Appellate Tribunal For Electricity
Jindal Steel & Power Limited vs Chhattisgarh State Electricity ... on 6 May, 2022
Judgment in A.NOs. 72 & 100 of 2016
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL NO. 72 OF 2016
&
APPEAL NO. 100 OF 2016
Dated: 06 .05.2022
Present: Hon'ble Mr. Justice R.K. Gauba, Officiating Chairperson
Hon'ble Mr. Sandesh Kumar Sharma, Technical Member
APPEAL NO. 72 OF 2016
In the matter of:
Jindal Steel & Power Limited
Jindal Centre,
12, Bhikaji Kama Place,
New Delhi - 110006.
(Through Mr. Kamal Agrawal) ....Appellant
Vs.
(1) Chhattisgarh State Electricity Regulatory Commission
Through its Secretary
Shanti Nagar, Irrigation Colony,
Raipur - 492001.
(2) Raigarh Ispat Udyog Sangh
C/o Zeon Steel Private Limited,
121, O.P. Jindal Industrial Park,
Gharghora Road, Punjipatara,
Raigarh - 496 001.
Chhattisgarh. ....Respondent(s)
Counsel for the Appellant (s) : Mr. Sanjay Sen, Sr. Adv.
Ms. Divya Chaturvedi
Mr. Saransh Shaw
Ms. Mandakini Ghosh
Mr. Prananv Sood
Mr. Manish Kharbanda
Page 1 of 70
Judgment in A.NOs. 72 & 100 of 2016
Counsel for the Respondent (s) : Mr. Anand K Ganesan
Ms. Swapna Seshadri
Mr. Aditya Dubey for R-1
Mr. Amit Kapur
Mr. Vishrov Mukherjee
Ms. Aparajita Upadhyay
Mr. Damodar Solanki for
R-2
APPEAL NO. 100 OF 2016
In the matter of:
Jindal Steel & Power Limited
Jindal Centre,
12, Bhikaji Kama Place,
New Delhi - 110006.
(Through Mr. Kamal Agrawal) ....Appellant
Vs.
(1) Raigarh Ispat Udyog Sangh
C/o Zeon Steel Private Limited,
121, O.P. Jindal Industrial Park,
Gharghora Road, Punjipatara,
Raigarh - 496 001.
Chhattisgarh.
(2) Chhattisgarh State Electricity Regulatory Commission
Through its Secretary,
Shanti Nagar, Irrigation Colony,
Raipur - 492001. ....Respondent(s)
Counsel for the Appellant (s) : Mr. Sanjay Sen, Sr. Adv.
Ms. Divya Chaturvedi
Mr. Prananv Sood
Mr. Saransh Shaw
Ms. Mandakini Ghosh
Counsel for the Respondent (s) : Mr. Amit Kapur
Page 2 of 70
Judgment in A.NOs. 72 & 100 of 2016
Mr. Vishrov Mukherjee
Ms. Aparajita Upadhyay
Mr. Damodar Solanki for
R-1
Mr. Anand K Ganesan
Ms. Swapna Seshadri
Mr. Aditya Dubey for R-2
JUDGMENT
PER HON'BLE MR SANDESH KUMAR SHARMA, TECHNICAL MEMBER
1. The instant batch of appeals have been filed by the Jindal Steel & Power Limited ("Appellant" or "JSPL") challenging the Order dated 21.01.2016 ("Impugned Order") passed in Petition no. 47/2015(M) and the Order dated 01.10.2015 passed by Chhattisgarh State Electricity Regulatory Commission (in short "CSERC" or "Respondent Commission"
or "State Commission") in (Review) Petition No. 7/2015(M), (Impugned Review Order) and the Tariff Order dated 23.12.2014 ("Impugned Tariff Order") passed in Petition No. 12/2014(T).
2. The Appellant, in Appeal No. 72 of 2016, challenged the Impugned Order on the grounds that the State Commission has rejected its claim for: -
(a) determination of cost of generation of power from Dongamahua Captive Power Plant ("DCCP") owned by the Appellant, Page 3 of 70 Judgment in A.NOs. 72 & 100 of 2016
(b) supply of power from DCPP to the consumers of Jindal Industrial Park ("JIP"), in the absence of firm surplus power from Appellant's Raigarh CPP, to meet the required load pattern of the area,
(c) not considering the remand directions, to evaluate the availability of surplus power from Appellant's Captive Power Plant ("CPP"), rendered by this Tribunal vide its judgment dated 07.03.2014 in Appeal No.89 of 2012, and
(d) allowing the Appellant to source power from the Dongamahua CPP to meet its obligation as distribution licensee under the relevant provisions.
3. The Appeal No. 100 of 2016 has been filed by the Appellant being aggrieved by the decision of the State Commission and stated that: -
(a) the State Commission has not complied by the directions of this Tribunal passed, vide judgment dated 07.03.2014 in Appeal No.89/2012 (RIUS vs. CSERC & Anr.)
(b) the State Commission has not determined the pattern of surplus power available from the Captive Power Plant after meeting the requirement of captive load of the steel plant and load pattern in Jindal Industrial Park.
(c) this Tribunal order dated 07.03.2014 has not complied in respect to evaluate the availability of surplus power from Appellant's CPP.
(d) the State Commission erred in placing reliance upon the Appellant's application dated 25.01.2005 for grant of Licence Page 4 of 70 Judgment in A.NOs. 72 & 100 of 2016 to distribute electricity and its earlier order dated 29.09.2005 granting licence to the Appellant for distribution of electricity to hold that Appellant is bound to supply power from its CPPs including the Dongamahua CPP, which was commissioned much later i.e. in the year 2010.
(e) the Appellant is free to source power from the Dongamahua CPP, however, the said supply from Dongamahua CPP cannot be called as obligation in terms of its distribution licence.
(f) in the absence of Power Purchase Agreement ("PPA") between the generator and distribution licensee, the Appellant's Dongamahua CPP cannot be held to be obligated to supply power.
(g) the tariff of Rs.2.50/- per kWh is not a 'determined' tariff i.e. tariff determined in accordance with the provisions of Sections 61, 62 and 64 of the Electricity Act read with the CSERC (Terms and Conditions for determination of tariff according to Multi-Year Tariff principles and Methodology and Procedure for determination of Expected revenue from Tariff and Charges) Regulations, 2012 ("CSERC Tariff Regulations, 2012"). Appellant was subjected to such "default" tariff as it had not filed the segregated accounts from the year of grant of licence i.e. FY 2005-06, however, the Appellant had filed the segregated accounts for the period FY 2011-12 onwards when the Impugned Order dated 23.12.2014 was passed.Page 5 of 70
Judgment in A.NOs. 72 & 100 of 2016
(h) reduced the tariff to Rs.2.50 per kWh as a penalty for failing to file the segregated accounts from the year of licence i.e. FY 2005-06 and allowing such undetermined tariff to continue vide the Impugned Review Order in spite of submission of the segregated accounts of Appellant's distribution business from the year of licence i.e. FY 2005-06.
4. Considering that the issues emerging out from the two captioned appeals are same, the two captioned appeals are taken up together for adjudication.
PARTIES
5. The Appellant - Jindal Steel & Power Limited, is a generating company within the meaning of Section 2(8) of the Electricity Act and has captive generating plants of capacity of 284 MW ("Raigarh CPP") at Patrapali Village, Ghargoda Tehsil, Raigarh District Raigarh and 540 MW ("DCPP") at Dongamahua, Chhattisgarh.
6. Respondent No. 1 - Raigarh Ispat Udyog Sangh ("RIUS") is an association comprising of members who are mainly engaged in business relating to steel production and having their industrial units in JIP.
7. Respondent No. 2 - Chhattisgarh State Electricity Regulatory Commission was constituted by the State Govt. of Chhattisgarh ("State Government") vide Notification No.3190/S/E/2002 dated 23.08.2002 read with Notification No. 432/R/353/03 dated 11.05.2014 and discharges functions enjoined upon it under Section 86 of the Electricity Act.
FACTS OF THE CASE (APPEAL NO. 72 OF 2016) Page 6 of 70 Judgment in A.NOs. 72 & 100 of 2016
8. The Appellant vide its proposal dated 28.12.2001, under the provisions of the Industrial Policy of the State Government, submitted the scheme for establishing Jindal Industrial Park for supplying power to the industrial units set up in the JIP area, the State Government, on 26.04.2002,granted approval, under Section 28 of the Indian Electricity Act, 1910 ("1910 Act"), to the Appellant for setting up the industrial park (JIP) and accordingly, on 23.10.2002, a MOU was signed between the Chhattisgarh State Industrial Development Corporation ('CSIDC') and the Appellant for setting up the JIP. Through this Memorandum of Understanding ("MOU"), the CSIDC agreed to provide incentives and facilitate clearance etc., necessary for setting up JIP.
9. Subsequently, on 29.01.2003, the State Government issued its No Objection Certificate (NOC) to the Appellant for supply of power by its Raigarh CPP, the only CPP owned by the Appellant and under operation at that time, to industrial units in JIP. Pursuant to this, the Appellant entered into Power Purchase Agreement with various consumers having industrial units in the Jindal Industrial Part for a period of 5 years.
10. The State Government, on 28.02.2004, on the recommendation of Chhattisgarh State Electricity Board (CSEB), granted approval to the Appellant under section 68 of the Act, for laying transmission and distribution lines for supply of power up to 299 MW to the 70 industrial units which were being set up in the first phase of JIP, subsequently, the Appellant connected supply of electricity to such industrial units which had installed their plant and equipment requiring supply of electricity. Pertinent to note here that on 26.05.2003, the new law i.e. the Electricity Act, 2003 (the Act 2003) was enacted by the Parliament and the Appellant commenced the supply of electricity w.e.f. 01.03.2004, the Page 7 of 70 Judgment in A.NOs. 72 & 100 of 2016 date after the enactment of the Act, to the industrial units which were already set up in JIP, without seeking a distribution licence, as required, from the State Commission.
11. It was on 25.01.2005, in compliance with the provisions of the Act and the directions given by the State, the Appellant, submitted an application to State Commission for grant of license to distribute electricity in the JIP.
12. In the said application, as submitted by the Applicant, it had proposed to supply electricity from its CPP at Raigarh and Jindal Power Limited's IPP at Tamnar, Raigarh which was set up as an IPP by one of the group companies of the Appellant considering that the capacity of the Raigarh CPP will be inadequate to supply the 299 MW of projected load. The relevant extract of the application is as under:
"The power required by the Units in JIP shall be supplied by JSPL from its power plant at Raigarh. The requisite No Objection permission for Distribution of Electricity to the units in the JIP has been granted by GoCG vide letter No. 601 dated 28.02.04.
[...] Form - 1A Form of Application for grant of Licence for Distribution of Electricity in the State of Chhattisgarh ...
10. Particulars of demand/supply Page 8 of 70 Judgment in A.NOs. 72 & 100 of 2016
(a) Expected demand in area of supply : 400 MVA (300 MW) on full implementation of the Industrial Park.
(b) Source of obtaining power :
i. 120 MVA (90 MW) from Jindal Steel & Power Ltd., Captive Power Plant at Patrapali Village, Ghargoda Tehsil, Raigarh District.
ii. 280 MVA (210 MW) from the proposed 1000 MW capacity power plant of Jindal Power Ltd., Tamnar Village, Ghargoda Tehsil, Raigarh District.
(c) Own Generation : Yes"
13. On 29.09.2005, the State Commission granted licence to the Appellant for distribution of electricity to the proposed 70 industrial consumers of the JIP with certain conditions with a maximum demand not exceeding 299 MW and at a rate not more than Rs. 2.50 per unit or at the supply rate of CSEB for that category of consumers, whichever is lower. Pertinently, in its licence order dated 29.09.2005, State Commission had not identified any particular source of power for the Appellant to procure power for the purpose of supply to its distribution license area i.e. JIP. The relevant extract is reproduced here under:
"1. ... The proposal is to supply to JIP 400 MVA (300 MW) of electricity on full implementation of the industrial park for which 120 MVA (90 MW) is proposed to be supplied from the existing captive power plant at Raigarh and 280 MVA (210 Page 9 of 70 Judgment in A.NOs. 72 & 100 of 2016 MW) from the proposed 1000 MW capacity power plant being put up by the applicant company in the same district.
[...]
16. ...The fact remains that the petitioner had an undertaking with the State Government for setting up a private industrial estate (for which the Government had even acquired private land and allocated to him); laying the necessary transmission and distribution facilities, and supplying electricity to the industries which may be set up in the industrial estate from his captive power plant. ... A distribution licensee may procure electricity from any source subject to the terms and conditions of his license and under the regulatory supervision of the Commission. However, the applicant's plea has all through been supply of power from his captive power plant."
14. The State Commission by another order dated 29.11.2005 added some more conditions in the licence were:
(a) The license is valid for a period of 25 years.
(b) JSPL is required to abide by all the relevant provisions of the Electricity Act, 2003, the National Electricity Policy, Indian Electricity Rules, 1956 and Electricity Rules, 2005, as amended from time to time.
(c) JSPL is required to abide by the general conditions of licence as given in Chapter-III, the conditions applicable to a distribution licensee as given in Chapter-V of the Licence Regulations and the relevant provisions of all the Page 10 of 70 Judgment in A.NOs. 72 & 100 of 2016 regulations issued or as may be issued by the State Commission, from time to time.
(d) JSPL is required to lay necessary distribution lines and put up sub-stations at its own cost in the two villages for supply of electricity to any person who may apply for it.
(e) The consumers of the area other than area of JIP (i.e., other consumers in the villages of Tumdih and Punjipathra of Raigarh District) shall have the option to choose between JSPL and CSEB or its successor entity(ies).
(f) Existing tariff (Rs. 2.50 per unit) being charged from the industrial consumers in the designated area of JIP shall continue to be charged by JSPL, till the tariff for supply is determined by the State Commission.
(g) For determination of tariff in the area of supply, JSPL is required to file the necessary application under Section 64 of the Electricity Act, 2003 and Clause 10 of the CSERC (Details to be furnished by licensee or generating company for determination of tariff and manner of making application) Regulations, 2004 ("Tariff Procedure Regulations") before the State Commission on or before 31.03.2006, and thereafter, in terms of the provisions of the said Regulations.
15. It is important to note here that the order dated 29.09.2005 passed by the State Commission was assailed by the Appellant, being aggrieved of the findings regarding supply of power to its consumers prior to grant of the Distribution License, before this Tribunal through Appeal No. 27 of 2006, CSEB and Chhattisgarh Vidyut Manav Abhiyanta Sangh also Page 11 of 70 Judgment in A.NOs. 72 & 100 of 2016 challenged by way of Appeal Nos. 179 & 188 of 2005, respectively, CSEB also challenged the order dated 29.11.2005 by way of Appeal No. 16 of 2006. These appeals were disposed of by this Tribunal vide common judgment dated 11.05.2006.
16. However, this Tribunal's judgment dated 11.05.2006 was challenged by way of Civil Appeal Nos. 4268, 3996 and 4529 of 2006 by CSEB, Chhattisgarh Vidyut Manav Abhiyanta Sangh and JSPL, respectively which were disposed of by the Hon'ble Supreme Court vide its judgment dated 19.09.2007 and remanded the matter to this Tribunal for fresh consideration.
17. This Tribunal vide its judgment dated 07.05.2008, in Appeal Nos. 179 and 188 of 2005 and 16 and 27 of 2006, set aside the Orders dated 29.09.2005 and 29.11.2005 passed by the State Commission granting Distribution Licence to JSPL, as also the order imposing penalty on JSPL.
18. The judgment dated 07.05.2008 rendered by this Tribunal was again challenged by way of Civil Appeal Nos. 3607-3610 of 2008 titled "JSPL v. CSERC & Ors.", an industrial consumer, Tirumala Balaji Alloys Pvt. Ltd. also filed Civil Appeal Nos. 4104-4107 of 2008 challenging the Judgment dated 07.05.2008, and the Hon'ble Supreme Court vide its Order dated 16.05.2008 admitted Civil Appeal Nos. 3607-3610 of 2008 and stayed the operation and effect of the judgment dated 07.05.2008 passed in Appeal Nos. 179 and 188 of 2005 and 16 and 27 of 2006, vide which this Tribunal had cancelled the Distribution License granted to JSPL, to this effect JSPL resumed the supply of power to its industrial units from 17.05.2008.
Page 12 of 70Judgment in A.NOs. 72 & 100 of 2016
19. Meanwhile, in pursuant, to the licence, the Appellant filed a tariff petition (Petition No.28/2006) seeking permission to file tariff petition only for 2007-08, on the ground that it has not been possible for them to segregate the accounts for the distribution business as required in the Electricity Act and the State Commission may fix only maximum ceiling of tariff for retail sale of electricity for promoting competition among distribution licensee, the State Commission vide its order dated 17.07.2006 agreed on the first prayer, however, plea for fixation of only maximum ceiling of tariff for retail sale of electricity was not accepted.
20. Subsequently, the Appellant, on 13.12.2006,filed an amendment application (Petition No.33/2006) seeking review of order dated 17.07.2006, however, the State Commission vide order dated 29.01.2007 partially allowed the amendment petition by fixing maximum ceiling tariff for the two villages falling under JSPL's jurisdiction, however, upheld its decision dated 17.07.2006 for the industrial consumers reiterating that JSPL shall file tariff petition and directed the Appellant to file the completed tariff petition, the tariff for new industrial consumers (with whom no agreement was existing at that time), was also fixed at Rs. 2.50/kWh but with the additional provision that the alternate tariff may be as determined by the Commission.
21. Being aggrieved, JSPL filed Appeal Nos. 34 & 96 of 2007 titled "Jindal Steel & Power Limited v. CSERC & Anr." challenging the review order dated 29.01.2007 passed by the State Commission in Petition No. 33 of 2006, which were disposed of by this Tribunal on 04.10.2007, observing as under:
Page 13 of 70Judgment in A.NOs. 72 & 100 of 2016 "16. At the outset, we would like to point out that so far JSPL has not filed any application for determination of its tariff as directed by the CSERC. The appellant, JSPL had set up the plea that it is not possible to segregate its accounts for distribution business and steel business. The contention was rightly rejected by the CSERC. It is not denied that it was one of the terms of the grant of distribution license to JSPL that it shall file an application for determination of tariff. Having obtained the license on the specific condition that it shall apply for determination of tariff, the appellant cannot be allowed to violate the conditions of license. Section 42 of the Act casts a duty on a distribution licensee to supply electricity in accordance with the provisions of the Act. Section 45 of the Act ordains that the price to be charged by a distribution licensee for supply of electricity by it in pursuance of Section 43 of the Act shall be in accordance with such tariff as is fixed from time to time by the Commission and conditions of his license. Therefore, distribution licensee is under a statutory obligation to supply electricity in consonance with the following two conditions:-
i) supply of energy shall be as per the tariff fixed;
ii) supply of energy shall be in accordance with the conditions of distribution license.
17. The appropriate Commission has been empowered under Section 62(1) of the Act to fix tariff in accordance with the provisions of the Act."
Page 14 of 70Judgment in A.NOs. 72 & 100 of 2016
22. Separately, the Appellant vide letter dated 11.09.2007 informed the State Commission that since the capacity of its steel plant has increased, it would be difficult to supply power to JIP from its CPP as per its commitment, further stating that:
(a) In absence of surplus power, tariff determination for power generated from JSPL's CPP will no longer be required.
(b) The 1000 MW power plant of JPL, a wholly owned subsidiary of JSPL, will commence generation in October 2007 and JSPL intends to procure 100 MW power from JPL under Section 62(1)(a) of Electricity Act, 2003.
(c) JSPL seeks permission to procure 100 MW power on short-term basis for a period of nine months w.e.f. October 2007 at Rs. 2.80 per unit.
(d) JSPL seeks permission to initiate competitive bidding under Section 63 of the Electricity Act, 2003 for procuring power.
23. In response to the request of JSPL, the State Commission vide communication dated 27.09.2007 to JSPL allowed JSPL to procure 100 MW power from JPL at a rate of Rs. 2.80 per unit for the period October 2007 to June 2008, further, noting that JSPL has long-term agreement with its consumers to provide power at Rs. 2.50 per unit.
24. The Appellant filed its tariff petition No. 23 of 2008 on 14.02.2008,for determination of tariff for FY 2008-09, and again resubmitted on 30.07.2008 as the State Commission found the petition to be incomplete on the ground that the accounts were not segregated, however, revised application was again found to be with many Page 15 of 70 Judgment in A.NOs. 72 & 100 of 2016 discrepancies, the Appellant, in response to discrepancies pointed out by the State Commission, on 01.11.2008 filed an application indicating its inability to submit the required data within 15 days and requested for two months' time to submit fresh application for the next year after incorporating all the observations made.
25. The State Commission vide communication dated 13.10.2008, extended the period of power purchase by JSPL from JPL from October 2008 to November 2008 at the maximum rate of Rs. 2.80 per unit.
26. Subsequently, the State Commission passed its Order dated 05.11.2008 in Petition No. 23 of 2008 pertaining to determination of tariff for JSPL for FY 2008-09, observing as under:
"3. ... The Commission is inclined to agree with the request of the applicant in view of the following:
(i) Despite a lapse of three months' time from the date of application, the Commission is not in a position to proceed with the task of determine ARR and hence tariff on account of the application being incomplete.
(ii) The financial year in respect of which the application has been filed has now only five months left. At present, we are already in the month of November and another two months' time for submission of required information will take us to Jan' 09 and then we will be left with only three months of the current financial year. Further, the Commission would also require some time to process and decide the tariff for which 120 days are permitted in the Act. Even if the Commission Page 16 of 70 Judgment in A.NOs. 72 & 100 of 2016 expedites the process it will take about two months' time.
Thus, by the time tariff is decided hardly one month time of the FY 2008-09 will be left. Thus, no purpose in going through the process of determination of tariff would be served.
(iii) At present, the consumers of the industrial park of the licensee are being supplied electricity @ Rs.2.50 per unit as per the agreements in force, some of which pertain to the period prior to the distribution licence was granted to the licensee. The present tariff is less than the Board's industrial tariff applicable for the similar type of consumers. Further, no representation has been received from any consumer of licensee regarding the said tariff. The Commission, therefore, would not like to interfere with subsisting agreements between consumers and the licensee.
In view of the above, the Commission comes to the conclusion that no useful purpose would be served in determination of tariff for the current year. The application for tariff for the year 2008-09 therefore need not be proceeded with and be filed without any decision. The licensee is directed to continue to provide electricity to all its consumers at the provisional tariff as per our order dated 29.09.05 in Petition No. 03 of 2005 and as amended by order dated 17.07.06 against Petition No. 28 of 2006 (M), irrespective of whether the subsisting agreement with consumers last till the end of financial year or not. The licensee is further directed to ensure that full and complete information as per the comments/observations communicated on the present Page 17 of 70 Judgment in A.NOs. 72 & 100 of 2016 application is submitted in the fresh tariff application which will be for the year 2009-10 not later than end December, 2008."
27. Thereafter, the Appellant filed its another Tariff Petition No.17/2009 for approval of Annual Revenue Requirement ("ARR") and determination of retail tariff for distribution business for the financial year 2009-10, informed that there will be no surplus power available from its CPP because of capacity addition in its Steel Plant. The State Commission disposed of the said petition by order dated 27.06.2009. Pertinently, the State Commission vide the said order directed that:
"6.1...In the absence of segregated accounts for distribution business, the Commission at present accepts the methodology adopted by JSPL for allocation of fixed assets for its distribution business...
------
10.1... In the absence of authenticated segregation of data for distribution segment of M/s JSPL, the Commission is left with no other option but to approve the gross employee expenses of Rs. 303.61 lakhs at present for estimating the expenses.
-----
12... While analyzing the ARR, many discrepancies were noticed mainly because the accounts for the distribution and supply business have not been separated from the main business of the company... the Commission finds it difficult Page 18 of 70 Judgment in A.NOs. 72 & 100 of 2016 to arrive at realistic ARR due to unavailability of separate accounts for the business for which license was granted.
13... Under the circumstances, in the interest of consumers the Commissions decides only to fix the maximum ceiling tariff in pursuance of the provision of Section 62(1) of the Act. This ceiling shall be as obtaining for consumers of CSPDCL in the State. The licensee shall not, in other words, charge a tariff for its consumers which is more than the tariff applicable to the same category of consumers of CSPDCL. The Commission shall undertake a true up exercise on the basis of the actual cost of supply when the next tariff petition is submitted by the licensee.
14. DIRECTIONS
(i) In accordance with the terms and conditions of the license, a separate accounting of distribution and supply business is required to be kept. This has repeatedly been brought to the notice of the licensee. The separation of accounts may be confirmed within 3 months. Failure to comply with direction will result in reduction in tariff to Rs.
2.50 per unit as is the licensee's agreement with most consumers.
......
(ix) The licensee is directed to submit the next tariff application at the end of November, 2009 with complete information based on separate account of licensed business."
Page 19 of 70Judgment in A.NOs. 72 & 100 of 2016
28. In the light of the State Commission's order 27.06.2009, a new supply agreement was signed on 06.07.2009 between the Appellant and various industrial units of JIP.
29. In the order dated 27.06.2009, the State Commission has relied upon its Suo-moto order dated 18.04.2009 in respect of power purchase by CSPDCL in short term from CPPs / IPPs up to a ceiling price of Rs 2.95 per unit with 5% extra tariff for peak hours. In view of above order, the State Commission allowed JSPL to procure power from JPL at Rs. 3.0 per unit.
"5.2. As regards purchase of power form M/s Jindal Power Ltd. (JPL), the licensee has informed that the rate of purchase is Rs.
5.40 per unit and this rate has been obtained on case-I bidding basis. The matter regarding purchase of power by the licensee was separately dealt with by the Commission under section 86(1)(b) of the Act. In this case, the Commission had finally ordered that JSPL may procure power from JPL at the same rate at which JPL is supplying power to Chhattisgarh State Power Distribution Co. Ltd. (CSPDCL) w.e.f. 01.04.2009. This was a provisional order and the JSPL was advised to file a separate petition for purchase of power for the year 2009-10 under section 86(1)(b) of the Act.
The Commission in its order dated 18.04.2009 has allowed maximum base price of Rs. 2.95 per unit for supply of power to CSPDCL at a load factor of 80% and above by the captive generating plants / IPPs of the State which included JPL. The rate of power purchase for peak hours is 5% more than the rates Page 20 of 70 Judgment in A.NOs. 72 & 100 of 2016 approved for off-peak hours. In view of above orders of the Commission, the weighted average power purchase rate of Rs. 3 per unit, is therefore admissible at present for the current year."
30. The Appellant, separately, filed Petition No. 22 of 2010 for approval of power procurement plan (short-term plan) of JSPL for the period FY 2010-11, the State Commission disposed of the petition by its order dated 27.10.2010, approving the short-term power procurement plan of JSPL for the period FY 2010-11 and observed as under:
"1. M/s JSPL was issued licence for distribution of electricity vide order dated 29.11.2005. According to this order, the distribution licence shall be valid for a period of twenty five years from the date of issue. Further, as per this order, M/s JSPL can undertake distribution of electricity in the Jindal Industrial Park (JIP for short), limited to 70 industrial consumers with a maximum demand not exceeding 299 MW, as approved by the Government of Chhattisgarh, in Tumdih and Punjpathra villages of Gharghoda tahsil of Raigarh District and also in the remaining areas of these two villages. According to submission made by JSPL in the licence application, there was a plan to supply power to 70 industrial consumers in JIP with a maximum demand not exceeding 299 MW. The licensee i.e. JSPL has set up the industrial area (JIP) on the basis of understanding with the State Government that industries set up would be supplied surplus power available from their captive generating plant.Page 21 of 70
Judgment in A.NOs. 72 & 100 of 2016 The order dated 29.09.2005 passed in petition No. 03 of 2005 in the matter of "application for distribution licence by M/s Jindal Steel and Power Limited" shows that, M/s JSPL, while submitting application for distribution licence has indicated that the proposal was to supply to JIP 400 MVA (300 MW) of electricity on full implementation of the industrial park for which 120 MVA (90 MW) is proposed to be supplied from the existing captive power plant at Raigarh and 280 MVA (210 MW) from the proposed 1000 MW capacity power plant being put up by the M/s Jindal Power Ltd. (JPL for short) a wholly owned subsidiary of JSPL in the same district.
It is to take note that the mentioned captive generating plant of JSPL was under operation at the time of issuing licence to JSPL. Since the distribution licensee itself possessed a captive generating plant of its steel business, so the availability of power for distribution business of JSPL was ascertained. This position is also admitted in the para 2.14 of the power procurement plan submitted by applicant.
2. Subsequently, after issuing the licence, M/s JSPL took different position. In September, 2007, JSPL informed that since the capacity of their steel plant has increased and they require more power for their steel plant so it is difficult to supply power to JIP from the CPP (of JSPL) as per commitment. In the letter dated 11.09.2007, JSPL stated that "the 1000 MW IPP of Jindal Power Ltd. (JPL), a wholly owned subsidiary of JSPL, will commence generation in Oct 2007 and JSPL intends to procure 100 MW power from JPL under Section 62(1)(a) of Act." M/s JSPL sought permission Page 22 of 70 Judgment in A.NOs. 72 & 100 of 2016 to procure 100 MW power on short-term basis for a period of nine months w.e.f. Oct 2007 at Rs 2.80 per unit. It was also said that they want to initiate bidding under Section 63 for meeting long-term requirement of industrial park. Subsequently vide their letter dated 20th November 2007, M/s JSPL submitted an application before the Commission to permit them to initiate competitive bidding under Section 63 for procuring power. JSPL sought permission to carry out medium-term bidding process under Section 63. JSPL stated in its letter that:
"JSPL is aware of its obligations to provide reliable and uninterrupted power to its consumers and is therefore eager to enter into long-term supply agreements for procurement of power from other power producer.
In absence of surplus power, tariff determination for power generated from JSPL's captive power plant will no longer be required."
Three points emerge from this letter of JSPL. First, as per this letter, the existing captive generating plant of JSPL was unable to supply power for distribution business of JSPL. Second, for the first time through this letter, the JSPL showed its intention to purchase power from "other" power producers. Third, with this proposal of power procurement through bidding process, tariff determination of JSPL's captive plant for supply of power to the distribution licensee, will no longer be required.
Page 23 of 70Judgment in A.NOs. 72 & 100 of 2016
3. As per the provisions and spirit of Electricity Act, 2003, the Commission accorded approval and permitted JSPL to initiate bidding process. Since the bidding process could not be completed till June 2008, JSPL sought extension to purchase 100 MW power from JPL for a further period of three months (July to Sept. 2008) at Rs 2.80 per unit.In September 2008, JSPL submitted the bidding results. According to this, M/s JPL emerged as the lowest bidder quoting Rs 6.30 per unit. The proposal of JSPL to approve rate of Rs. 6.30 per unit was not accepted and tariff was not adopted. Since the period for procurement of power by JSPL from JPL on short-term basis was to complete on Sept 2008, on the request of JSPL, the Commission extended the period of short-term purchase of power by JSPL from the JPL at Rs 2.80 per unit for further period of two months. In December 2008, the Commission ordered and intimated JSPL that the result of competitive bidding is not accepted. After this, M/s JSPL sought permission for short-term purchase of power from JPL at the rate fixed by the Commission for short-term power purchase price by State distribution utility from CPPs/IPPs of the State. Presently, since then, JSPL is continuing this practice and modality of power procurement.
4. The details (table 8, page no 11) of power procurement plan submitted by JSPL shows that in the year 2008-09, M/s JSPL has purchased 496.25 MU from captive unit of JSPL at Rs 2.32 per unit and 113.54 MU from JPL at Rs 2.80 per unit. The fact submitted in power procurement plan reveals that for the year 2008-09, M/s JSPL sought permission to procure Page 24 of 70 Judgment in A.NOs. 72 & 100 of 2016 total power (100 MW) from the JPL, but in actual it has sourced power from JSPL captive generating plant and the quantum of power received from JSPL's CPP was much more than that of power purchase quantum from JPL plant.
It is pertinent to mention that while seeking approval for short-term power purchase, M/s JSPL submitted that since the power requirement in the steel industry (of JSPL) has increased and so it may not be possible for the captive power plant of JSPL to supply power for distribution business of JSPL. But the fact submitted by applicant indicates that, in the year 2008-09, captive plant of JSPL supplied major portion of power for distribution segment of JSPL. In the year 2009-10, JSPL's captive plant did not supply power for JSPL's distribution business, but JSPL entered into an agreement dated 30.03.2009 with Chhattisgarh State Power Distribution Company Ltd. (CSPDCL) i.e. State utility for supply of 50 MW of power over and above already contracted 70 MW power from JSPL's existing captive plant for the year 2009-10 and 2010-11. During the proceeding of this case the Commission asked JSPL to clarify the position on this issue. It is noticed that there are different versions in JSPL's reply. The relevant content of their letter dated 29.07.2010 is reproduced below:
"During last few years (FY 2007-08, 2008-09 and 2009-
10), the steel business of JSPL has been significantly expanded resulting into increase in consumption of power generated from captive plant. During these years, due to expansion of steel business, the power availability has Page 25 of 70 Judgment in A.NOs. 72 & 100 of 2016 reduced because of expansion of steel capacity. As also, we have to meet commitment of power supply to the Board as per agreement of the company with the Board"
But in letter dated 19.08.2010, JSPL submitted that:
"During FY 2008-09, there was slow down in steel business and consumption of power by the steel business of JSPL was quite low in comparison to generation of power by CPP, which resulted in surplus availability of power that had been supplied to the licensed distribution business."
JSPL has further stated that the intention of seeking permission to purchase power from JPL was to meet out the gap between demand of licensee's distribution business and surplus power available with CPP of JSPL. In letters dated 19.08.2010 and 07.09.2010, the licensee has submitted and accepted that JSPL's CGP had entered into a supplementary agreement with CSPDCL on 30.03.2009 for supply of additional 50 MW power.
At the time of seeking approval for short-term power purchase for the year 2008-09, JSPL had power requirement of approximately 100 MW and, JSPL sought permission for 100 MW short-term power purchase from JPL plant, which is its total requirement. This means that it wanted to procure its 100% power requirement from JPL. At that point of time M/s JSPL had submitted that the power requirement in the steel industry (of JSPL) has increased and so it may not be possible for the captive unit of JSPL to supply power for Page 26 of 70 Judgment in A.NOs. 72 & 100 of 2016 distribution business of JSPL. Subsequently for the year 2009-10 and 2010-11, JSPL entered into 50 MW PPA with CSPDCL. The question arises that when there was no surplus power available in JSPL's CPP, how it had entered in 50 MW power supply agreement with CSPDCL for the year 2009-10 and 2010-11. Why JSPL CPP could not supply this power for JSPL distribution business. From the above observation it is clear that there was surplus power available with JSPL CPP in 2008-09, 2009-10 and also 2010-11. It is observed that the licensee is taking different position at different point of time and there are contradiction in facts submitted to the Commission. Such an attitude of licensee and its attempt to misguide Commission during quasi-judicial process cannot be appreciated. JSPL's submission in letter dated 19.08.2010 that the intention of seeking permission to purchase power from JPL was to meet out the gap between demand of licensee distribution business and surplus power available with CPP of JSPL does not appears to be correct."
31. Subsequently, the Appellant filed Petition No. 26 of 2011 for approval of long-term procurement of power through tariff based competitive bidding process under Case-I bidding framework which was disposed of by the State Commission vide its order dated 31.12.2011, observing that:
(a) By Order dated 27.10.2010, JSPL was directed to file power procurement plan within 3 months from date of order. No such detailed plan has been submitted by JSPL.Page 27 of 70
Judgment in A.NOs. 72 & 100 of 2016
(b) Though JSPL has stated that due to expansion of its steel business, the CPP is not able to fulfil the requirement of stable power for distribution business on long-term basis, however, it has not been made clear that actually what minimum quantum of stable power can be supplied by JSPL. Without having a clear statement of power availability from the licensee's own sources, deciding the quantum of power which needs to be procured through long-term PPA may suffer from infirmity.
(c) JSPL was directed to submit within one month, a detailed power requirement plan indicating the last five years actual consumption data along with the future projection, so that the long-term power to be requisitioned through bid may be assessed in a rational manner.
(d) The petition is partially disposed of as far as it related to the approval sought for deviation from the standard bid documents. However, regarding quantum of power to be procured through bidding is left to be decided after submission of desired data by JSPL.
32. The Appellant, on 14.01.2011, also filed Petition No.06/2011 (T) for the year 2011-12 before the State Commission which was disposed of vide the tariff order dated 08.02.2012, deciding the provisional true up of FY 2009-10, determination of ARR for FY 2010-11 & FY 2011-12 and retail tariff for FY 2011-12 at Rs. 2.75 per kWh for HT Steel Industries at 33 kV, Rs. 2.85 per unit for HT Steel Industries at 11 kV and Rs. 3.30 per kWh for other HT Industries.
Page 28 of 70Judgment in A.NOs. 72 & 100 of 2016
33. The Respondent no. 2-RIUS, challenged the tariff order dated 08.02.2012 passed by the State Commission, through an Appeal No.89/2012 (RIUS vs. CSERC & Anr.) before this Tribunal wherein vide judgment dated 07.03.2014, this Tribunal set aside the said tariff order and remanded the matter with the direction to the State Commission to pass consequential order in terms of the following: -
(a) The first issue relating to surplus power from the Captive Power Plant of Jindal Steel is decided in favour of the Appellant. The State Commission is directed to re-determine the power purchase cost as per the directions given in Paragraph-23 of this Judgment.
(b) The Second Issue regarding delay in filing the tariff petition is allowed in favour of the Appellant with the directions to the State Commission not to pass on the burden on account of delay in filing of the tariff Petition by Jindal Steel to the consumers in the form of increase in tariff due to carrying cost.
(c) The third issue regarding segregated accounts is also decided in favour of the Appellant with the directions to the State Commission not to entertain any Petition of Jindal Steel for enhancement of tariff in the event of failure to submit the segregated accounts as per the directions of the State Commission in future."
34. It is important to note here, the observations of this Tribunal recorded under para 23 of the judgment dated 07.03.2014, as under:
"In view of the above, we are constrained to conclude that the State Commission's finding on this issue is wrong and the Page 29 of 70 Judgment in A.NOs. 72 & 100 of 2016 same is liable to be set aside. The State Commission should have examined the pattern of surplus power available from the captive power plant after meeting the requirement of captive load of the Steel Plant and load pattern in the licensed area of Jindal Steel and should have considered part of energy supplied in the licensed area from the Captive Power Plant of Jindal Steel. Unfortunately, this has not been done. Therefore, we remand the matter with directions to the State Commission to carry out the exercise and evaluate the energy from the Captive Power Plant that should have been booked to distribution business of Jindal Steel at the cost of the generation tariff of Jindal Steel's Captive Power Plant. The consequential relief may be passed on to the Appellant and other consumers. The State Commission should also facilitate increasing the contract demand of Jindal Steel from 1 MW to 80 MW from CSPDCL as sought by Jindal Steel for meeting the increased load of Jindal Steel. This will help in availability of continuous and sustainable supply from the Captive Power Plant to Jindal Industrial Park in future."
35. In compliance to the remand order, the State Commission vide letter dated 02.03.2015 directed JSPL to withhold the Competitive Bidding process till the time the State Commission ascertain the surplus power from JSPL's CPP in view of the Remand Judgment dated 07.03.2014.
36. Meanwhile the Appellant filed Tariff Petition being Petition no.39/2012 (T) and another Tariff Petition being Petition No.55/2012(T) for determination of the ARR for control period FY 2013-14 and Page 30 of 70 Judgment in A.NOs. 72 & 100 of 2016 determination of the tariff for the FY 2013-14. The order disposing of both these petitions came up in appeal (Appeal Nos. 213/2013 and 214/2013) before this Tribunal and was decided by a common judgment dated 01.07.2014, relevant extract is as under:
"Consequently, the instant Appeals, being Appeal Nos. 213/2013 and 214/2013 are allowed only in part as indicated above. The State Commission is directed to pass consequential order at the earliest. No order as to costs."
37. In view of the directions passed in Appeal No.89/2012 (RIUS vs. CSERC & Anr.), the Appellant filed a Tariff Petition No.12/2014 (T) for determination of tariff for FY 2014-15 along with revised estimates of Multi Year Annual Revenue Requirement for the licensed distribution business for the control period from FYs 2013-14 to 2015-16 and true up of ARR for FY 2012-13. In accordance with the directions, passed by the Hon'ble Tribunal vide judgment dated 07.03.2014, the State Commission was to deal inter alia on the following aspects: -
(a) The determination of the availability of pattern of surplus power from the CPPs of the Appellant after meeting the requirement of captive load of the steel plant and load pattern in JIP and;
(b) Filing of the segregated accounts of the distribution business of the Appellant in accordance with the order dated 07.03.2014 of this Tribunal.Page 31 of 70
Judgment in A.NOs. 72 & 100 of 2016
38. JSPL, filed fresh Petition, being Petition No. 12 of 2014, on 20.01.2014 for determination of tariff for FY 2014-15 along with revised estimates of Multi-Year ARR for its distribution business for the Control Period FY 2013-14 to FY 2015-16 and true up of ARR for FY 2012-13, however, the Petition was again found incomplete as the required segregated audited account for the FY 2012-13 was not submitted with the petition, on direction, JSPL submitted some accounts before the State Commission in Petition No. 12 of 2014, thereafter, the said petition was registered on 10.03.2014.
39. The State Commission examined the Tariff Petition No. 12 of 2014, in the light of directions given by this Tribunal vide judgment dated 07.03.2014.
40. Meanwhile, the State Commission, on 12.06.2014, issued Tariff Order in Petition Nos. 5-8 of 2014 for CSPDCL for FY 2014-15 and final true-up for Previous Years of CSPGCL, CSPTCL, SLDC and CSPDCL, wherein, the State Commission observed that the load curve prepared by SLDC depicts that the injection pattern of the power supplied by JSPL to CSPDCL has wide variation, supply from JSPL is varying frequently and it is unstable / non-firm power. However, the said observation was made by the State Commission in the Tariff Petition filed by State Utilities in respect of determination of their Tariff. The State Commission's order was upheld by this Tribunal vide Judgment dated 26.05.2016 in Appeal Nos. 41 of 2015 and 67 of 2015, noting therein as under:
"10. (A) Page 32 of 70 Judgment in A.NOs. 72 & 100 of 2016 ...
(vii) We are of the considered Opinion that injection pattern of such unstable power supply causes even commercial implications, besides creating disturbance in the demand supply balance. Since the surplus power supply from JSPL has been fluctuating in nature and unstable the purchase price of non firm power cannot be equated with purchase price of firm power and has to be given treatment as in the case of purchase of infirm power and the purchase cost of such type of power has to be significantly lower than the cost of firm power. We are in agreement with the findings of the Impugned Order of the State Commission on this issue and decide this issue against the Appellant."
41. The Respondent, RIUS, submitted its objections to Petition No. 12 of 2014 stating that:
(a) The argument of power being unreliable and fluctuating for supply to JIP had already been rejected by this Hon'ble Tribunal in the Remand Judgment dated 07.03.2014.
(b) JSPL had been supplying power to the consumers in JIP from its CPP till October 2007 and the claim of JSPL of the same power suddenly becoming unreliable and fluctuating after October 2007 is very strange.
(c) JSPL's claim of there being no surplus power from CPP is baseless.
(d) Even if it is assumed that the surplus power available from CPP is unreliable and fluctuating, the CPP is connected with the State grid at 220 kV. The State grid can definitely absorb the Page 33 of 70 Judgment in A.NOs. 72 & 100 of 2016 alleged fluctuations (if any) of the surplus power available from CPP.
42. We fail to understand the role of the State Commission at this stage and even the objections raised by the Respondent, RIUS. The responsibility of meeting the reliable and uninterrupted power supply cannot be left to the inertia of the State Grid as it may badly affect the security of the Grid. Further, vague comments like "no surplus power available from CPP" cannot be appreciated as carries no weight to the extent that such capacity can be accurately determined in real time and in fact always available with the system operator. The State Commission is duty bound to obtain such capacity with its pattern from the appropriate authorities like SLDC.
43. The State Commission, on 21.11.2014, requested JSPL to file the requisite audited accounts by 29.11.2014, including the following in Petition No. 12 of 2014:
(a) Unit wise installed capacity of CPP as on 01.04.2014 along with COD.
(b) Daily generation in kWh by CPP from FY 2010-11 onwards.
(c) Electricity consumed in kWh (daily) by captive loads from FY 2010 onwards.
(d) Details of electricity sold (daily) in kWh from its CPP from FY 2010-11 to other then consumer at JIP.
(e) Total electricity consumed (daily) in kWh in JIP from FY 2010-11.Page 34 of 70
Judgment in A.NOs. 72 & 100 of 2016
44. However, it has been submitted that the Appellant failed to furnish the above information before the State Commission. The State Commission passed the Impugned Tariff Order dated 23.12.2014 in Petition No. 12 of 2014, the relevant extract is as under: -
"55. JSPL has been asked to submit the following information to have a picture of the facts regarding availability of surplus power of its CPP vide letter dated 21/08/2014 and 21/11/2014;
a) Unit-wise installed capacity of captive generating plant as on 01/04/2014 along with commercial operation date.
b) Daily generation in KWH by captive power plant from FY 2010-11 onwards.
c) Electricity consumed in KWH (daily) by captive loads from FY 2010-11 onwards.
d) Details of electricity sold (daily) in KWH from its captive power plant from FY 2010-11 to other than consumer at Jindal Industrial Park (JIP).
e) Total electricity consumed (daily) in KWH in JIP from FY 2010-11.
56. In response, M/s JSPL did not provide the data in KWH units but submitted the same in different units, hence, in absence of data it is difficult to ascertain quantum of electricity needed for supplying to JIP and quantum how much surplus energy sold by M/s JSPL to others.Page 35 of 70
Judgment in A.NOs. 72 & 100 of 2016
57. However, RIUS has provided the table wherein it has calculated the year-wise quantum of electricity M/s JSPL has sold which was desired from the JSPL.
58. Since after repeated directions M/s JSPL has failed to provide the information to ascertain availability of surplus power, it will be proper to analyze the data provided by the RIUS. By analysis of these data, it appears that sufficient surplus power was available to supply power to its consumers.
59. Now as the considerable time has gone since the Hon'ble ATE has passed above mentioned order wherein it has been directed to give effect the content of the order at the earliest and also, considerable time has gone since the filing of this petition.
60. Even after elapsing of so much time, JSPL has failed provide relevant information to decide the matter. Hence, it would be proper to pass this order in absence such information.
61. It is also worth to mention that Commission has issued some directions in the tariff order passed for ARR of FY 2009- 10 for JSPL's licensed distribution business. Relevant portion of the direction has been reproduced as under;
"14. DIRECTIONS
(i) In accordance with the terms and conditions of the license, a separate accounting of distribution and supply business is required to be kept. This has repeatedly been brought to the notice of the licensee. The separation of accounts may be confirmed within 3 months. Failure to Page 36 of 70 Judgment in A.NOs. 72 & 100 of 2016 comply with direction will result in reduction in tariff to Rs.
2.50 per unit as is the licensee's agreement with most consumers."
62. Hon'ble ATE has also directed to determine the generation tariff of JSPL's CPP to book to distribution business of JSPL.
63. For determining the power generation cost of power generated from JSPL's CPP, at present, it is not possible to determine the same because of non-availability of data. Hence, Commission is directing JSPL to file an application for the same.
64. In its submission, JSPL has submitted that it has to purchase coal at a higher rate on account of situation arisen after judgment of Hon'ble Supreme Court. It is very clear issue that while determining the tariff for CPP, Commission will calculate the same complying provisions of applicable regulations which shall automatically take care of actual coal cost.
65. On the submission of the JSPL that surplus power from CPP of 325.7 MW should only be considered, it is not agreeable as if same is agreed then capacity of CPP and captive load both should be freezed to a value as on date of issue of license. In that case, there will be no issue of examining the surplus power because at that time JSPL was in comfortable position to supply power to consumers of JIP. Submission dated 15/12/2014 of RIUS has also made the same argument.
Page 37 of 70Judgment in A.NOs. 72 & 100 of 2016
66. It has been observed that delay in submitting the information by JSPL is unnecessarily delaying the decision, hence, in the interest of justice and a view taken by this Commission that on not filing of proper segregated audited account, Commission will reduce the tariff to 2.50 per unit as is the licensee's agreement with most consumers.
67. Now that JSPL has been allowed a considerable time to file the segregated audited account but same is still to be filed. Hence, we have no option other than to reduce the tariff to Rs. 2.50 per unit.
68. Therefore, we fix a tariff of Rs. 2.50/- with effect from 1st January 2015 with terms and conditions of original agreement signed between consumers of JIP and JSPL subject to condition that same shall be adjusted retrospectively on either side after truing up of ARR on submission of proper data by the JSPL.
69. JSPL is directed to file the petition for ARR and retail tariff for FY 2015-16 along with the segregated audited account since the date of issue of the license for true up of ARR of previous years.
70. JSPL is also directed to file an application for determination of tariff of its CPP since the financial year from which it has charged the Commission's determined tariff to its consumers of JIP. We order accordingly."
Page 38 of 70Judgment in A.NOs. 72 & 100 of 2016
45. Being aggrieved by the order dated 23.12.2014, JSPL, filed Review Petition No. 7 of 2015, which was dismissed by of the State Commission on 01.10.2015 with directions to JSPL to file a petition for determination of cost of generation of its captive power plant for the year 2009-10 and onwards at the earliest.
46. Hence the present captioned Appeal No. 100 of 2016 is filed by JSPL, challenging the Impugned Review Order dated 01.10.2015 passed in Review Petition No. 7 of 2015 along with the Impugned Tariff Order dated 23.12.2014 passed in Petition No. 12 of 2014, and further, requested for amending para21 of the said Appeal through I.A. No. 21 of 2016 dated 12.01.2016, as under:
"To declare that the Appellant's Raigarh CPP has no surplus power available on continuous and regular basis for supplying to the industrial consumers of Jindal Industrial Park; and"
47. Separately, JSPL filed Petition No. 47 of 2015 before the State Commission for determination of cost of generation of power from its Dongamahua CPP which was dismissed by the State Commission vide order dated 21.01.2016, observing that:
"8. After hearing the petitioner on the point of admission of this case, we had passed orders on admission on 27.08.2015, in which the petitioner was directed to file complete petition for determination cost of generation tariff of all it's captive power plants, situated at Dongamahua and Raigarh, which is according to the above referred judgment of Hon'ble APTEL.Page 39 of 70
Judgment in A.NOs. 72 & 100 of 2016
9. Despite the order, the petitioner has not complied the order and therefore, a reminder no. 1696 dated 28.09.2015 was sent to the petitioner with direction to comply with the order positively by 16.10.2015.
10. Though, the reminder has been received by the petitioner, no step has been taken for compliance of the order. In this situation, we have decided on 04.12.2015 to issue last reminder to the petitioner. Accordingly, last reminder no. 2130 dated 05.12.2015 has been served upon the petitioner with direction to comply the order dated 27.08.2015 within 15 days with a warning in case of default, it shall be presumed that the petitioner has nothing to say on the matter and we proceed accordingly.
11. The last reminder was served upon the petitioner on 07.12.2015, but till the date the petitioner has not filed complete petition for compliance of the order dated 27.08.2015. However, the petitioner, vide letter dated 21.12.2015, has informed that the petitioner has preferred an appeal against the order dated 01.10.2015, passed by the Commission in petition no. 07 of 2015(M), in which the directions, given in order dated 27.08.2015 in petition no. 47 of 2015(M) and 48 of 2015(M) has been reiterated. The appeal is listed for hearing by the APTEL on 02.02.2016. With the letter the petitioner has also enclosed order dated 07.12.2015 of the Court-II of the APTEL. It is observed from perusal of the order, no stay has been granted by the APTEL against the proceedings pending before this Commission. It is also appeared that delay in filing appeal is yet to be condoned and Page 40 of 70 Judgment in A.NOs. 72 & 100 of 2016 the appeal is not admitted yet. In this situation, it would not be appropriate to defer the proceedings of this case till the disposal of the said appeal.
12. We feel that, despite given several opportunities, the petitioner has failed to file complete petition as directed by us, in accordance with the Hon'ble APTEL's judgment in appeal no. 89 of 2012. Grant of further opportunities or deferment of the proceedings, on the basis of an unadmitted and unregistered appeal, would amount destruction of principles of natural justice, hence, we are constrained to dismiss the petition for non-prosecution."
48. JSPL challenged the order dated 21.01.2016 passed in Petition No. 47 of 2015 through the captioned Appeal No. 72 of 2016.
49. During the pendency of the dispute, the supply to the industrial consumers was disconnected, accordingly, the State Commission issued Notice dated 13.04.2016 to JSPL on RIUS's representation dated 07.04.2016 seeking JSPL's response / report with respect to disconnection of power supply at JIP without following the laws and rules for disconnection of power supply by a distribution licensee.
50. Meanwhile, some settlements were arrived at by the parties and approached the High Court of Chhattisgarh, which in turn was challenged by the State Commission citing that the issue of determination of retail tariff for the consumers is vested solely with the State Commission.
Page 41 of 70Judgment in A.NOs. 72 & 100 of 2016
51. M/s Tirumala Balaji Alloys Pvt. Ltd., M/s. Vandana Energy & Steel Pvt. Ltd. and Ajay Ingot Rolling Mills Pvt. Ltd. approached the High Court of Chhattisgarh by way of Writ Petition Nos. 921, 940 and 1003 of 2016, challenging the State Commission's letter dated 31.03.2016 wherein JSPL was requested to file a petition for determination of tariff.
52. On 13.04.2016, the High Court passed its interim order in W.P. Nos. 921 and 940 of 2021 and noted that as agreed by the petitioner consumers, power supplied to the petitioner consumers will be charged at Rs. 4.20 per unit, subject to final adjudication by this Tribunal, as under:
"Heard on interim prayer too.
... If electricity is not restored, the industry shall also suffer closure and may turn sick. The order dated 31.03.2016 though has taken into note that it will have impact on the consumer but the perusal of the documents would show that the consumer i.e. the petitioner and the other persons were not heard before passing such order. The petitioner contended that presently they are ready and willing to pay the electricity @ Rs.4.20 per unit to revive the industry as it is completely closed.
Considering such submission as an interim measure, it is directed that the effect and operation of the order dated 31.03.2016 (Annexure P/14) shall remain stayed till the final adjudication of this petition.
It is observed that, the petitioner as offered shall be obliged to pay the electricity charges @ Rs.4.20 per unit, which would be subject to the final adjudication before the appellate authority.Page 42 of 70
Judgment in A.NOs. 72 & 100 of 2016 It is further observed that Jindal Steel and Power Limited be entitled to supply the electricity to the petitioner from Dongamauha power plant without prejudice to their right. It is expected that restoration of power shall be done expeditiously as possible."
53. RIUS also filed Writ Petition No. 1009 of 2016 before the High Court and raising its concern regarding disconnection of power by JSPL, however, the same was withdrawn after negotiating and finalising an agreement with JSPL for supply of power from Dongamahua CPP at the rate of Rs. 4 per unit and the supply of power to the members of RIUS was commenced from 22.04.2016 onwards, however, RIUS vide letter dated 21.09.2016, filed complaint with the State Commission that JSPL is disobeying the Impugned Tariff Order dated 23.12.2014 and charging a tariff of Rs. 4.00 per unit instead of Rs. 2.50 per unit for supply of power to its consumers in JIP from April 2016 onwards.
54. We fail to understand that once the issue was under examination by the State Commission, the RIUS should not have compromised with JSPL, and once settled for an agreement, it cannot be considered to be arrived at under threat.
55. The action by the State Commission can also be questioned here regarding its lethargic response in the matter and allowing the high handedness, if any, by the distribution licensee.
56. In response to State Commission's notice dated 13.04.2016, JSPL submitted its report before the State Commission on 25.04.2016, stating that:
Page 43 of 70Judgment in A.NOs. 72 & 100 of 2016
(i) The failure to supply power to its consumers in JIP was due to non-approval of power procurement by JSPL from an alternate source.
(ii) Vide its letter dated 02.03.2015, the State Commission had also rejected JSPL's request for procurement of power through competitive bidding.
(iii) JSPL has been advised not to make any comments or submissions in relation to the appeals pending before this Tribunal.
(iv) Upon being approached by RIUS, the issues have been resolved and the power supply to entire JIP has been commenced from 22.04.2016.
57. It is difficult to understand, the role of Appellant on one side and the role of the RIUS, the industrial consumer association on the other hand and the statutory role played by the State Commission. We find it appropriate to add here that all the three contributed to this situation where multiple petitions, cross petitions are filed at every level.
58. Accordingly, this Tribunal vide interlocutory order dated 11.06.2021 made certain observations and issued directions for compliance:
Order dated 11.06.2021 "1. This appeal, being no. 100 of 2016, filed by Jindal Steel & Power Limited (JSPL) challenging the Order dated 23.12.2014 passed Chhattisgarh State Electricity Regulatory Commission (CSERC) has been pending since 2016. It is stated that another appeal, being no. 72 of 2016, is also connected and is similarly pending. The order primarily challenged by the first Page 44 of 70 Judgment in A.NOs. 72 & 100 of 2016 said appeal is the Tariff Order passed by CSERC determining the tariff of Rs 2.50/kWh which is expected to be charged by JSPL from its consumers which include the members of Raigarh Ispat Udyog Sangh (RIUS), the first respondent in the appeal. The appeal is presently listed on 10.12.2021, it having been adjourned over the past several dates of hearing primarily by the Court Master under the administrative instructions due to limited working of this Tribunal in the pandemic conditions, neither side in the said matter(s) having moved this Tribunal for urgent hearing all along.
2. When this Vacation Bench assembled today to hear the matters listed for the day, learned counsel, Mr. Vishrov Mukherjee, representing RIUS (first respondent) mentioned the matter requesting for his applications (IA no. 903 and 904 of 2021) to be taken up for urgent hearing today, his submission being that on account of certain dispute between the parties, the members of RIUS (an association) were facing threat of disconnection of the electricity supply by the appellant JSPL (distribution licensee). Having heard the learned counsel and Ms. Divya Chaturvedi who appeared, on advance notice, on behalf of the appellant (non-applicant), we directed that this matter shall be taken up at the end of the board and that it be included in the supplementary list that may be issued.
3. Before we took up the matter at the end of the board, some of the relevant papers relating to the captioned matter have been placed before us through One Drive in the form of digital documents.Page 45 of 70
Judgment in A.NOs. 72 & 100 of 2016
4. It needs to be briefly noted at this stage that the appellant is the distribution licensee for a limited area developed as OP Jindal Industrial Park in Raigarh, Chhattisgarh, the members of RIUS having set up their respective industrial units in the geographical area where the appellant, as the distribution licensee, is obliged to serve and cater to them by providing electricity. The issue of tariff, as mentioned earlier, had come up before the State Commission and it had determined the same at Rs. 2.50/kWh w.e.f. 01.01.2015, the counsel on either side being not clear as to the control period to which the said order pertained.
5. The appellant, the distribution licensee, on whose petition the said tariff had been determined, was aggrieved it claiming a higher level of tariff. It, thus, filed the present appeal (A.no. 100 of 2016). The other appeal (A.no. 72 of 2016) is stated to be pertaining to the order determining generation tariff.
6. While the appeal was pending, the distribution licensee (i.e. the appellant herein) and the consumers (i.e. the members of first respondent RIUS) are stated to have entered into a compromise on 30.06.2018. it appears that by that time several other litigations had been initiated, this including Writ Petition (C) No. 1595 of 2018 with a batch of Writ Petitions bearing nos. 921, 940 & 1002 of 2016, all before High Court of Chhattisgarh at Bilaspur.
7. By the Agreement dated 30.06.2018, the parties i.e. the distribution licensee (appellant) and the aforesaid consumers (RIUS) agreed between themselves to waive the rights Page 46 of 70 Judgment in A.NOs. 72 & 100 of 2016 declared in their favour or against them by the State Commission, this Tribunal or the High Court, in relation to supply of electricity, any time in the past and further confirmed not to assert for enforcement of any such judgment/order/direction/decision. It appears that by the said agreement, the said parties also inter-alia decided to seek withdrawal of the cases, amongst others, the two appeals mentioned above pending before this Tribunal and the Writ Petitions referred to earlier. By the said agreement, the parties also agreed and decided that the tariff payable by the said consumers shall be as agreed upon and as reflected in the Term Sheet which was made part of the agreement, it being the published tariff of Chhattisgarh State Power Distribution Corporation Limited (CSPDCL) applicable for similar industrial consumers less 25% (on demand and normal energy charge) subject to a minimum tariff of Rs. 4.00 per kWh after all adjustments.
8. The parties i.e. distribution licensee and the group of consumers (the applicant herein) moved the Chhattisgarh High Court by an Interlocutory Application (IA) which was considered on 24.07.2018. A copy of the Order passed by the High Court of Chhattisgarh by learned Single Judge on that date reveals that the State Commission had made a submission that the agreement is "contrary to law". The High Court declined to enter into that controversy and treated the writ petition as closed, the lis brought before it having come to an end as a result of the compromise placed before it. Noticeably, the High Court did not examine the legality or Page 47 of 70 Judgment in A.NOs. 72 & 100 of 2016 otherwise of the said agreement dated 30.06.2018 nor made any comment thereupon.
9. The CSERC challenged the aforesaid order of the learned Single Judge by Writ Appeal No. 758 of 2018 which was not entertained by the Division Bench and disposed of on 31.10.2018. It appears that the State Commission then brought the matter to the Hon'ble Supreme Court by SLP (C) No. 7553 of 2019. While issuing notice on the said SLP, by Order dated 01.04.2019, the Hon'ble Supreme Court directed that in the meantime this Tribunal hear and decide the pending IAs in the two appeals, as mentioned earlier, the date of hearing then being 09.04.2019.
10. On our query, learned counsel on both sides submitted that the two appeals (Appeal nos. 72 of 2016 and 100 of 2016) were at the relevant point of time pending before the Coordinate Bench (Court-I) and that the hearing could not took place because the Technical Member then part of that Bench retired and, thereafter, the matters got dislocated and though allocated to this Bench (Court-II), have remained pending due to the pandemic condition mentioned earlier.
11. The submission of the learned counsel for the applicant/first respondent (RIUS), as indeed of the appellant, have brought out that the parties herein have on their own regulated the business of sale and purchase of electricity in terms of the tariff they had agreed upon by the compromise entered into on 30.06.2018. it has been submitted that a joint application for withdrawal of this appeal connected with appeal Page 48 of 70 Judgment in A.NOs. 72 & 100 of 2016 no. 72 of 2016 was moved in terms of the agreement dated 30.06.2018 but then it was withdrawn primarily because the first respondent opted out, its submission being that uninterrupted power supply was not ensured. On the other hand, it is the submission of the appellant that the joint application was withdrawn because the State Commission was opposing it.
12. Be that as it may, the fact remains that the appeal at hand is still pending with the connected appeal.
13. The current controversy leading to the prayer for urgent listing and interim relief has come up against the backdrop pleaded in the application for directions as under:
"2. RIUS is filing the present application for interlocutory orders as JSPL has terminated supply of power to several members of RIUS and JSPL is proposing to terminate supply to the other consumers as well, which will cause irreparable injury to such members of RIUS. JSPL has already:-
(a) Issued illegal disconnection notices issued by JSPL to members of RIUS (dated 16.04.2021), demanding charges which are over and above the tariff fixed by the Ld. Chhattisgarh State Electricity Regulatory Commission ("Ld CSERC") and the tariff agreed between RIUS and JSPL in the Agreement dated 30.06.2018; and
(b) Addressed subsequent written and oral instructions issued to certain consumers to shut down their High Tension (HT) power supply.Page 49 of 70
Judgment in A.NOs. 72 & 100 of 2016
3. Any disconnection of power supply by JSPL will be in violation of: (a) Directions of Ld. CSERC in the Order dated 30.05.2018 in Petition No. 4/2017(M), wherein JSPL was directed to ensure uninterrupted continuous power supply to the consumers of JIP. This Order of Ld. CSERC was never challenged by JSPL and the same has attained finality. (b) Terms of the Agreement dated 30.06.2018 signed by JSPL and RIUS [Third Recital read with Article 8]. ..."
14. The prayer in the application is set out as under:
"22. In view of the aforesaid submission, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to:
(a) Direct Appellant to not disconnect the High Tension power supply to the consumers in Jindal Industrial Park including the members of Raigarh Ispat Udyog Sangh;
(b) Direct Appellant to restore connection and resume supply to units where supply has been interrupted; and
(c) Pass such other Order(s) as this Hon'ble Tribunal may deem just in the facts of the present case."
15. Having heard the learned counsel on both sides and having gone through the limited documents that have been made available for urgent hearing today, we record a prima- facie view that the parties seem to have unauthorizedly engaged themselves in transactions which are possibly and wholly outside the law, they seemingly having usurped the jurisdiction of the Regulatory Commission by entering into the compromise agreement dated 30.06.2018 which, if so done, is Page 50 of 70 Judgment in A.NOs. 72 & 100 of 2016 impermissible. Though, the learned counsel for the appellant submitted that the party she represents is conscious that they are obliged in law to approach the State Commission, the fact remains that as on date nothing is shown to us that the compromise agreement dated 30.06.2018 was ever taken to the State Commission for it to be adopted by the Regulatory Authority.
16. We find that the agreement dated 30.06.2018, even otherwise, was not fully acted upon, illustratively the two appeals at hand having survived, the parties not being inclined to seek withdrawal.
17. The fact remains that the question of tariff determination, as done by the State Commission, is still subject matter of appellate scrutiny by this Tribunal where the matter is pending. The parties did not even approach this Tribunal for its imprimatur - final or interim, over the determination of tariff done by them on their own by the aforesaid agreement, if that was at all permissible in law.
18. The result of the Writ Petition by the Order which was challenged now pending before Hon'ble Supreme Court, cannot come in the way of this Tribunal for examining the conduct of the parties in above light, in as much as the validity or legality of the compromise has not been examined by the Writ Court.
19. Under the regulatory regime, as we presently understand, the tariff determination is the exclusive domain of the Regulatory Commission subject, of course, to appellate Page 51 of 70 Judgment in A.NOs. 72 & 100 of 2016 scrutiny first by us and finally by the Hon'ble Supreme Court. Prima-facie, this function cannot be taken by the parties in their own hands, not the least by a distribution licensee. We presume the obligation to abide by the tariff as determined by the Regulatory Commission is part of the conditions of license given to the distribution licensee. In the facts revealed before us, we would like to have it examined as to whether by entering into the agreement dated 30.06.2018, there has been a breach of the said conditions of distribution license granted in favour of the appellant.
20. Be that as it may, the falling apart of the compromise agreement dated 30.06.2018 entered into by the parties unilaterally, keeping aside the statutory authorities, cannot be allowed to become the subject matter of the appeals at hand wherein the questions of legality and validity of the tariff orders passed by the Commission is to be gone into. If at all, the event mentioned in the applications constitutes a cause of action which has nothing to do with the matter at hand of these appeals.
21. Therefore, while declining any direction of the nature mentioned in the captioned applications, we direct the State Commission to assist us for bringing clarity to the facts. The State Commission, through its Secretary, shall file an explanatory affidavit setting out its position vis-à-vis the compromise agreement dated 30.06.2018, also clarifying as to whether it has been privy to the tariff settled by the parties by the said agreement and whether it has been regulating the business of sale/purchase of electricity, thereby violating the Page 52 of 70 Judgment in A.NOs. 72 & 100 of 2016 tariff determined by the Commission. Similarly, we call upon the appellant (distribution licensee), to also discover on oath supported by all relevant documents the justification in law for the acts indulged in leading to the execution of the Agreement dated 30.06.2018, also giving detailed account of the excess money collected as tariff in terms of the said agreement dated 30.06.2018 over and above the tariff determined by the State Commission.
22. The discovery shall be made by affidavit of a responsible officer of the appellant within four weeks of today. The Commission shall also file its response within the same period.
23. The applications are disposed of accordingly.
59. Accordingly, during the hearing on 28.03.2022 adjourned the matter after hearing the Ld advocates of all sides:
"We have heard learned counsel for the parties further. From the submissions made, there seems to be a possibility of some common ground being found by the parties on their own so as to resolve the inordinately delayed resolution of multiple knots in which the parties seem to have bound themselves, courtesy also some orders of the regulatory commission. The learned counsel propose to come with some possible solutions which must be submitted well in advance, after a consensus emerges, before the next date of hearing."
60. However, the parties failed to arrive at a consensus and therefore, it was decided to hear the matter further for prosecution.
Our Observation and Analysis Page 53 of 70 Judgment in A.NOs. 72 & 100 of 2016
61. The first issue which emerges out of the two captioned Appeals is whether the Appellant is bound to supply power from the Raigarh CPP even if no surplus capacity is available or the surplus capacity available is erratic and fluctuating in nature.
62. It is important to note the Appellant: JSPL obtained the permission, of setting up the JIP under the Industrial Policy of the State Government and supply of power to the industrial consumers of the JIP area, under the provisions of the Indian Electricity Act, 1910. However, with the enactment of the Electricity Act, 2003, JSPL, the Indian Electricity Act, 1910 was repealed.
63. As per the provisions of the Electricity Act, 2003, the distribution licensee, JSPL was required to obtain the necessary Licence for distribution of Electricity from the State Commission under the provisions of section 12, 14, and 15 of the Electricity Act, 2003, and the conditions specified in the Licence shall become binding for the distribution licensee (JSPL in this case).
64. It is, thus, important to note certain relevant conditions specified in the Licence so granted by the State Commission. As part of the application filed by JSPL before the State Commission, it was submitted that:
"The power required by the Units in JIP shall be supplied by JSPL from its power plant at Raigarh------.
[...]
-----
10. Particulars of demand/supply Page 54 of 70 Judgment in A.NOs. 72 & 100 of 2016
(a) Expected demand in area of supply : 400 MVA (300 MW) on full implementation of the Industrial Park.
(b) Source of obtaining power :
i. 120 MVA (90 MW) from Jindal Steel & Power Ltd., Captive Power Plant at Patrapali Village, Ghargoda Tehsil, Raigarh District.
ii. 280 MVA (210 MW) from the proposed 1000 MW capacity power plant of Jindal Power Ltd., Tamnar Village, Ghargoda Tehsil, Raigarh District."
65. Further, one of the conditions as stipulated in the Licence by the State Commission provides that:
"A distribution licensee may procure electricity from any source subject to the terms and conditions of his license and under the regulatory supervision of the Commission. However, the applicant's plea has all through been supply of power from his captive power plant."
66. Further, certain other conditions were incorporated by order dated 29.11.2005, one of such condition was that:
"Existing tariff (Rs. 2.50 per unit) being charged from the industrial consumers in the designated area of JIP shall continue to be charged by JSPL, till the tariff for supply is determined by the State Commission."
67. It is thus, clear that the conditions as stipulated in the MoU have been amended by the conditions as specified in the Licence granted by the State Commission. The Appellant and the Respondent RIUS are Page 55 of 70 Judgment in A.NOs. 72 & 100 of 2016 bound by the provisions of the State Regulations and the Licensing conditions including the Tariff.
68. From the above, it is clear that the Appellant sought permission to supply electricity from two Generating Stations namely existing Raigarh CPP and proposed 1000MW JPL IPP to a capacity of 90 MW and 210 MW without specifying the percentage share of electricity in case load requirement is below 300 MW, however, the State Commission through its order dated 29.09.2005, while granting the Licence has specified that a distribution licensee may procure electricity from any source subject to terms and conditions as specified.
69. Therefore, the State Commission allowed JSPL to procure power from any source subject to terms and conditions of the Licence. It is settled principle of law that any distribution licensee can not be bound by the terms of the Licence to procure electricity from a particular source and also any condition laid down prior to the enactment of Electricity Act, 2003 shall be bad in law if it is inconsistent with the provisions of the Electricity Act, 2003.
70. This Tribunal on 04.10.2007, has held that:
"16. ------ Having obtained the license on the specific condition that it shall apply for determination of tariff, the appellant cannot be allowed to violate the conditions of license. Section 42 of the Act casts a duty on a distribution licensee to supply electricity in accordance with the provisions of the Act."Page 56 of 70
Judgment in A.NOs. 72 & 100 of 2016
71. The Distribution Licensee (JSPL in this case) bound by the provisions of the Act 2003 and the conditions as laid down in the Licence granted by the State Commission. As already mentioned above, the Distribution Licensee can procure power from any source subject to transparent, economic and prudent manner under the legal provisions notified by the State Commission.
72. It may further be noted by the State Commission vide its order dated 27.10.2010 observed that:
"1. ----------The licensee i.e. JSPL has set up the industrial area (JIP) on the basis of understanding with the State Government that industries set up would be supplied surplus power available from their captive generating plant------."
73. From the above, it is seen that the industries shall be supplied with the surplus capacity of the CPP only. Need not to add that any Captive Power Plant is set up by a person to generate electricity primarily for his own use. Further, the Electricity Rules, 2005 mandates that fifty one (51) percent of electricity generated shall be consumed by the captive consumer, therefore, any supply from the Raigarh CPP has to be regulated as per such provisions.
74. The Respondent RIUS submitted that the source of supply of power is already covered under the order dated 29.09.2005 whereby the State Commission granted distribution licence to JSPL. We fail to understand the reasoning given by RIUS as the order by the State Page 57 of 70 Judgment in A.NOs. 72 & 100 of 2016 Commission has clearly mandated differently as quoted in the foregoing paras.
75. Further, the State Commission on 12.06.2014, issued Tariff Order in Petition Nos. 5-8 of 2014 for CSPDCL for FY 2014-15 and final true-up for Previous Years of CSPGCL, CSPTCL, SLDC and CSPDCL, wherein, the State Commission observed that the load curve prepared by SLDC depicts that the injection pattern of the power supplied by JSPL to CSPDCL has wide variation, supply from JSPL is varying frequently and it is unstable / non-firm power. This observation was also noted by this Tribunal while rendering the judgment dated 26.05.2016 in Appeal Nos. 41 of 2015 and 67 of 2015 for the finding that:
"10. (A)
-------
(vii) We are of the considered Opinion that injection pattern of such unstable power supply causes even commercial implications, besides creating disturbance in the demand supply balance."
76. We are of the firm opinion that the Appellant is bound by the provisions of the Act 2003 and the conditions of the Licence as granted by the State Commission. Any provision of the MoU, if it is inconsistent with the provisions of the Act 2003 and the Licencing conditions stands annulled. Therefore, the Appellant shall supply the surplus power from the Raigarh CPP to the extent it is available and is firm power.
77. The second issue which is under dispute is the tariff at which the Licensee i.e. JSPL shall supply the power to the consumers of its supply Page 58 of 70 Judgment in A.NOs. 72 & 100 of 2016 area. There cannot be any dispute that the Appellant and the industrial consumers of JIP signed the Power Purchase Agreement (PPA) in the year 2004 wherein the sale tariff was fixed at Rs. 2.50 per unit. However, the agreement was expired after 5 years.
78. Further, the State Commission vide its order dated 29.11.2005, decided that the existing tariff of Rs. 2.50 per unit shall continue to be charged by JSPL, till the tariff for supply is determined by the State Commission. As such the tariff of Rs. 2.50 was only the provisional tariff, and not the tariff as fixed under the provisions of the Act 2003 (section 61, 62, 63 & 64).
79. Considering that the tariff of Rs 2.50 per unit for Raigarh CPP was mutually agreed tariff between the Appellant and the industrial consumers and as decided under the PPA signed amongst them with validity for 5 years, such tariff cannot be declared as tariff determined or adopted under the provisions of the Electricity Act, 2003 and the State Commission should have exercise its powers for the determination of tariff under the provisions of the relevant Regulations. However, as noted, the Appellant failed to provide information as sought by the State Commission including the audited segregated accounts.
80. In case of failure of the Appellant, the State Commission can always discover the tariff under its regulatory powers by examining the technology, cost of equipment, life of the plants etc and declaring the normative costs to arrive at the most optimised solution which could have been in the benefit of the consumers. The State Commission in its order dated 05.11.2008 in Petition No. 23 of 2008 pertaining to determination of tariff for JSPL for FY 2008-09, held that:
Page 59 of 70Judgment in A.NOs. 72 & 100 of 2016 "3. ... The Commission is inclined to agree with the request of the applicant in view of the following:
(i) Despite a lapse of three months' time from the date of application, the Commission is not in a position to proceed with the task of determine ARR and hence tariff on account of the application being incomplete.
---------
(iii) At present, the consumers of the industrial park of the licensee are being supplied electricity @ Rs.2.50 per unit as per the agreements in force, some of which pertain to the period prior to the distribution licence was granted to the licensee. The present tariff is less than the Board's industrial tariff applicable for the similar type of consumers. Further, no representation has been received from any consumer of licensee regarding the said tariff. The Commission, therefore, would not like to interfere with subsisting agreements between consumers and the licensee.
81. Even after making such observations, the State Commission continued with its failure in determining the tariff as vested to it under the Statutory powers. The determination of tariff which was mutually agreed for 5 years cannot be continued and adopted for 25 years. Further, in case of non-compliance by the Appellant, the State Commission should have reviewed the grant of licence section 19 (Revocation of licence) of the Act, providing that:
Page 60 of 70Judgment in A.NOs. 72 & 100 of 2016 "19. (1) If the Appropriate Commission, after making an enquiry, is satisfied that public interest so requires, it may revoke a licence in any of the following cases, namely: -
(a) where the licensee, in the opinion of the Appropriate Commission, makes wilful and prolonged default in doing anything required of him by or under this Act or the rules or regulations made thereunder;"
82. This Tribunal on 04.10.2007,has held that:
"16. At the outset, we would like to point out that so far JSPL has not filed any application for determination of its tariff as directed by the CSERC. The appellant, JSPL had set up the plea that it is not possible to segregate its accounts for distribution business and steel business. The contention was rightly rejected by the CSERC. It is not denied that it was one of the terms of the grant of distribution license to JSPL that it shall file an application for determination of tariff. Having obtained the license on the specific condition that it shall apply for determination of tariff, the appellant cannot be allowed to violate the conditions of license. Section 42 of the Act casts a duty on a distribution licensee to supply electricity in accordance with the provisions of the Act."
83. However, the above issue is settled now as Appellant has submitted that they have segregated the accounts of the Raigarh CPP from the main business accounts and submitted the information before the State Commission.
Page 61 of 70Judgment in A.NOs. 72 & 100 of 2016
84. We find the role of the State Commission as totally irrational and unjustified in performing their statutory duties. The directions issued by this Tribunal have not been complied with in true spirit.
85. Further this Tribunal vide order dated 04.07.2007 has held that :
"16.
---------
Section 45 of the Act ordains that the price to be charged by a distribution licensee for supply of electricity by it in pursuance of Section 43 of the Act shall be in accordance with such tariff as is fixed from time to time by the Commission and conditions of his license. Therefore, distribution licensee is under a statutory obligation to supply electricity in consonance with the following two conditions:-
i) supply of energy shall be as per the tariff fixed;
ii) supply of energy shall be in accordance with the conditions of distribution license."
86. It is thus clear that the tariff at which electricity can be supplied to a consumer shall be the tariff as determined by the State Commission under the provisions of the Act 2003. It is the statutory duty of the State Commission to ensure it. Section 61 of the Act 2003 provides that the State Commission shall be guided by the economic principle of safeguarding the interest of the consumer and at the same time, recovery of the cost of electricity in a reasonable manner. While granting licence the State Commission noted that:
"16. -------Page 62 of 70
Judgment in A.NOs. 72 & 100 of 2016 More importantly, there are as many. as 18 (now 24) industries, most of them power intensive which are being supplied power by him through a long-term agreement for 5 years and at ·a rate which is much cheaper than the rate of the CSEB for similar industries (at Rs.2.50 per unit 'as' against the CSEB's average rate of Rs.3.37 per unit). If a distribution license is denied today these consumers become unviable, as has been pleaded at least by four consumers (A-15 to 18), and will have to close down their industries...."
87. From the above, the tariff of Rs. 2.50 was fixed as provisional tariff in the benefit of the consumers, however, it is not relevant in the present scenario, as the agreement signed prescribing such tariff has since expired.
88. We are of the firm opinion that the State Commission should immediately determine the tariff of both the captive plants i.e. Raigarh CPP and Dongamahua CPP either through the information furnished by the Appellant or through the methodology adopted for deciding the Generic Tariff in case of failure of the Appellant in furnishing the information.
89. At the same time, in the process of determination of tariff, the State Commission shall endeavour to ensure safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner.
90. The other issue i.e. the third issue which emerges out from these Appeals is the determination of surplus capacity available from Raigarh Page 63 of 70 Judgment in A.NOs. 72 & 100 of 2016 CPP and its pattern. This Tribunal vide judgment dated 07.03.2014, directed the State Commission to determine the surplus capacity and its pattern, as reproduced here under:
"The State Commission should have examined the pattern of surplus power available from the captive power plant after meeting the requirement of captive load of the Steel Plant and load pattern in the licensed area of Jindal Steel and should have considered part of energy supplied in the licensed area from the Captive Power Plant of Jindal Steel. Unfortunately, this has not been done. Therefore, we remand the matter with directions to the State Commission to carry out the exercise Appeal No.89 of 2012 Page 23 of 39 and evaluate the energy from the Captive Power Plant that should have been booked to distribution business of Jindal Steel at the cost of the generation tariff of Jindal Steel's Captive Power Plant. ------------
The State Commission should also facilitate increasing the contract demand of Jindal Steel from 1 MW to 80 MW from CSPDCL as sought by Jindal Steel for meeting the increased load of Jindal Steel. This will help in availability of continuous and sustainable supply from the Captive Power Plant to Jindal Industrial Park in future."
91. We felt that it is important to take a note of it as the State Commission has totally failed in complying with our directions for examining the quantum and pattern of surplus power availability from the Raigarh CPP owned by the Appellant. There cannot be any dispute that the opinion of this Tribunal was reiterated time and again, a fact which Page 64 of 70 Judgment in A.NOs. 72 & 100 of 2016 effects the present Appeal also however, the State Commission is still grappling to find the information. It is one of the major issues in dispute i.e. the pattern and quantum of surplus power available from Raigarh CPP.
92. The State Commission should have obtained the information directly from the SLDC as any power generated by a CPP and its consumption by the captive user is precisely monitored in compliance with the provisions of the Electricity Rules, 2005, for determining the captive status of a power plant.
93. Even after a gap of eight years, the State Commission is still struggling to get this information, it is beyond our understanding even to the fact that the SLDC submitted information for examining the pattern of surplus power before the State Commission, on which the State Commission made the following observation vide its order dated 12.06.2014:
"Commission's View:
The load curve prepared by the SLDC shows that the injection pattern of the power supplied by JSPL to CSPDCL has wide variation. Supply from JSPL is changing frequently and it is unstable / non-firm power. To check sanctity of the fact, the Commission has done detailed analysis of the power supplied by JSPL.
In the judgment passed by Hon'ble APTEL in the Appeal No.89 9f 2012 dated 07th March 2014, JSPL itself has submitted that surplus power at different times of the day was dependent on the actual computation of steel plant which varied frequently....Page 65 of 70
Judgment in A.NOs. 72 & 100 of 2016 It is amply clear that power supplied by JSPL to CSPDCL is fluctuating in nature. In such a case, it is very difficult for CSPDCL to manage its load-generation balance and some time it may have to over draw/ under draw from grid for which heavy penalty is required to be paid. The CSPDCL has signed power purchase agreement with JSPL for RTC power supply and not for non-firm power. It is also seen that CSPDCL has not taken any corrective steps to overcome this situation and continued purchasing such power of poor quality. The Commission takes serious note on the same and directs CSPDCL for not to purchase unstable / non-firm power which creates disturbance in demand supply balance."
94. From the above order, it is clear that the SLDC has maintained the data bank regarding the availability of power from the Raigarh CPP, Further, the power supplied by the Raigarh CPP to CSPDCL is fluctuating in nature resulting into grid disturbance attracting high penalties, as such it is beyond doubt that such power cannot be sourced by JSPL for its distribution business, supplying power to its consumers in the distribution area.
95. The State Commission's order dated 12.06.2014 was upheld by this Tribunal vide Judgment dated 26.05.2016 in Appeal Nos. 41 of 2015 and 67 of 2015, noting therein as under:
"10. (A) ...
(vii) We are of the considered Opinion that injection pattern of such unstable power supply causes even commercial implications, besides creating disturbance in the demand supply balance."Page 66 of 70
Judgment in A.NOs. 72 & 100 of 2016
96. The State Commission also failed to submit the reason for the delay in increasing the contract demand from 1 MW to 80 MW as requested by the Appellant, which could have resulted into firm power to be supplied for distribution business.
97. From the observations of the State Commission, it is clear that the surplus capacity of the Raigarh CPP, if any, is fluctuating/ intermittent in nature and after observing the State Commission's observation, this Tribunal observed such supply causes commercial implications, besides creating disturbance in the demand supply balance.
98. The State Grid, to which the Raigarh CPP and the distribution & transmission system of the Appellant are connected, is controlled and operated by the SLDC, Chhattisgarh. Further, complete and precise data in respect of any CPP connected to the State Grid is obtained by the SLDC and the State Distribution Licensee in a real time mode of 15 minutes block period. It cannot be denied that, if, such an accurate measurement is available, the State Commission cannot obtain such an information from the concern Utilities.
99. Therefore, the State Commission ought to have determined the quantum and pattern of the surplus capacity, if found to be erratic / fluctuating as such power cannot be a supply source for the distribution business.
100. We are again directing the State Commission to determine the surplus capacity as available from the Appellant's CPP in a real time mode along with its pattern immediately and analyse it whether it can be supplied to the industrial consumers.
Page 67 of 70Judgment in A.NOs. 72 & 100 of 2016
101. It is sheer failure on the part of the State Commission that it has failed in obtaining the said information once it has not been provided by the Appellant.
102. Further, the following information as sought by the State Commission should and must have been available with the State Utilities and /or the State Commission:
(a) Unit wise installed capacity of CPP as on 01.04.2014 along with COD.
(b) Daily generation in kWh by CPP from FY 2010-11 onwards.
(c) Electricity consumed in kWh (daily) by captive loads from FY 2010 onwards.
(d) Details of electricity sold (daily) in kWh from tits CPP from FY 2010-11 to other then consumer at JIP.
(e) Total electricity consumed (daily) in kWh in JIP from FY 2010-11.
103. We are not convinced and satisfied that the State Commission could not proceed in tariff determination/ examining the surplus capacity, in the absence of such information as not provided by the Appellant.
104. The other issue which remains unresolved is the mutually agreed tariff for the supply of the electricity by JSPL to the consumers of JIPL under the directions and approval of the High Court of Chhattisgarh. As quoted in the foregoing paragraphs, the High Court has directed that:
"It is observed that, the petitioner as offered shall be obliged to pay the electricity charges @ Rs.4.20 per unit, which would be Page 68 of 70 Judgment in A.NOs. 72 & 100 of 2016 subject to the final adjudication before the appellate authority. It is further observed that Jindal Steel and Power Limited be entitled to supply the electricity to the petitioner from Dongamauha power plant without prejudice to their right. It is expected that restoration of power shall be done expeditiously as possible."
105. At this stage, we are of the opinion that the directions as rendered, including the tariff provisioned, by the High Court shall continue to be in place till such the time, the tariff is determined by the State Commission. Further, opined that the tariff so determined or fixed, under the directions of the High Court, shall be considered as final during the period of its applicability without prejudiced to the rights of the parties.
SUMMARY OF OUR FINDINGS:
106. The State Commission is directed to immediately:
i. determine the available surplus capacity and its pattern; ii. carry out technical analysis for supply of surplus power for the distribution business from the Raigarh CPP and Dongamahua CPP;
iii. allow JSPL to procure required quantum of electricity through competitive bidding for long term; iv. determine the tariff for the Distribution Licensee i.e. JSPL from the FY 2011-12, on the basis of already available data and data further furnished by JSPL or otherwise gathered suo moto by the Commission.
107. The mutually agreed tariff fixed under the directions of the High Court shall continue to be in force till the tariff is determined by the State Page 69 of 70 Judgment in A.NOs. 72 & 100 of 2016 Commission, and will apply subject to modification / directions, if any, by the superior court.
ORDER For the foregoing reasons as stated above, we are of the considered view that the present Appeals i.e., Appeal no. 72 of 2016 and Appeal no. 100 of 2016 have merit and are allowed.
The order dated 21.01.2016 in Petition no. 47/2015(M), order dated 01.10.2015 in (Review) Petition No. 7/2015(M), and the Tariff Order dated 23.12.2014 passed in Petition No. 12/2014(T) passed by the Chhattisgarh State Electricity Regulatory Commission are set aside with the direction to pass fresh and reasoned orders in a time bound manner, but not later than four months from the date of this judgment.
In view of the disposal of the Appeals, the reliefs sought in the pending IAs, if any, do not survive for consideration and accordingly stand disposed of.
PRONOUNCED IN THE VIRTUAL COURT THROUGH VIDEO CONFERENCING ON THIS 06th DAY OF MAY, 2022.
(Sandesh Kumar Sharma) (Justice R.K. Gauba)
Technical Member Officiating Chairperson
REPORTABLE / NON-REPORTABLE
pr/mkj
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