Case: National Hydroelectric Power Corporation Limited Vs West Bengal State Electricity Board and Ors.. Central Electricity Regulatory Commission
| Judges | Ashok Basu, Chairperson, Bhanu Bhushan and A.H. Jung, Members |
| Issue | Electricity Law |
| Judgement Date | February 05, 2007 |
| Court | Central Electricity Regulatory Commission |
Order:
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This application has been filed by the petitioner, National Hydroelectric Power Corporation Ltd, (NHPC), a generating company, for review of order dated 9.5.2006 in Petition No. 175/2004, determining the tariff in respect of Rangit Hydroelectric Project, for the period 1.4.2004 to 31.3.2009.
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The petitioner has contended that there are certain fundamental errors in the said order dated 9.5.2006 and accordingly has sought review of the order on certain aspects, discussed in the succeeding paras.
INTEREST ON LOAN
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The Commission in its order dated 9.5.2006 held that when depreciation recovered in a year exceeded the amount of repayment during that year, the entire amount of depreciation was to be considered as repayment of loan for computation of interest on loan component of tariff. According to the petitioner, the conclusion arrived at by the Commission in this regard is in derogation of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations 2004 (hereinafter referred to as "the 2004 regulations").
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We have considered the submission made by the petitioner. The Commission in the order dated 9.5.2006 in Petition No. 197/2004 after elaborate discussion of the historical background, the provisions of the 2004 regulations, including the regulations relied upon by the petitioner, as discussed in paras 8 to 22 of the said order dated 9.5.2006 concluded that the entire amount of depreciation was considered as repayment of loan for tariff computation when depreciation recovered in a year was more than the amount of repayment during that year. This methodology has been applied uniformly in all cases of tariff determination for the period 2004-09, including Rangit Hydroelectric Project.
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While the petitioner laid much stress on the Commission having deviated from its own Regulation in the above respect, we find that in this particular case, there is no such deviation. As per the submissions of the petitioner, there is zero loan repayment during the year 2005-06. Thus, it is a case of moratorium, for which situation the Regulation clearly provides that depreciation amount for the year should be taken as the loan repayment, for the purpose of tariff. This is exactly what the Commission has actually done.
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It is also seen that the anomalous situation (for the petitioner) has arisen because of loan repayments in the previous tariff periods much faster than what has been contemplated in the tariff notifications/orders for those periods. We...
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