Petition No. 130/2010. Case: In Re: East-North Interconnection Company Limited Vs. Central Electricity Regulatory Commission
| Case Number | Petition No. 130/2010 |
| Judges | Pramod Deo, Chairperson and V.S. Verma, Member |
| Issue | Electricity Law |
| Judgement Date | October 28, 2010 |
| Court | Central Electricity Regulatory Commission |
Order:
(New Delhi)
1. The Applicant, East-North Interconnection Company Limited (ENCIL) has filed the present application under Section 63 of the Electricity Act, 2003 (the Act) for adoption of tariff in respect of the following elements:
(a) Bongaigaon-Siliguri 400 kV transmission line-217.417 kms
(b) Purnea-Biharsharif 400kV transmission line-209.893 kms
2. The applicant has submitted that the Central Government in exercise of powers under Section 63 of the Act has notified the "Tariff Based Competitive Bidding Guidelines for Transmission Service" (hereinafter "the Guidelines") vide Government of India Ministry of Power Resolution No. 11/5/2005-PG(i) dated 17.4.2006. The applicant has further submitted that East North interconnection company Limited (ENICL) in its capacity as BPC (prior to its acquisition by the successful bidder) initiated the bid process on 20.10.2008 and completed the process on 12.10.2009 in accordance with the Guidelines. M/s Sterlite Technology Limited (STL) has been selected as the successful bidder having quoted the lowest levelised transmission charge. Accordingly, a Letter of Intent (LOI) was issued by the BPC on 7.1.2010 to STL, the successful bidder. STL has accomplished all the milestones required in the terms of Request for Proposal (RFP) and the Letter of Intent including acquisition of ENICL. After acquisition, ENICL has approached the Commission for adoption of tariff. The applicant has made the following prayers:
(a) Allow the Application and adopt the transmission Charges to be paid by the Long Term Transmission Customers to ENCIL with respect to the Transmission Project;
(b) Approve the modification in the non-escalable Transmission charges as prayed for in para 12 of the Application and direct the LTTCs to pay the same to the Applicant; and
(c) Pass such other order(s) as the Commission may deem fit and proper in the facts and circumstances of the case.
3. The Commission in Record of Proceedings of 18.5.2010 had directed to issue notice to all Long Term Transmission Customers (LTTCs) and the applicant was also directed to serve copies of the application on the LTTCs. Reply to the petition has been filed by Haryana Power Purchase Committee on behalf of Uttar Haryana Vijli Vitaran Nigam Limited and Dakshin Haryana Vijli Vitaran Nigam Limited. The matter was heard on 8.7.2010. The representative of HPPC raised several objections as enumerated in our order dated 4.8.2010. The Commission in the same order dated 4.8.2010 had directed the concerned officer of the Power Finance Corporation who had headed the BPC to file an affidavit explaining the different stages of the bidding process and a certificate that transparency in the bidding process and selection of the successful bidder has been maintained in accordance with the Guidelines. The applicant was directed to file the documentary evidence regarding the original acquisition price and the revised acquisition price including the reasons therefor and how the applicant was entitled for relief as per para 12.1.1 of the TSA. Replies have been filed by the applicant vide its affidavit dated 12.8.2010 and by Shri C Gangopadhyay, Executive Director of Power Finance Corporation and the Chairman of ENICL, on behalf of Bid Process Coordinator vide affidavit of the same date.
4. The present application has been filed under Section 63 of the Act for adoption of tariff in respect of the transmission elements mentioned in para 1 of this order. Section 63 of the Act provides as under:
63. Notwithstanding anything contained in Section 62, the Appropriate Commission shall adopt the tariff if such tariff has been determined through transparent process of bidding in accordance with the guidelines issued by the Central Government.
5. The salient features of the Guidelines issued by the Central Government under Section 63 of the Act vide Resolution No. 11/5/2005PG(i) dated 17.4.2006 are discussed in brief as under:
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The Guidelines are applicable for procurement of transmission services for transmission of electricity through tariff based competitive bidding and for selection of transmission service provider for new transmission lines and to build, own, maintain and operate the specified transmission system elements.
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For procurement of transmission services, required for inter-State transmission, the Central Government shall notify any Central Government Organisation or any Central Public Sector Undertaking as the Bid Process Coordinator (BPC) who would be responsible for coordinating the bid process.
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The BPC shall prepare the bid documentation in accordance with the Guidelines and obtain approval of the Appropriate Commission or alternatively, the BPC can use the standard bid documents notified by the Ministry of Power. Approval of the Appropriate Commission would be necessary if any material deviation is proposed to be made in the Standard Bid Documents. Intimation about the initiation of the bid process shall be sent by the BPC to the Appropriate Commission.
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For procurement of transmission charges under the Guidelines, the BPC may adopt at its option either a two-stage process featuring separate Request for Qualifications (RFQ) and Request for Proposal(RFP) or adopt a single stage two envelope tender process combining both RFQ and RFP processes.
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RFQ or combined RFQ and RFP notice shall be issued in at least two national newspapers, website of the BPC and the appropriate Government and preferably in the trade magazines also to provide wide publicity. For the purpose of issue of RFQ minimum conditions to be met by the bidder shall be specified in the RFQ notice. The bidding shall be by way of International Competitive Bidding.
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Standard documentation to be provided in the RFQ stage shall include definitions of requirements including the details of location and technical qualifications for each component of the transmission lines, construction milestones, and financial requirements to be met by the bidders; proposed Transmission Service Agreement; period of validity of offer of bidder; conditions as specified by the Appropriate Commission for being eligible to obtain a transmission licence; and other technical and safety criteria to be met by the bidder/TSP including the provisions of IEGC.
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Standard documentations to be provided by BPC in the RFP shall include specified target dates/months for commissioning and commercial operations and start of providing transmission services; TSA proposed to be entered with the selected bidder; bid evaluation methodology to be...
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