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1. The present appeal is directed against the order dated 04.11.2006 in Petition No. 100 of 2006 and the subsequent order dated 13.04.2007 declining to review the order dated 04.11.06. The appellant, Ajmer Vidyut Vitran Nigam Ltd. (AVVNL), is the successor in interest of the Rajasthan State Electricity Board (RSEB).

The background facts:

2. The respondent No. 2, which runs the Jhamarkotra Mines in District Udaipur, has been a consumer of electric energy in bulk. The first agreement for High Tension supply by the Rajasthan State Electricity Board (PSEB for short) to the respondent No. 2 i.e. Rajasthan State Mines and Minerals Ltd. (RSMML for short) is of 15th April, 1984. The respondent No. 2 continues to be a consumer of High Tension electricity of the appellant and the contract dated 15th April, 1984 has been renewed from time to time. The agreement will be referred to as the HT agreement and electricity supply under the agreement as HT supply. The respondent No. 2 set up various wind energy power plant at Barabagh in Jaisalmer District of Rajasthan. The Government of Rajasthan has been promoting generation of wind energy for which the Government issued a policy on 04.02.2000 and 03.04.2003. Having set up the wind energy power plant, on account of such encouragement, the respondent No. 2 entered into a wheeling and banking agreement with the appellant on 29.08.2001. Banking of electricity is a facility to help small generating stations based on non-conventional energy sources to produce power by maximizing utilization of available fuel stock without demand restrictions. The purchaser i.e. the transmission licensee or distribution licensee, purchases the entire power generated by the plant and to the extent it is in excess of the need of the purchaser or the demand of the third parties, the same is, so to say, deposited or banked with the licensee which can be later released or returned to the generator as and when the generator may require. The policy paper dated 04.02.2000 issued by Rajasthan Energy Development Agency incorporated the clause that the State Electricity Board will permit the power generated in a financial year by eligible producers to be banked for the period up to 31st March of the said financial year and that the banked energy, if not consumed within this period would be treated to have been sold to the RSEB at 60% of the prevailing valid HT rates. The policy paper also includes wheeling or transmission clauses requiring RSEB to transmit on its grid the power generated by eligible producers and make it available to them for their captive use or to third party nominated by eligible producer for sale at a uniform wheeling charge of 2% of energy wheeled. The same provisions reappear in the next policy paper with the only amendment that the wheeling charges would be 10% of the energy wheeled. By the time the second policy paper was issued in 2003, the three distributing companies known as Jaipur Vidyut Vitaran Nigam Ltd., Jodhpur Vidyut Vitaran Nigam Ltd. and Ajmer Vidyut Vitaran Nigam Ltd. had come into existence as successors of the RSEB for the function of distribution of electricity. They were briefly described as Jaipur DISCOM, Jodhur DISCOM and Ajmer DISCOM in the policy paper. The wheeling and banking agreement was entered into by the respondent No. 2 or RSMML with the Rajasthan Rajya Vidyut Prasaran Nigam Ltd. or the RVPN which was the transmission licensee at the time and with the Jodhpur DISCOM and Ajmer DISCOM (the appellant). This agreement was entered into for an initial term of 20 years. The RSMML, under the agreement, is entitled to make use of the power generated by it for its captive consumption at its industrial units or to sell to third parties after paying wheeling charges @ 2% to RVPNL and to wheel the energy to any place within the jurisdiction of the appellant or the Jodhpur DISCOM. RVPN was obliged to bank in a financial year up to 31st March of the financial year. The respondent No. 2, RSMML was to bear the entire cost of grid interfacing including laying of HT lines from the point of generation to the nearest HT line of the Jodhpur DISCOM i.e. up to the technically feasible point. RSMML required energy at the wind farm for back up purposes. Meters were stipulated to be installed at the point of export of power to the grid and another for import from the grid. The meter for measuring outgoing energy i.e. power delivered by RSMML to RVPN was required to be installed at delivery point. Banking provision is as under:

69. To have proper appreciation of the case and taking the agreement whereby 5% of the total generation of the captive power plant is earmarked for captive use for wheeling to the captive loads on payment of wheeling charges and the balance 95% is sold to the Appellant for which no wheeling charges is leviable on the generator. Wheeling charges as per the agreement are recovered in the form of energy units and not in cash. Thus 5% of the total generation recorded by the export meter is injected into the grid and after netting of with the wheeling charges, the balance energy is available for captive use in the grid. The grid network additionally has a pool of energy procured and injected from different sources of the distribution licensee. The energy from different sources in the energy pool have common characteristics and is not distinguishable as to which energy is injected by which source into the grid; nor it is required to be known. The energy units injected into one point of the grid network are off-taken by one or more destination consumers recorded by the import meters within their premises. The transactions are carried out based on the energy equalization i.e. the sum of energy units injected by all sources into the grid is equal to sum of energy off-take from the grid by all connected consumers, giving due regard to T&D losses which are recovered through wheeling charges. The entire distribution and transmission networks providing connectivity to widely dispersed generation sources with innumerable consumers operate on this principle. The open access to transmission and distribution networks also work on the same principle.

Article 2.2 (iii) provides that, The energy supplied by RSMML at the Delivery point shall be considered as the energy supplied to RVPN and deemed banking to RVPN after adjustment of units for captive use and / or sale to third party by RSMML in case the total generation is more than the Captive Consumption and /or sale to third party plus wheeling charges. The suitable metering arrangement shall be made at 132 KV GSS, Jaislamer, to have the account of power utilized by Jodhpur Discom due to generation of power from RSMML's power plant Article 3.4 provides that The billing will be on monthly basis. This shall be done after deducting the units for adjustment towards captive use and/or sale to third party by RSMML. The detailed account of units generated and used for captive use and/or sale to third party shall be kept in a pass book and or subsidiary pass books and such pass books shall be used for adjustment of bills. It is clarified that the users shall continue to be the consumer of Ajmer/Jodhpur Discom and shall be billed for the fixed charges and minimum charges as applicable for large industrial service as per the tariff determined by RERC. The Energy Charges shall be worked out on the net energy drawl from the grid (Total energy drawn less captive generation less losses and wheeling charges).

(b) A Captive generator, later in Aug. 2001, is added into the system and is regulated by terms and conditions of WB Agreement. It inter-alia implies that:
G Units Net of generated and wheeling charges is wheeled to the industrial load.
The units banked (eb) in the preceding month is added to G to give total units of energy available i.e. = G + eb.
Minimum charges (em) is payable, if units drawn from the grid's AVVNL's owned sources (es) is less than the specified minimum units determined by the HT-agreement and applicable tariff. For example, if minimum units = 20 and units drawn from the AVVNL owned sources=10, the shortfall in minimum units = (20-10) = 10 units represent 'Minimum Charges' (em). The units drawn from the grid's AVVNL owned sources (es) is equal to the difference of recorded consumption by the import meter (i.e. eL) and the recorded generation by export meter net of wheeling charges (i.e G) by energy equalization. These measurements are recorded at coincident time and verified by both parties.