Petition No. 118/MP/2012. Case: Lanco Babandh Power Ltd. Vs Power Grid Corporation of India Ltd. and Central Electricity Authority. Central Electricity Regulatory Commission

Case NumberPetition No. 118/MP/2012
CounselFor Appellant: Shri Sanjay Sen, Advocate, Shri Mahavir Singh and Shri R. Jhala, LBPL and For Respondents: Shri Ramchandra and Shri Ashok Pal, PGCIL
JudgesPramod Deo, Chairperson, V.S. Verma and M. Deena Dayalan, Members
IssueElectricity Law
Judgement DateJune 08, 2013
CourtCentral Electricity Regulatory Commission


Pramod Deo, Chairperson and V.S. Verma, Member

  1. This petition has been filed by Lanco Babandh Power Ltd. under Regulation 32 of the CERC (Grant of Connectivity, Long-term Access, Medium-term Open Access in Inter-State Transmission and related matters) Regulations, 2009 (the Long-term Access Regulations) with the following prayers, namely:

    (a) To keep the Long Term Access (LTA) of Phase-II (Unit III & IV) of LBPL under abeyance and to allow revision in the LTA schedule for reduction of LT A quantum from 1600 MW to 800 MW in the BPTA between LBPL and PGCIL without payment of any compensation to PGCIL for such reduction in LTA capacity.

    (b) To grant any other relief as the Hon'ble Commission may consider appropriate.

    (c) The petitioner craves leave of the Hon'ble Commission may deem fit and appropriate under the circumstances of the case and in the interest of justice.

    The petitioner proposed to establish a coal based thermal power generating station with total capacity of 2640 MW in Dhenkanal District of the State of Odisha in two phases, Phase-I (2 X 660 MW) and Phase-II (2 X 660 MW) (the project). The first unit of the project was proposed to be commissioned in December 2013 and the second unit by April 2014. The commissioning of the third and fourth units was to follow. Certain other IPPs also intended to establish the generating stations in the State.

  2. The petitioner and also six other IPPs planning to set up the generating stations in the State of Odisha made applications to Power Grid Corporation of India Ltd., the first respondent in its capacity as the Central Transmission Utility for availing long-term access (LTA). The petitioner applied for LTA for capacity of 1600 MW which consisted of 800 MW from Phase-I and 800 MW from Phase-II. All the seven applications for LTA were approved by the first respondent on 29.4.2009 and consequently, a joint Bulk Power Transmission Agreement dated 24.2.2010 (BPTA) was signed by the first respondent and seven applicants for LTA, including the petitioner. The BPTA signed with the petitioner was for a capacity of 1600 MW as applied for. In accordance with the BPTA, the petitioner is required to construct Lanco Babandh-Angul Pool 400 kV 2 X D/C transmission lines with associated bays at Angul. The first petitioner is to construct, among others, Angul Pooling-Jharsuguda Pooling Station, 765 kV 2 X S/C transmission lines, as part of the Odisha System Strengthening Scheme. Further, under the BPTA, each developer was required to furnish the construction Bank Guarantee from a nationalized bank for an amount equivalent to $5 lakh/MW to enable the first respondent to recover damages in case the developer failed to construct the generating station/dedicated transmission system or made an exit or abandoned its project. The petitioner submitted the Bank Guarantee for ` 80 crore against total capacity of 1600 MW.

  3. The petitioner has submitted that Phase-I of the generating station is expected to be commissioned as already scheduled, though in its subsequent letter dated 28.9.2012 addressed to the first respondent, the petitioner has indicated the dates of commissioning of Units 1 and 2 as April 2014 and August 2014 respectively. However, development of Phase-II of the project is stated to have been delayed on account of delay in receipt of certain inputs and statutory clearances from Central/State Governments or their agencies. The principal reason for delay in development of Phase-II is said to be on account of non-availability of coal linkage and other events such as environment/forest clearances, water availability sanction, and financial closure have to logically follow the confirmation of availability of coal linkage. The petitioner has stated that it has been following up the matter with Ministry of Coal for grant of coal linkage. However, in view of looming uncertainties, it anticipates an abnormal delay in the implementation of the Phase-II of the project, though the petitioner is unable to guesstimate the expected commissioning date of Phase-II. In the light of this, the petitioner under its letter dated 17.10.2011 has requested the first respondent to keep LTA granted for Phase-II in abeyance. The request was followed by the petitioner's subsequent letter dated 16.1.2012.

  4. The first respondent after examination of the request of the petitioner recommended the matter for discussion and deliberation in the meeting of the Standing Committee on Power for Eastern Region. Accordingly, the request of the petitioner was deliberated upon in the meeting of the Standing Committee convened by Central Electricity Authority (CEA), the second respondent, on 8.2.2012. At the meeting, view expressed was that the request of the petitioner was genuine. The question of stranding of the transmission capacity was also deliberated and it was felt that no capacity would get stranded because in addition to IPPs, other generating companies like NTPC were ready to utilize the transmission capacity likely to become available consequent to reduction of capacity allocated to the petitioner. The Standing Committee, however, advised the petitioner to approach this Commission for appropriate directions. Accordingly, the present petition has been filed. The petitioner has sought permission for reduction of the LTA quantum from 1600 MW capacity to 800 MW capacity without payment of any compensation to the first respondent.

  5. The first respondent in its reply dated 31.5.2012 has generally not controverted the petitioner on the factual matrix narrated in the petition. It has brought to this Commission's notice clause 6(a) of the BPTA which provides for payment of compensation in case of defaults by the developer, though the first respondent itself has not staked claim for compensation. Clause 6(a) of the BPTA is...

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