Petition No. 301/2009. Case: Bhaskhar Shrachi Alloys Ltd. Vs Damodar Valley Corporation and The Chairman, Damodar Valley Corporation. Central Electricity Regulatory Commission

Case NumberPetition No. 301/2009
CounselFor Appellant: Shri Amit Kapur, Advocate, Shri Sachin Das, Advocate and Shri Apoorva Misra, BSAL and For Respondents: Shri J.R. Das, Advocate, Shri S. Mishra, Advocate, Shri P.K. Choudhury and Shri Pulak Bhattacharya, DVC
JudgesPramod Deo, Chairperson, S. Jayaraman and V.S. Verma, Members
IssueDamodar Valley Corporation Act, 1948 - Section 20; Electricity Act, 2003 - Sections 14, 79(1)(a)
Judgement DateMay 02, 2013
CourtCentral Electricity Regulatory Commission


1. The petitioner, Bhaskar Sarachi Alloys Limited, an HT consumer of Damodar Valley Corporation has filed the petition with the following prayers:-

(a) DVC be directed to forthwith implement the approved FCS (Fuel Cost Surcharge) formula passed by this Commission for calculation of Fuel Cost Surcharge from the consumers;

(b) DVC be directed to render accounts in respect of Fuel Cost surcharge levied and/or recovered till date since 1.4.2006 over and above the FCS leviable according to the approved FCS formula passed by this Commission and if necessary this Commission may appoint an auditor to check the veracity of the accounts to be submitted by DVC;

(c) DVC be directed to adjust the FCS with interest for period of recovery and retention by it forthwith or against the future tariff to be collected from the consumers;

(d) pass ad interim orders in favour of the petitioner and against DVC in terms of the prayers above.

Damodar Valley Corporation was established under the Damodar Valley Corporation Act, 1948 (1948 Act) to perform multifarious functions including the function of generation, transmission and sale/supply of electricity within its statutory 'Command Area'. Section 20 of the 1948 Act authorised DVC to fix the schedule of charges for the supply of electrical energy, including the rates for bulk supply and retail distribution, and the manner of recovery of such charges. Accordingly DVC had been fixing and recovering the charges for electrical energy. DVC last carried out the exercise of fixation schedule of charges in the year 2000 which included the Fuel Price Adjustment Formula for adjusting the prices, GCV etc of fuels used for generation of electricity.

2. The Electricity Act, 2003 (2003 Act) came into force from 10.6.2003. In accordance with the fourth proviso to section 14 read with section 79(1)(a) of the 2003 Act, the fixation of tariff of DVC being a generating station owned and controlled by the Central Government came to be vested in this Commission. The tariff of the generating stations and transmission systems of DVC was determined by this Commission vide order dated 3.10.2006 in Petition No 66/2005 for the period from 1.4.2006 till 31.3.2009, after allowing a transition period of two years from 1.4.2004. In the tariff order, the basic energy charge was calculated taking into account the value of GCV, base price of fuel and normative operating parameters specified by this Commission. It was also directed that the basic energy charge would be subject to Fuel Price Adjustment in accordance with the following formula, applicable to the coal based stations of DVC:-

FPA = A + B


FPA-Fuel price Adjustment for a month in Paise/kWh Sent out

A-Fuel price adjustment for Secondary Fuel oil in Paise/kWh sent out

B-Fuel price adjustment for Coal in Paise/kWh sent out

SFCn-Normative Specific Fuel Oil consumption in l/kWh

SHRn-Normative Gross Station Heat Rate in kCal/kWh

ACn-Normative Auxiliary Consumption in percentage

Pom-Weighted Average price of fuel oil on as consumed basis...

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