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1.10 The Commission did not agree to the request of the Appellant that the demand charges in case of Biomass projects supplying to the HT consumers (who are also the consumers of CSEB) should be pro-rata shared by the Biomass developers and CSEB.

1.11 Biomass Power Developers' request that exchange of power between CSEB and Biomass projects may be billed monthly after netting the import and export of power. This request did not find any mention in the Tariff Order.

1.12 The Tariff Order prescribed that in case of availment of start-up power by developers from the grid the demand charge on the contract demand applicable to HV 6 category of Tariff would be reduced to 50 per cent of the existing charge with no condition of minimum monthly guaranteed consumption.

6. State of Chhattisgarh is endowed with abundant biomass, mainly rice husk and woody biomass from regeneration plantation corps, which can be used for generation of electricity. Based on 2004-2005 data, the total availability of rice-husk in the State is estimated to be about 12 lakh tons per year and is considered adequate to generate 280 mW of power in the State and also the total forest area being 4,746 sq. km, the availability of woody biomass is considered substantial.

7. Pursuant to the policy of GoC, the CREDA, the nodal agency for the development of non-conventional energy sources in the state, has promoted 29 developers with aggregate capacity of 280 mW based on biomass fuel. The First Appellant namely, Chhattisgarh Biomass energy Development Association (CBEDA for short) is an association of these 29 developers. The second to fifth Appellants are the promoters of biomass-based power plants at different locations in the State of Chhattisgarh and have entered into Power Purchase and Wheeling Agreements with CSEB. The agreements provides for 3 per cent of the energy fed into the grid as charges towards wheeling. The second Appellant (i.e. KVK Bio Energy Pvt. Ltd) the promoter of 15 mW biomass power plant has entered into a Power Purchase and Wheeling agreement with CSEB on 16th September, 2003. While the third Appellant (i.e. ISA Power (P) Ltd.) and fifth Appellant (i.e. Ecofren Power and Projects Ltd) have entered into Power Purchase & Wheeling agreements with CSEB on 30th July, 2004, the fourth Appellant (i.e. Sudha Agro Oils and Chemical Industries Ltd.) has signed the similar agreement on 28th December, 2004.

(iv) The forecast for demand and availability of Power from 2004-2005 to 2011-12 projected by CSEB indicate a net deficit of 289 mW in meeting the peak demand by 2011-12. The additional power to meet the current requirement being acquired from outside the State through traders such as PTC, is at much higher cost than being offered to Biomass plants (Appellants have claimed that average purchase price from PTC etc. is at the rate of Rs. 3.30/kWh). Further, CEA's report on "Operation Norms for Biomass based plants" at para 7 states that "the ASCI (Administrative Staff College of India) has quantified the socio-economic impact of biomass power generation. The same has been estimated as 114.3/kWh for Andhra Pradesh. The report states that such impacts are to be considered while comparing the biomass power generation with Conventional generation". A similar study to ascertain positive pricing bias in favour of Biomass power generation for the States of Chhattisgarh on account of saving of socio-economic cost may be commissioned. This however, should have no affect on the rationalizing of the promotional and fiscal incentives to encourage investments in the sector of non-conventional sources of energy.
(f) The aforesaid illustrates that while deciding the various parameters governing the tariff, a continuous effort by the different authorities/agencies, is being made to make energy prices from non-conventional sources of energy to compete with that of conventional sources of energy. It is premature to be done at this stage of biomass power development and is violative of the letter and spirit of the Act and the National Electricity Plan (NEP).

12. We have perused the CEA's report on "Operations Norms for biomass based power plants" dated September, 2005, prepared by a Technical Expert Committee with representatives from State utilities and Equipment manufacturers. The norms are based on actual operation data of plants for 3 years (from January, 2002 to December, 2004) and site related conditions like ambient conditions, fuel quality, equipment and technology specific factors etc. It covered the plants located in Sates of Tamil Nadu, Karnataka, Andhra Pradesh, Rajasthan and Chhattisgarh. We find that the report has taken into account the guidelines issued by MNES to State Governments in 1994-95; considered the Andhra Pradesh Regulatory Commission's (APERC) orders dated 20th June, 2001 and 20th March, 2004 on Non-conventional Energy Sources' Projects; held discussions with manufacturers of plant-equipment (M/s Thermax; BHEL, Triveni); consultants (M/s Avant Grade), ASCI Hyderabad and Indian Renewable Energy Development Agency (IREDA), etc. and had made visits to the selected plants before recommending norms for biomass-based power plants. The approach adopted is fairly scientific and will promote generation of electricity from biomass. As already noted, it is the mandate of the Act of 2003 more particularly Section 86(1)(e) of the Act of 2003 read with Section 61(h) thereof and Preamble thereto and the various policy guidelines to promote generation of electricity from renewable sources of energy including biomass. The appropriate Commission is bound to give effect to the statutory direction of the Act of 2003 to promote generation of electricity from renewable sources of energy. We find that this spirit of legislation is being defeated while regulating electricity purchase and procurement process of distribution Licensees including the price at which the electricity is procured from the generating companies using renewable sources of energy, including biomass. Appropriate Commission is also directed to notify a set of Regulations specifying terms and conditions for the Tariff determination of Non-Conventional Sources in compliance to the Section 61 of Electricity Act, 2003.