Appeal No. 247 of 2015. Case: Vandana Vidhyut Ltd. Vs Chhattisgarh State Power Distribution Company Ltd. and Ors.. APTEL (Appellate Tribunal for Electricity)

Case NumberAppeal No. 247 of 2015
CounselFor Appellant: Raunak Jain, Swapna Seshadri, Ishaan Mukherjee, Ashwani Kumar Gupta, Mandakini Ghosh, Sandeep and Neha Garg, Advs.
JudgesRanjana P. Desai, J. (Chairperson) and I.J. Kapoor, Member (T)
IssueElectricity Act, 2003 - Sections 111, 178, 178(1), 178(2), 178(2)(ze), 181, 185, 61, 62, 79(1), 79(1)(j), 86, 86(1)(e)
Judgement DateJanuary 25, 2017
CourtAPTEL (Appellate Tribunal for Electricity)


I.J. Kapoor, Member (T)

  1. The present Appeal is being filed by M/s. Vandana Vidyut Ltd. (hereinafter referred to as the "Appellant") under Section 111 of the Electricity Act, 2003 challenging the Order dated 04.09.2015 ("Impugned Order") passed by the Chhattisgarh State Electricity Regulatory Commission (hereinafter referred to as the "State Commission") in Petition No. 17 of 2015, in the matter concerning the deduction of payment to the Appellant by Respondent No. 1 for the month of October, 2014.

  2. The Appellant, M/s. Vandana Vidhyut Ltd. is an 8 MW rice husk based biomass power generating company in the State of Chhattisgarh supplying power to Respondent No. 1.

  3. The Respondent No. 1, Chhattisgarh State Power Distribution Company Ltd. (CSPDCL) is the distribution company in the State of Chhattisgarh and is responsible for distribution of electricity within its licensed distribution area.

  4. The Respondent No. 2 is the State Electricity Regulatory Commission for the State of Chhattisgarh exercising jurisdiction and discharging functions in terms of the Electricity Act 2003.

  5. Facts of the present Appeal:

    a) The Appellant has installed Biomass Power Plant with initial installed capacity of 6 MW. The plant of the Appellant was commissioned on 1.12.2001. The Power Purchase Agreement (PPA) was signed on 02.09.2000 with erstwhile Madhya Pradesh Electricity Board (MPEB). The duration of the PPA was for a period of 10 years. After the reorganisation of the state of Madhya Pradesh (MP) into MP and Chhattisgarh the rights and obligations of the PPA were transferred to the successor entity i.e. Respondent No. 1. When the installed capacity of the power plant was enhanced from 6 to 8 MW, a Supplementary Agreement dated 24.4.2003 was entered between Appellant and the Respondent No. 1. The PPA expired on 08.10.2011. As per the PPA the tariff was fixed at the rate of Rs. 2.25/- kWh for the entire duration of PPA i.e. 10 years without any escalation based on the policy of the State Govt.

    b) The State Commission on 11.11.2005 issued the tariff order and other related conditions for biomass based power plants, based on petition No. 7/2005 filed by Chhattisgarh Biomass Energy Developers Association. In this order, the State Commission specified that the existing biomass based power plants including that of Appellant will continue to supply power to Respondent No. 1 as per their executed PPAs. This order was applicable for biomass based power projects which were to commence power generation of electricity on or after 01.04.2005.

    c) Chhattisgarh Biomass Energy Developers Association filed an appeal with this Tribunal against the order dated 11.11.2005 of the State Commission on certain aspects like modification related to tariff, wheeling and other charges etc. This Tribunal vide judgment dated 07.09.2006 set aside some part of State Commission's order and remanded matter back to the State Commission. Respondent No. 1 filed appeal No. 12/2007 with Hon'ble Supreme Court challenging the order of this Tribunal. The said appeal was dismissed by Hon'ble Supreme Court vide judgment dated 15.01.2007 saying that matter was already remitted to the State Commission. Hon'ble Supreme Court clarified that Respondent No. 1 was at liberty to raise all the contentions before the State Commission which was to decide the same untrammelled by any observations made in the judgment of this Tribunal.

    d) After detailed proceedings, the State Commission vide order dated 15.01.2008 re-determined the tariff of biomass plants on basis of norms as directed by this Tribunal and considering various parameters of tariff fixation. In this order it was held by the State Commission that the stand taken by the Respondent No. 1 in respect of PPAs (in instant case that of the Appellant) which were entered into before the Electricity Act, 2003 came into force, as legal and logical. The State Commission did not interfere with these PPAs. The PPAs entered into after the State Commission's order dated 11.11.2005 may be modified as per this order of the State Commission. Accordingly both the tariff orders dated 11.11.2005 and 15.01.2008 did not affect the terms of power supply agreed by the Appellant with Respondent No. 1 under the PPA.

    e) On 22.05.2008, for the first time the State Commission notified the tariff Regulations for plants based on non-conventional energy sources hereinafter referred as 'RE Tariff Regulations, 2008'. These regulations were applicable only to those biomass power plants which had been set up after the passing of the regulations. These regulations were not applicable to PPAs executed prior to the date of notification of these regulations. The tariff of such plants shall be based on executed PPAs in terms of the State Commission's order dated 15.01.2008. These RE Tariff Regulations made provision of scheduling power where biomass generators were required to give monthly schedule for energy proposed to be sold to a distribution licensee at least 15 days in advance.

    f) On 27.07.2012, the State Commission notified regulations for plants based on non-conventional energy sources hereinafter referred as 'RE Tariff Regulations, 2012' These regulations are applicable to renewable energy based generating stations established in the state of Chhattisgarh for projects achieving COD after April 01, 2012. These regulations also provides that biomass/non-fossil fuel based co-generation plants with installed capacity 10 MW and above shall be subjected to scheduling and merit order despatch principles. Such projects below 10 MW shall be treated as 'Must Run'.

    g) The PPA of the Appellant with Respondent No. 1 expired on 8.10.2011. Chhattisgarh Biomass Energy Developers Association with other biomass power generators filed petition No. 22/2011 before the State Commission for revision and determination of tariff for financial year 2010-11 and subsequent years. Vide order dated 28.12.2011 the State Commission with respect to variable charges decided that the variable charges determined by CERC for 2011-12 shall be made applicable for biomass generators in the state of Chhattisgarh. It also decided that variable charges for 2012-13 as and when decided by CERC shall also be applicable to biomass generators in the state of Chhattisgarh. In this way the variable charges determined by the State Commission vide order dated 28.12.2011 became applicable to the Appellant as and when fresh PPA is entered between the Appellant and Respondent No. 1. CERC vide order dated 27.03.2012 notified energy charges for sale of power from plants based on renewable energy sources. The State Commission vide order dated 28.05.2012 adopted the CERC approved variable charges for year 2012-13.

    h) The Respondent No. 1 challenged the order dated 28.12.2011 & 28.5.2012 before this Tribunal vide Appeal Nos. 66/2012 and 144/2012. One of the grounds of appeal was regarding fixation of limit upto which normal tariff was payable to biomass power producers, which had been done by the State Commission by adopting different parameters i.e. schedule and plant load factor. This Tribunal vide order dated 02.01.2014 in Review Petition No. 10/2013 in the said appeals, granted liberty to Respondent No. 1 to raise issue regarding difficulty caused to Respondent No. 1 in implementation of the order of the State Commission regarding monthly billing of normal tariff for supply of energy above 70% of the scheduled energy before the State Commission by filing a separate petition and the State Commission to consider the same on merits. Respondent No. 1 filed petition No. 14/2014 (M) before the State Commission based on the order of this Tribunal. In this petition, the Respondent No. 1 prayed for full rate of fixed charges to be paid for biomass generators if load factor is from 70% to 100%. It also prayed that fixed charges to be fixed @ 30 paise per unit shall be paid for any power below 70% and above 100% load factor as per order dated 28.12.2011 of the State Commission.

    i) The Appellant entered into fresh PPA with the Respondent No. 1 on 18.1.2013 (effective from 1.3.2013) for sale of power from 8 MW biomass based power project for a period of 20 years. As per RE Tariff Regulations, 2012, the Appellant filed a petition No. 10/2013 (T) before the State Commission for determination of project specific fixed cost. Vide interim order dated 10.7.2013, the State Commission granted the interim approval of the PPA dated 18.1.2013 and also determined interim/provisional tariff-fixed and variable charges for the year 2012-13 and 2013-14 subject to final decision on fresh PPA entered between the Appellant & Respondent No. 1. Vide order dated 19.02.2014, the State Commission approved this PPA with certain modifications. Vide order dated 04.03.2014, the State Commission determined the project specific tariff of the Appellant based on the RE Tariff Regulations, 2012. Respondent No. 1 has filed appeal No. 202/2015 against the order dated 04.03.2014 of the State Commission before this Tribunal challenging certain aspects of capital cost determination. The said appeal was dismissed by this Tribunal vide judgment dated 17.11.2015.

    j) The Appellant filed Petition No. 17/2015 (D) with the State Commission on being aggrieved with the deduction made by Respondent No. 1 from power purchase bill of the Appellant for the month of October, 2014. The deduction was made by Respondent No. 1 as the Appellant failed to adhere to the advance scheduling for supply of power as submitted to Respondent No. 1.

    k) The State Commission vide Impugned Order dated 04.09.2015 dismissed the petition filed by the Appellant on the ground that the Appellant's plant achieved COD in year 2001 at that time no Regulations were existing. The RE Regulations, 2012 therefore are not applicable...

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