Petition No. 43/MP/2012. Case: Himachal Sorang Power Ltd. Vs Powergrid Corporation of India Ltd.. Central Electricity Regulatory Commission

Case NumberPetition No. 43/MP/2012
CounselFor Appellant: Shri Sitesh Mukherjee, Advocate, Shri Sakya Singha Chaudhuri, Advocate, Shri S.C. Mahajan, Shri Prabhat Gujral and Ms. Anusha Nagarajan and For Respondents: Shri Avinash M. Pangi and Ms. Rashmi Pant Joshi
JudgesPramod Deo, Chairperson, S. Jayaraman, V.S. Verma, M. Deena Dayalan, Members and A.S. Bakshi, Member (EO)
IssueElectricity Act, 2003 - Sections 29(4), 79
Judgement DateJanuary 31, 2013
CourtCentral Electricity Regulatory Commission


  1. In this petition, filed under clause (f) of sub-section (1) of Section 79 of the Electricity Act, 2003, the petitioner has made the following prayers, namely:

    (i) Declare that the Petitioner is entitled in the facts and circumstances of the case, to an extension of the date for commencement of open access under the BPTA;

    (ii) Pass appropriate directions extending the date of commencement of long term open access from May, 2011 to September, 2012 under the BPTA;

    (iii) Restrain the Respondent from making any claims under the BPTA for transmission charges or in respect of extension of the date of commencement of open access under the BPTA prior to September, 2012

    (iv) Direct the Respondent to withdraw the invoices dated 08.09.2011 and 03.01.2012;

    (v) In the interim, grant a stay on the Respondent from raising any invoices on the Petitioner for transmission charges or otherwise till September, 2012 or to take any steps or coercive action to recover the transmission charges raised in its invoices dated 08.09.2011 and 03.01.2012; and

    (vi) Pass such other orders that this Hon'ble Commission deems fit in the interest of justice.

    Submission of the Petitioner

    The petitioner, Himachal Sorang Power Private Limited signed a Memorandum of Understanding dated 23.9.2004 with the State Government of Himachal Pradesh for the implementation of a run-of-the-river hydro electric power project with a generation capacity of 100 MW (2X50 MW) on the Sorang Nallah tributary of Satluj river, in the Kinnaur District of Himachal Pradesh ("Project"). Subsequently, the Government of Himachal Pradesh and the petitioner entered into an Implementation Agreement dated 20.1.2006 ("Implementation Agreement") setting out the terms and conditions governing implementation of the Project. North Delhi Power Limited, Delhi is the sole identified beneficiary who is to be supplied 85 MW of power. The remaining 15 MW is proposed to be sold by the petitioner as merchant power. The power is to be evacuated through a LILO circuit constructed by the petitioner at Sorang in one circuit of 400 kV D/C Karcham Wangtoo - Abdullapur transmission line, which joins with the transmission network of the respondent, Power Grid Corporation of India Ltd. (PGCIL) at Abdullapur sub-station.

  2. The petitioner was granted long-term open access by PGCIL for 25 years and for this purpose, a Bulk Power Transmission Agreement ("BPTA") was executed on 21.10.2009. As per the BPTA, the date of commencement of open access was May 2011, the expected date of commercial operation of the Project or the actual date of commercial operation of the first unit of the Project, whichever was earlier. The relevant part of the BPTA is extracted below:

    HSPPL shall bear the applicable transmission charges of NR corresponding to 100 MW from Sorang Hydro Electric Project from May 2011 or actual date of commercial operation of 1st unit, wherever is earlier, onwards. ----

  3. The petitioner has submitted that the Implementation Agreement with the State Government prescribed the milestones for the implementation of the project and the petitioner has throughout been prudent in achieving the construction and financial milestones and in getting the required approval in time as per the details given in the table below:

  4. The petitioner has submitted that the Detailed Project Report (DPR) of the project prepared by the consultants M/s. Design Group contemplated a construction period of 54 months with the scheduled date of commissioning as June, 2011 and accordingly, LTA was scheduled from May 2011. The petitioner has submitted that the petitioner has taken all necessary measures to implement the project in accordance with the schedule. However since the commencement of the execution of the project, the petitioner has been encountering geological surprises continuously coupled with adverse conditions in the form of torrential monsoons that affected the implementation of project. The petitioner has submitted that the excavation and construction activities were severely hampered by geological surprises and torrential rains in relation to penstock, cable tunnel, fire-fighting tank and head race tunnel. These factors have caused the petitioner to carry out substantial changes to the methodology and design for the implementation of the project which has resulted in considerable delay in completion of the project. The petitioner has explained the delay on completion of diverse activities as discussed hereunder.

    (a) Penstock: The petitioner has stated that works in respect of the penstock were scheduled to be commenced in February 2009 and completed by February 2010. The petitioner has stated that the works were, however, rescheduled to be completed by July 2012, with a delay of 18 months because of the factors over which it did not have any control. The petitioner has explained that while carrying out surface excavation to lay penstock line it encountered excessive overburdening of soil cover at various places up to a depth of 7m - 8m, though DPR had considered a very thin overburden. The petitioner has argued that overburdening of soil cover slowed down the progress of construction. Besides, the petitioner has stated, the region faced unprecedented torrential rains and heavy snowfall during 2009 and 2010, which caused damage to the works already executed at site and protracted further progress. The delay of about two months during November 2010 to January 2011 has been attributed to the interim stay ordered by the civil court on 3.11.2010 restraining the petitioner from constructing the road leading to the Project site, which order was subsequently vacated by the District Judge, Kinnaur by his judgment dated 10.1.2011 on appeal filed by the petitioner. The petitioner has submitted that on account of the problems faced by it during the excavation process for construction of penstock, it was compelled to change the construction design and methodology at certain places leading to further time over-run.

    (b) Cable Tunnel: The petitioner has stated that while carrying out the excavation work for construction of the inclined RCC tunnel for laying of cables from the powerhouse to the gas-insulated switchyard, as planned, it encountered very loose/unstable strata though initially based on the DPR it expected good rock in the tunnel and suitable strata for RCC trench. In view of the difficulties confronted, the petitioner has claimed that it changed the alignment of the balance inclined tunnel by diverting it to horizontal tunnel and vertical shaft and installing steel trestle in place of RCC trench. The petitioner has stated that the changed design increased the scope of work which was recommenced on 27.4.2011 with a delay 13 months. The petitioner has stated that construction of cable tunnel originally scheduled to be completed by March 2010 was expected to be completed by February 2012, with a delay of 23 months.

    (c) Fire-fighting Tank: The petitioner has stated that construction of the fire-fighting tank also delayed the Project. The petitioner has explained that it started construction of the fire-fighting tank in November 2010 as an over-ground tank based on design parameters in the DPR and the understanding that the rocks in the area were hard to withstand the burden of the fire-fighting tank. However, it has been stated, after a substantial portion of the fire-fighting tank was constructed, in June 2011 the unexpected movement of rocks caused the tank to be buried which led to relocation of the fire-fighting tank and thereby resulting in the delay. The petitioner has stated that under the revised construction schedule the fire-fighting tank was expected to be completed by February 2012.

    (d) Head Race Tunnel: The petitioner has stated that the work on construction of the Head Race Tunnel was scheduled to commence in February 2009 and was to be...

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