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6.4.2010 issued directions under Section 11 of 2003 Act to all the Biomass based generators in the state to supply Electricity to the grid at a 'Realistic Tariff' of Rs 5 per unit. Accordingly, the Appellant restarted generation and fed power in to the Grid during the period between April 2010 and June 2010 i.e. during imposition of State Government's Order under Section 11 of the 2003 Act. The generating plant was again shut down in July 2010.

VII. In the mean time, the Appellant filed a petition before the State Commission seeking amendment to PPA dated 4.4.2002 and Supplemental PPA dated 27.2.2006 and prayed for fixing tariff for electricity at generated by its plant Rs 5.60 per unit as the cost of Biomass fuel had increased enormously and it had become Judgment in Appeal No 35 of 2011 practically impossible for the Biomass Power Plants to generate power with the existing tariff.

II. The rate negotiated by the Appellant with the Respondent -1 worked out to Rs.3.348 for 6 MW and Rs.3.07 for the remaining 1.5 MW for the year 2010-11. This rate has become unworkable and uneconomical in view of the steep increase in the cost of production of electricity. The cost of biomass has gone up abnormally because of the scarcity of the material and competition among the biomass power plants.

III. The other similarly situated biomass generators in the State are paid at a higher tariff by Distribution Licensees. The table submitted before the Tribunal reveals that the higher rates at which the other Biomass based Generating Companies are being paid for the electricity being supplied to Distribution Licensees in the State, whereas the Appellant is being given the lesser tariff.

"1 Karnataka State has been reeling under acute power shortage for some time. The state has faced severe power shortage in the year 2008-09 as there was huge gap between demand -supply in the State. To protect the interest of the consumers, Government decided to purchase power from various sources available including from Biomass Projects units in 2008-09 after negotiations held with Biomass Projects firms for working out a cost, and the realistic rate at Rs 5.02 per unit was arrived. Accordingly, the Government Order read at (1) above (GO No EN 65 2008 dated 27.01.2009}, it was decided to purchase power round the clock from Biomass Projects Units, which were supplying power under Power Purchase Agreement was subject to approval of KERC and all State ESCOMs to submit a Memorandum on the circumstances warranting higher price and need of State to procure more power before KERC 2 The State has faced a severe power deficit situation even in 2009-10 and adverse energy deficit is likely to continue till june 2010. In order to overcome the severe demand supply gap for the Judgment in Appeal No 35 of 2011 coming summer months, action has been taken to purchase power from ... Biomass and other sources, keeping in view the public interest. 
    Considering Biomass per      Cost per KWh in Rs
           MT in Rs
             1280                       3.66
             1500                       3.95
             1800                       4.34
             2000                       4.60
             2200                       4.86
             2400                       4.99


  Accordingly this order
            GOVERNMENT ORDER NO. EN 29 EEB 2010
                   Bangalore Dated 6th April 2010
1 Under the circumstances explained above, Government are pleased to accord approval to purchase power as short term arrangement for the period from April and 2010 from Biomass projects units at Rs 5.00 (Rs Five only) per kWh 2 Payment of this rate to Biomass projects units, which are supplying the above power under Power Purchase Agreement is subject to approval by the Karnataka Electricity regulatory Commission, with reference to the applications filed by Electricity Supply Companies (ESCOMs) in this behalf Judgment in Appeal No 35 of 2011 3 For biomass Projects Units without Power Purchase Agreement, the above rate is provisional and is subject to approval of KERC.