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It is necessary here to mention that parallel operation is not new concept or activity in regulating electricity energy with its desired frequency, because, earlier, i.e. prior to constitution of State Regulatory Authorities under Section 17 of the Electricity Regulatory Commission Act, 1998 [hereafter to be referred to as ?Sthe ERC Act??] by issuing Commercial Circular, the GEB was recovering some charge/amount under the head of ?SParallel Operation Charges?? in respect of captive power plants and by issuing Commercial Circular No. 706 dated 28th January 2000, the GEB had attempted to revise that rate and while evaluating commercial Circular No. 706, the GERC held that charge, if is levied as Parallel Operation Charge, then, the same would fall in the category of ?Stariff??. Therefore, it is very clear that when Parallel Operation Charge is part of industrial tariff in respect of CPP and GEB has no jurisdiction to levy or alter without approval of the Commission, the subject would fall within the domain of State Electricity Regulatory Authority, i.e. GERC. Here, it is relevant to note that the learned counsel appearing for the petitioners have submitted that their idea was to defeat the Commercial Circular No. 407 and as they were successful party before the GERC, there was no scope for them to challenge the finding by way of an appeal that certain observations were against the parties who were resisting and challenging the validity of the Circular on various grounds including the jurisdiction of GERC. Thus, the moment, the CPP lays its claim for parallel operation and infrastructure of generation, transmission and distribution created by GEB, the GEB was to recover some amount as Parallel Operation Charges. Though the Commission, while dealing with Circular No. 706 has observed that: ?SCommission is of the view that for such claim, the GEB is well within its right to charge POC??, is an observation which will have some bearing on the merit of this matter. But the petitioners have hammered that it is their privilege to point out that GERC or State Electricity Regulatory Authorities cannot assume jurisdiction to deal with Parallel Operation Charges unless the GERC is specifically conferred with the jurisdiction.

?SWe have already examined above the nature of parallel operation charges. These charges should not be confused with the demand charges as has been done in many submissions of CPPs. Demand charges are charged for the demand of electricity supply contracted and can also be charged from those CPPs who have not opted for parallel operation. Therefore, those wanting to operate parallel must be necessarily distinguished from those who have not opted for the same. As mentioned earlier, CPPs opt for parallel operation to seek safety, security and comfort of a larger GEB system and the system has to make investment to provide on a portion of infrastructure of generation, transmission and distribution created by the GEB. The Commission is of the view that for such a claim the GEB is well within its rights to charge parallel operation charges.??

It is denied by the respondent GETCO that it has a right to recover or is recovering charges for services provided in the form of transmission of electricity. GETCO had already recovered costs and expenses of the system by various other means including through demand charges, connectivity charges, penalty charges, interest, if leviable under all these charges and, therefore, not entitled to claim any parallel operation charge or grid support charge is the misconceived argument as submitted by Mr. Ramachandran. GETCO is supposed to get revenue requirement full from the tariff and the charges to be collected from various users and beneficiaries but the POC is not in addition to its revenue requirement. It is the duty of GETCO to see that revenue requirements are appropriately apportioned between all users and beneficiaries of the system and CPPs operating parallel to grid are getting something more in the form of service and, therefore, they are required to pay charge in proportion to meet ARR. The Court cannot look into the point whether GETCO is incurring any extra cost or expenses for providing grid support. The entire grid system has been established essentially for the general body of consumers. General body of consumers has paid for actual cost of the system. The petitioners, as CPP should pay for the benefit which they are deriving from the system operating parallel to grid support provided by GETCO itself, which puts the petitioners to a position so that they can avoid certain costs or they would have otherwise incurred. They have been asked to pay such avoided cost in the form of POC.

There is no dispute that the respondent in its affidavit once has stated on oath that POC is not tariff. But Mr. Ramachandran has submitted that earlier stand taken by the respondent has been revoked by making retraction from that stand. It is contended that POC falls in the category of tariff that can be levied as tariff under the head of ?Stransmission charges??. Grid support is activity related to transmission. Who will recover, how the same would be recovered, at what rate it would be recovered and whether such charges should be recovered annually or they should be the charges related to actual use etc. are questions which are still open. In the order dated 31st August, 2008 quashing the Commercial Circular No. 706, GERC has amply clarified that the nature of parallel operation charge has been examined and therefore only, the GERC reached to a conclusion that GEB unilaterally could not have imposed or enhanced such charge. Parallel operation charge is independent charge or levy. There should not be any confusion between the POC and demand charges. Demand charges are charged for demand of electricity supply contracted and can also be charged from those CPPs who have opted for parallel operation. It is emerging from the record that earlier, while computing parallel operation charge, demand charge was taken as a base and the rate was fixed at 7.5% in the year 1998. Status of CPPs operating parallel to grid is distinct from the CPPs who opt to operate in total isolation. The argument advanced on behalf of the petitioners that, as per the scheme of the Act, erstwhile GEB could not have refused the desire of the petitioners to permit them to operate their CPPs parallel to grid and it would not keep them in the category of the CPPs operating in complete isolation, is accepted. Statutory right to operate CPP parallel to grid flowing from the Statute if automatically confers certain privilege or advantage, then, element of that advantage can be said to be a service. Thus, CPPs opting for parallel operation can be said to be a plant seeking safety if not security, at least a confort of a larger system. Now, this larger system is able to establish that to offer advantage of safety or security or comfort to the CPPs operating parallel, the respondent has spent or is incurring cost on this count, then, the reasonable contribution to meet with such expenses can be asked for. Under which head this amount can be asked for has remained a question. Adhra Pradesh High Court has held that Andhra Pradesh Electricity Regulatory Authority had no jurisdiction to decide or determine any tariff/rate of levy unless specifically provided by law. On careful reading of the decision of Andhra Pradesh High Court referred to herein above, it is clear that it is a detailed judgment dealing with merits and legal issues as also technical issues involved in the matter as well as justification for raising such demand from CPPs who have helped the State by generating power of their own under the liberalized policy of the country being power deficit country.