Appeal No. 59 of 2015 & IA No. 274 of 2016. Case: IL & FS Tamil Nadu Power Company Ltd. Vs Central Electricity Regulatory Commission and Ors.. APTEL (Appellate Tribunal for Electricity)
| Case Number | Appeal No. 59 of 2015 & IA No. 274 of 2016 |
| Counsel | For Appellant: Mr. Sanjay Sen, Sr. Advocate Mr. Matrugupta Mishra Ms. Shikha Ohri Mr. Nimesh Jha Mr. Saahil Kaul Mr. Hemant Singh Ms. Ruth Elwin Mr. Tabrez Malawat Mr. Tushar Nagar Counsel and For Respondents: Mr. Nikhil Nayyar Mr. Dhananjay Baijal Mr. Divyanshu Rai Mr. Sai Vinod for R-1 Ms. Suparna Srivastava Ms. Anushka Arora for R-2 Mr. S. ... |
| Judges | Mrs. Ranjana P. Desai, Chairperson and Mr. I.J. Kapoor, Technical Member |
| Issue | Electricity Act, 2003 - Sections 2(36)(iii), 10, 15(4) |
| Judgement Date | April 18, 2017 |
| Court | APTEL (Appellate Tribunal for Electricity) |
Judgment:
Mr. I.J. Kapoor, Technical Member
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The present Appeal is being filed by M/s IL&FS Tamil Nadu Power Company Ltd. (herein after referred to as the "Appellant") under Section 111 of the Electricity Act, 2003 challenging the Order dated 03.12.2014 ("Impugned Order") passed by the Central Electricity Regulatory Commission (hereinafter referred to as the "Central Commission"),in Petition No. 81/TL/2014. The present Appeal is concerning about the denial of Transmission License to the Appellant for its 48 km dedicated transmission line from its Cuddalore thermal power project to Nagapattinam pooling station of Respondent No. 2.
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The Appellant, M/s IL&FS Tamil Nadu Power Company Ltd. is a company incorporated under Companies Act, 1956, is implementing 2x600 MW thermal power project in Cuddalore district of Tamil Nadu.
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The Respondent No.1, Central Electricity Regulatory Commission, is the Central Commission exercising jurisdiction and discharging functions in terms of the Electricity Act, 2003.
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The Respondent No. 2, Power Grid Corporation of India Ltd. is the Govt. Company within the meaning of Companies Act, 1956 and also functions as the Central Transmission Utility (CTU) under Section 38 to the Electricity Act, 2003.
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The Respondent No. 3, Tamil Nadu Electricity Board is a distribution licensee in the State of Tamil Nadu which has contracted 540 MW power from the Appellant under Case-1 bidding process.
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The Respondents Nos. 4 to 7 are the other Southern Region constituents.
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The Respondent No. 8 is the Southern Region Power Committee.
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Facts of the present Appeal:
a) The Appellant is implementing 2x600 MW Thermal Power Project in Cuddalore district of Tamil Nadu State. The Appellant is also implementing 48 km long 400 kV D/C quad moose dedicated transmission line from its project at Cuddalore to Nagapattinam765/400 kV pooling station of Respondent No.2 including bays at Nagapattinam pooling station for termination of the line(hereinafter referred as the "Subject Line").
b) The Appellant on 3.11.2008, filed an application with the Respondent No. 2 for grant of open access under CERC (Open Access in Inter State Transmission), Regulations, 2004 (hereinafter referred as ''Regulations, 2004'').
c) On 16.11.2010, in the 11th meeting of Southern Region Constituents regarding Long Term Access ("LTA") and Connectivity applications in Southern Region, it was decided that LTA of 1150 MW be granted to the Appellant along with the transmission system for Connectivity based on the application made under Regulations, 2004. The transmission system envisaged for connectivity was initially in the scope of the Respondent No. 2. In this meeting the Respondent No. 2 informed applicants about timelines for construction of connectivity lines as 9 months plus CERC time line as specified in CERC Tariff Regulations. The Respondent No. 2 also informed that if applicant desires to have connectivity before these timelines then they can construct the connectivity lines by themselves.
d) The Respondent No. 2, vide letter dated 10.12.2010 granted Long Term Open Access (LTOA) to the Appellant for 1150 MW and also signed Bulk Power Transmission Agreement (BPTA) on 24.12.2010 for sharing of transmission charges. The Appellant on 15.4.2011 furnished bank guarantee in favour of the Respondent No. 2 as per the provisions of CERC (Grant of Connectivity, Long Term Open and Medium Term Open Access in Inter State Transmission and related matters) Regulations, 2009 (hereinafter referred as ''Regulations, 2009'').
e) The Respondent No.2 filed petition no. 116 of 2011 before the Central Commission seeking direction regarding implementation of connectivity transmission systems by the generators due to paucity of time available with it. The Central Commission vide order dated 19.12.2011 held that due to paucity of time available with CTU, the applicants may require to implement dedicated transmission lines included in co-ordinated transmission planning as per main provision of Regulation 8(8) of Regulations, 2009. The Central Commission in this order has also clarified that the dedicated transmission lines developed by the generators will form part of basic network if they are granted license as per the Transmission License Regulations. The Appellant was not a party to this petition.
f) The Appellant has entered into PPA dated 12.12.2013 with Respondent No. 3 for supply of 540 MW after being selected under long term Case-I bidding process. Unit-I of the Appellant is declared under Commercial operation from 29.9.2015 and Unit-2 was to be declared under commercial operation from 30.4.2016. The Appellant has entered into Power Sales Agreement for the month of May, 2016 with various traders for sale of power to A.P., Tamil Nadu and Karnataka discoms. The Appellant is also selling power through Power Exchange.
g) The Appellant relying on Regulation 8(8) of the Regulations, 2009 and Central Commission''s order dated 19.12.2011 in petition no. 116 of 2011, filed petition no. 81/TL/2014 with the Central Commission for grant of transmission license under Regulation 6 (c) of CERC (Procedure, Terms and Conditions of Transmission License and other related matters) Regulations, 2009 (hereinafter referred as "Transmission License Regulations") for the subject Line.
h) The Central Commission vide Impugned Order dated 3.12.2014 in petition no. 81/TL/2014 rejected the prayer of the Appellant for grant of transmission license for the subject Line.
i) Aggrieved by the Impugned Order passed by the Central Commission, the Appellant has preferred the present appeal.
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QUESTIONS OF LAW
The Appellant has raised the following questions of law in the present appeal:
a. Whether the Impugned Order renders Regulation 8(8) of the Central Electricity Regulatory Commission (Grant of Connectivity, Long Term Access and Medium Term Open Access in Inter-State Transmission and related matters) Regulations, 2009 a nullity?
b. Whether the Hon''ble Commission while passing the Impugned Order erroneously ignored the fact that the Appellant intended to use the dedicated transmission line from its generating station to the Nagapattinam pooling station of PGCIL for sale of power to inter-State beneficiaries?
c. Whether the Hon''ble Commission erred in ignoring the fact that the Appellant intends to use the dedicated transmission line as main transmission line?
d. Whether the Hon''ble Commission has passed the Impugned Order in contravention of the provisions of Regulation 6(c) of CERC (Procedure, Terms and Conditions for grant of Transmission License and other related matters) Regulations, 2009?
e. Whether the Hon''ble Commission erred in ignoring the term "intends" appearing in Regulation 6 (c) of CERC (Procedure, Terms and Conditions for grant of Transmission License and other related matters) Regulations, 2009?
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We have heard at length the learned counsel for the parties and considered carefully their written submissions, arguments put forth during the hearings etc. Gist of the same is discussed hereunder.
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The learned senior counsel for the Appellant has made following arguments/submissions for our consideration on the issues raised by it:
a) The finding of the Central Commission based on 11th meeting of the Southern Region constituents that project developers may construct the connectivity lines by themselves, if they prefer to have connectivity before the timelines specified by the Respondent No. 2 is incorrect and is contrary to Regulation 8 (8) of Regulations, 2009 which provides that for thermal generation projects of 500 MW capacity and above, the developer shall not be required to construct the dedicated line to the point of interconnection and that such line shall be taken into account for coordinated transmission planning by CTU and CEA and would be executed by CTU. The Appellant executed the subject line due to inability of the Respondent No. 2 to construct the same in given time frame. In the present case the Appellant had executed the subject line on behalf of the Respondent No.2.
b) The Central Commission has made distinction of the subject line on the basis of its ownership i.e. the line is to be treated as ISTS if it is constructed by Respondent No. 2 (CTU) as per Section 2 (36) (iii) of the Electricity Act, 2003 and if it is not owned, operated, maintained or controlled by CTU, it remains a dedicated transmission line. This is not in line with the Regulation 8(8) of the Regulations, 2009 which perceives the dedicated line as a part of ISTS for generating plants of capacities 500 MW and above and accordingly kept in the scope of Respondent No. 2 (CTU). The subject line was evolved on the basis of coordinated planning of CEA and CTU and is therefore deemed to be a part of ISTS.
c) The Central Commission also relied on Section 10 of the Electricity Act, 2003 which deals with the construction of the dedicated transmission line from bus bar of the generating station till the pooling station of the Respondent No.2. CTU is required to build dedicated line in certain cases only. The Central Commission has further held that the provision under Regulations, 2009 carves out an exception to the main regulation and cannot control the provision of main regulation. Combined reading of Section 10 of the Electricity Act, 2003 and Regulation 8(8) of Regulations, 2009 reveals that the subject line was to be constructed by the Respondent No. 2.
d) The Central Commission has observed that the subject line is used only for the purpose of evacuation of power from generating station of the Appellant and accordingly does not meet the twin criteria to be ISTS line i.e. use of transmission line as main transmission line and use of line as ISTS under Regulation 6 (c) of the Transmission License Regulations. The Central Commission has erred in interpreting the phrase "main transmission line" as a transmission line shared by two or more ISTS customer. The Electricity Act...
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