Petition No. 4/MP/2012. Case: M/s. Aarti Steel Ltd. Vs Orissa State Load Despatch Centre, GRIDCO Limited, Indian Energy Exchange and National Load Despatch Centre. Central Electricity Regulatory Commission
| Case Number | Petition No. 4/MP/2012 |
| Counsel | For Appellant: Shri Sanjay Sen, Senior Advocate and Shri Rajiv Yadav, Advocate and For Respondents: Shri R.B. Sharma, Advocate for GRIDCO and Shri R.K. Mehta for SLDC |
| Judges | Pramod Deo, Chairperson, S. Jayaraman, V.S. Verma and M. Deena Dayalan, Members |
| Issue | Electricity Law |
| Judgement Date | May 09, 2013 |
| Court | Central Electricity Regulatory Commission |
Order:
1. The petition has been filed under clause (c) read with clause (f) of sub-section (1) of Section 79 of the Electricity Act and Regulation 26 of Central Electricity Regulatory Commission (Open Access in Inter-State Transmission) Regulations, 2008 (hereafter "the Open Access Regulations") with the following specific prayers:
(a) pass an order, directing Respondent Nos. 1 and 3 to immediately provide open access to the Petitioner for schedule of power through Indian Energy Exchange:
(b) pass an order, directing Respondent No. 1 to pay a sum of 3,05,80,846/-(Rupees three Crore five lakh eighty thousand eight hundred forty six only) to the Petitioner, being the financial loss suffered by the Petitioner on account of denial of open access;
(c) pass such other order(s), as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case.
The facts, in brief, leading to filing of the present petition are narrated in the succeeding paras.
2. The petitioner entered into MoU dated 7.2.2009 with the State Govt. of Odisha for setting up a thermal power plant with total capacity of 500 MW in Cuttack District of the State. The MoU inter alia provides that depending upon whether coal blocks are allocated to the petitioner within or outside the State of Odisha the petitioner is required to sell 14% or 12% of its exportable generation output to the State Government or any agency nominated by the State Government at variable cost and the petitioner can sell the balance power to any person of its choice. Further, in accordance with the MoU, the petitioner can sell the power output earmarked for the State to any person of its choice, whether within the State or outside, in the event of the agency nominated by the State Government not fulfilling terms and conditions of the MoU. GRIDCO Ltd., the second respondent, (hereafter "GRIDCO"), the agency designated by the State Government entered into a Power Purchase Agreement (PPA) dated 24.10.2009 with the petitioner in accordance with the MoU signed between the State Government and the petitioner. It is stated that the PPA was limited to the State Government's mandatory share of 14% or 12%, as applicable.
3. One generating unit of the power plant with capacity of 50 MW was commissioned on 5.3.2010 and was declared under commercial operational with effect from 24.4.2010. The entire output of exportable power was supplied by the petitioner to GRIDCO. Odisha Electricity Regulatory Commission (hereafter "State Commission") by its order dated 13.9.2011, fixed a final tariff of' ` 3.02/kWh for the power supplied by the petitioner to GRIDCO. The petitioner has stated that it has preferred an appeal against the State Commission's order of 13.9.2011 (Appeal No. 191/2011) which is said to have been admitted by the Appellate Tribunal vide order dated 14.12.2011.
4. The petitioner has alleged that since recovery of dues for the power supplied to GRIDCO had been a subject matter of dispute, it explored the possibilities of selling power to other entities. The petitioner has stated that it signed a Member-Client Agreement dated 17.3.2011 with M/s. Instinct Infra and Power Ltd., an interstate trading licensee and member of the Indian Energy Exchange, the third respondent (hereafter "IEX"). M/s. Instinct Infra and Power Limited are said to have applied for inter-State open access for sale of power generated by the petitioner. However, vide its letter dated 31.3.2011 State Load Despatch Centre, Odisha (hereafter "SLDC") refused to give concurrence/No objection/prior standing clearance on the ground that the petitioner had committed to supply its entire generation to the State and therefore, there was no available surplus for sale outside the State. The petitioner has alleged that since it was not able to recover its cost of generation from GRIDCO it shut down the power plant on 21.6.2011.
5. The petitioner has stated that it was granted concurrence/No Objection/standing clearance for inter-State open access for the period from 10.10.2011 to 31.10.2011 and from 1.2.2012 to 31.5.2012.
6. The petitioner has stated that vide letter dated 22.10.2011, it applied to SLDC for grant of concurrence/No Objection/prior standing clearance for sale of power through IEX during November 2011. The petitioner has stated that as it did not get response from SLDC, it informed SLDC vide letter dated 29.11.2011 that concurrence/No Objection/prior standing clearance for the open access is deemed to have been granted in accordance with the Open Access Regulations and it would be scheduling power through IEX. However, the petitioner has stated that GRIDCO by letter dated 30.11.2011 offered to purchase the petitioner's entire generation quantum at the rate approved by the State Commission in its order dated 13.9.2011 ibid. This offer was not accepted by the petitioner since, according to the petitioner, its cost of generation far exceeded the tariff approved by the State Commission. By letter dated 1.12.2011 the petitioner informed GRIDCO accordingly and also requested that till such time the decision to buy power was taken by GRIDCO, the petitioner be permitted to sell power through open access. The petitioner has stated that it also informed SLDC that since it was not given concurrence/No Objection/prior standing clearance it had to shut its power plant during November 2011.
7. The petitioner has stated that it made a fresh application dated 23.11.2011 for grant of concurrence/No Objection/prior standing clearance for open access for sale of power through IEX during December 2011. Since its application for grant of concurrence/No Objection/prior standing clearance for inter-State open access was neither accepted nor rejected by SLDC, it became entitled to seek open access on the basis of deemed concurrence/No Objection as provided under the Open Access Regulations. Accordingly, the petitioner claims to have submitted a notarised affidavit dated 7.12.2011 in the prescribed form to IEX through M/s. Instinct Infra and Power Limited. However, it has been alleged that the petitioner's power was not scheduled. SLDC, vide letter dated 8.12.2011 informed the petitioner that since GRIDCO had expressed its intention to procure the entire quantum of power generated by the petitioner, the application for concurrence/No Objection/prior standing clearance "is not considered".
8. The petitioner claims to have submitted another application dated 30.12.2011 requesting SLDC to accord concurrence/No Objection/prior standing clearance for open access during January 2012. SLDC vide letter dated 31.12.2011, informed the petitioner that its application for open access was not being considered because GRIDCO intended to procure all the power generated by the petitioner. The petitioner was further advised that "If there is any disagreement between the IPP and GRIDCO for procurement of power, a clearance from the Government of Orissa may be obtained for sale of power outside the State." In view of the aforesaid, the petitioner's application for concurrence/No Objection/prior standing clearance for inter-State open access for the month of January 2012 also stood rejected. As a result of alleged denial of open access, the petitioner claims to have suffered financial loss to the tune of ` 3,05,80,846/- as fixed costs associated with the power plant, without being able to generate any revenues.
9. From the petitioner's prayers extracted at para 1 above, it is seen that the petitioner not only seeks open access for sale of power through IEX but also seeks compensation for the losses allegedly suffered on account of denial of concurrence/No Objection/prior standing clearance for the inter-State open access by SLDC for sale of power generated by the petitioner through the power exchange. Though the replies have been filed by all the respondents, SLDC and GRIDCO have raised preliminary objections on maintainability of the petitioner's prayers, in particular the claim for monetary compensation. Therefore, in the present order only the preliminary objections on maintainability of the petitioner's claim are being examined and the replies on merits of the petitioner's claim are not being referred to for the present.
10. As the preliminary objections revolves around interpretation of clause (f) of sub-section (1) of Section 79 of the Electricity Act, sub-section (1) to the extent relevant may be noticed at this stage itself and is accordingly extracted below:
79. Functions of Central Commission.- (1) The Central Commission shall discharge the following functions, namely:-
(a) to regulate the tariff of generating companies owned or controlled by the Central Government;
(b) to regulate the tariff of generating companies other than those owned or...
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