is of the considered opinion that the prevailing power situation in the State warrants measures to protect the public interest. The State is also aware that the genuine economic interests of the generators are to be borne in mind in view of costs of inputs for power generation.

17. In view of the non-availability of the corridor for inter-state transmission of power, the only option left is to tap the power from Intra-State Generators of around 660 MW.

18. Following are the details of available generation capacity of Private Entrepreneurs in the State of Karnataka:

19. At meeting chaired by the Hon'ble Chief Minister, Govt. of Karnataka on 31.12.2011, it was decided to procure the power from Generators within the State and fix the tentative tariff of Rs. 5.30 per unit obtained against previous tender notification dated 29.10.2011 subject to determination of final tariff by Hon'ble KERC for Generators pumping energy against order issued under Section 11.

5. Consequent to issue of the impugned GO, SLDC by its letter dated 28.1.2012 forwarded to the petitioner a copy of the impugned GO stating further that the application to sell power under open access for the period 26.1.2012 to 25.2.2012 was not considered. Thereafter petitioner made an application dated 5.4.2012 under Regulation 8 of the Open Access Regulations for the Standing Clearance/NOC for export of power generated by the petitioner for sale outside the State during 5.4.2012 to 4.5.2012. These application was rejected by SLDC vide its letter dated 9.4.2012. Thus, the petitioner supplied power to the State Grid. The petitioner has averred that it suffered losses to the extent of `34,00,92,000 as a consequence of refusal of Standing Clearance/NOC. The petitioner has made the present application seeking relief as extracted above.


6. The petitioner has raised a number of grounds in support of the relief claimed, as summarized below:

(a) The State Government is not authorized under Section 11 of the Act to issue the impugned GO to mandate supplies to the distribution companies.

(b) The GO came into...

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