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7. In consonance with the aforesaid decision, during June-July, 1997 liquid fuel (Naptha) firing facility was installed in Kawas GPS. In view of the commissioning of the liquid fuel firing facility at Kawas, it was considered appropriate to divert gas from Kawas GPS to Gandhar GPS and to operate some or all the gas turbines at Kawas GPS using liquid fuel in order to maximize the generation of power from these two stations.

8. In the 107th Western Regional Electricity Board's meeting held on 18th April, 1998, the beneficiaries consented to the proposal of the NTPC to link Kawas and Gandhar with HBJ pipeline.

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6. We have considered the rival submissions. Proviso to Clause (2) of Regulation 2 cannot be invoked in the present case as the said provision applies only where the Tariff for the period ending 31st March, 2004 was not determined under the terms and conditions for determination of Tariff applicable for the period 1st April, 2001 to 31st March, 2004 in respect of Kawas GPS and Gandhar GPS Tariff was determined based on the terms and conditions applicable for that period.

7. The relaxation, in the Normative Target Availability Level granted by Order dated 1st November, 2000 was "one time" act. This, inter alia, was for the reason that target availability level for recovery of capacity (fixed) charges was increased from 62.78 per cent to 80 per cent with effect from 1st April, 2001. While granting relaxation, the Commission had noted that the special dispensation being allowed was to be reviewed while considering revision of norms for the period beyond 31st March, 2004. The terms and conditions for determination of Tariff for the period 1st April, 2004 onwards have already been notified. The target availability of 80 per cent has been retained in respect of the generating stations belonging to the Petitioner except for Tanda TPS. When specifying the fresh norms for Tariff determination applicable from 1st April, 2004, the Commission did not consider it appropriate to provide for relaxed target availability for any generating station in case of inability of the Petitioner to obtain sufficient quantity of fuel. Sufficient time was available with the Petitioner to make necessary arrangements for supply of gas from alternative sources after grant of relaxation by Order dated 1st November, 2002. The Petitioner as a commercial entity has to bear the responsibility to ensure that its generating stations are available to the Respondents, who do not have any role in arranging availability of fuel for the generating stations in question. Therefore, considering the totality of the circumstances we do not consider it to be a fit case for grant of relaxation in target availability, as prayed for, by invoking powers under Regulation 13. The Petitioner is, however, at liberty to divert gas supply from Kawas GPS to Gandhar GPS in terms of the consent already given by the beneficiaries in the Western Region. The Petitioner is also at liberty to declare availability of Kawas GPS based on liquid fuel for which also the beneficiaries have given their consent.

17. Aggrieved by the Order of the CERC dated 16th February, 2006 in Petition No. 46 of 2005, the NTPC has filed the instant appeal.

18. We have heard the learned Counsel for the parties extensively.

19. The learned Counsel for the Appellant has submitted that Kawas GPS and Gandhar GPS should be considered as single integrated unit for the purpose of target availability as the gas facility for both the stations is being operated in an unified manner. It is also pointed out that CERC has allowed diversion of gas from Kawas GPS to Gandhar GPS in view of inadequate availability of gas. It was also contended that in the circumstances, the Target Availability norm of 80 per cent ought to have been relaxed under Clause (2) of Regulation 2 and Regulation 13 of the Regulations of 2004. On the other hand, the learned Counsel for the Respondents submitted that the Target Availability for recovery of full capacity charges has been fixed by the CERC at 80 per cent, making no exception for Kawas and Gandhar GPS. According to the learned Counsel, the Target Availability for recovery of full capacity charges of 80 per cent applies to both the GPS separately and individually. As per the learned Counsel the Appellant is not entitled to seek relaxation of Target Availability norms as the issue of non-allocation of gas falls within the realm of Appellant's commercial risks and in order to cover that risk, the Appellant ought to have made adequate arrangement for supply of gas as the same is freely available in the open market and for additional gas it could have tied up with GSPC-Niko, CAIRNS, GUVNL in addition to GAIL.

(a) For the purpose of recovery of capacity charges Kawas GPS and Gandhar GPS shall be considered as single integrated unit. This is basically for the reason that the gas supply to these two stations has been operated in an integrated manner by transferring it from Kawas GPS to Gandhar GPS.

(b) Recovery of full capacity charges in respect of Kawas GPS and Gandhar GPS shall be allowed on the "unit" achieving 80 per cent machine availability and 65 per cent PLF, subject to dispatch instructions by WRLDC. The Petitioner shall be liable to demonstrate the machine availability when asked to do so by WRLDC/WREB.