important points
UI charges are not by way of penalty.
The term power system is of wide import and is not confined to inter State Transmission Lines but extends to even supply lines, distribution, main service lines etc.
It is well settled that a power to regulate includes within it the power to enforce.

Headnote:(a)Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 – Regulation 15 – Unscheduled Interchange of power charges are commercial mechanism to maintain grid discipline and become payable by whosoever causes grid indiscipline, be it generator or distributor – UI charges are not payable if utilities maintain their drawl of electricity consistent with the schedule given by themselves – Therefore, the UI charges are not by way of penalty. (Para 11)
       (b)Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 – Regulation 15 – Commission in view of the request of Powergrid/CTU staggering the implementation of ABT – Simhadri SPTS having been brought under ABT scheme w.e.f. 1.12.2005 was not left out of the purview of the scheme. (Para 14)
       (c)Electricity Act, 2003 – Section 79(1)(a) r/w Section 86(1)(f) – Central Commission having jurisdiction over generating companies owned or controlled by the Central Government, and the power to specify Grid Code, NTPC’s Simadhri Station is covered – Function of the State Commission to specify State Grid Code under Section 86(1)(f) should be consistent with the Grid Code specified by the Central Commission – Therefore power of the State Commission is subservient to the power of the Central Commission – Maintenance of Grid discipline envisaged under the Grid Code is regulated by the mechanism of ABT and UI charges – It is not correct to say that unless something is a part of Tariff the Central Commission cannot exercise powers and functions. (Paras 17and 22)
       (d)Words and phrases – The term power system is of wide import – It is not confined to inter State Transmission Lines but extends to even supply lines, distribution, main service lines etc. (Para 17)
       (e)Electricity Act, 2003 – Section 33 (3) – Scheme of the Act is that RLDC is required to follow the principles, guidelines and methodologies specified by the Central Commission and all persons including the distribution licensees are required to follow the directions of RLDC – RLDC can enforce such directions through SLDC – State Grid cannot be isolated and seen as independent from the region – It is not correct to say that Central Commission has no jurisdiction to deal with grid discipline in regard to single State beneficiary station – ABT is to ensure discipline in the integrated system and only the Central Commission has the jurisdiction particularly in regard to generating stations of NTPC – Well settled that a power to regulate includes within it the power to enforce. (Paras 18, 19, 24 and 25)
       AIR 1970 SC 228; (1985) 2 SCC 116; AIR 1964 SC 1781; 1992 Supp.(1) SCC 684 – Relied upon.
       (f)Natural Justice – CER Commission after consultation with various agents and after threadbare discussion taking a decision on 4.1.2000 to introduce ABT scheme – This order having been passed after hearing all parties concerned including the predecessor (State of Andhra Pradesh) of the appellants the allegation of non-compliance with principles of natural justice held misconceived. (Paras 20 and 23)
       Facts of the case :
       The Central Electricity Regulatory Commission, in view of the request of Powergrid/ CTU to stagger the implementation of ABT so that they would be able to make satisfactory arrangements before implementation, the following schedule for implementation of ABT was issued:
       Southern Region 1-4-2000
       Eastern Region 1-6-2000
       Northern Region 1-8-2000
       Western Region 1-10-2000
       The Commission also decided that all other generating stations owned by the Central Power Sector Utilities which are supplying power to only one beneficiary of the State be brought under the purview of ABT. Simhadri SPTS (2 x 500 MW) was also brought under ABT scheme w.e.f. 1.12.2005. This would show that the ABT scheme was implemented at the request of Powergrid/CTU so that they would be able to make satisfactory arrangement before the implementation. It is clear that the ABT scheme was implemented in a phased manner. The ABT scheme in respect of Simhadri SPTS was made applicable w.e.f. 1.12.2005. It is therefore not correct to say that Simhadri SPTS was kept out of the purview of the ABT scheme.
       The principal contention of the counsel for the appellants was founded on two grounds, (1) that the CERC did not have the jurisdiction to introduce ABT for generating stations supplying power within the State of Andhra Pradesh and (2) the CERC has failed to provide an opportunity of hearing to the appellants whose interests have been adversely affected by the impugned order.
       Findings of the Court:
       The CERC has the power to regulate and control grid code and State grid cannot be isolated from the Region. There has not been any violation of principles of natural justice.
       Result : Appeal dismissed.

JUDGMENT

H.K.SEMA, J.—

1.This appeal is directed against the judgment and order dated 3.1.2006 passed by the Appellate Tribunal for Electricity (Appellate Jurisdiction) in Appeal No.152 of 2005 whereby the Appellate Tribunal dismissed the appeal filed by the appellants.

2.The appellants challenged the order of the Central Electricity Regulatory Commission (CERC) dated 4.7.2005 passed in petition No.67/2003 (suo moto), whereby the CERC inter alia ordered the application of Availability Based Tariff (ABT) to Simhadri SPTS thermal station of the National Thermal Power Corporation (NTPC) with effect from December 1, 2005.

3.This appeal was admitted on 1.5.2006 to be heard on the following questions of law :

(a)Whether the application of Availability Based Tariff (ABT) in relation to Unscheduled Interchange (UI) charges, which otherwise is not a component of tariff in terms of Regulation 15 of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2004 and they are liable to be held as beyond the jurisdiction of the Central Electricity Regulatory Commission (CERC)?

(b)As such the impugned order passed by the Appellate Tribunal for Electricity has completely ignored the fact that the CERC order, which was passed suo moto and ex parte, is non est and without jurisdiction?

(c)Can the Availability Based Tariff as established and provided in the order of the CERC by its order dated 4.1.2000 be implemented under the provisions of Electricity Act, 2003, particularly when there is no provision under the statute that allows the CERC to levy Unscheduled Interchange Charges? and

(g)whether in the present facts and circumstances as regards the Simhadri SPTS thermal station of the National Thermal Power Corporation (NTPC) which admittedly supplies power to the State Grid and has no connection with the management of the National Grid, can the CERC in such circumstances exercise, particularly when matters relating to the State Grid falls within the role and function of the State Electricity Regulatory Commission?

FACTUAL BACKGROUND:

4.This appeal has a chequered history leading to the passing of the 4th July, 2005 order by CERC. Avoiding prolixity, we may recite few facts.

WHAT IS ABT

5.Before we proceed further, we may at this stage, highlight what is ABT and the purpose of introduction of ABT. ABT was introduced in regard to number of generating stations of NTPC and other Central Sector generating stations under the orders of the CERC. Prior to the introduction of ABT, the fixed charges were payable by the purchasers based on the units of electricity actually drawn by them. The scheme of recovery of fixed charges based on drawl of electricity was not considered appropriate and rationale particularly from the point of view of Grid safety and security. The scheme of fixed charges liability based on drawls allowed the purchasers of electricity to draw electricity from the Grid at their pleasure with no control. This led to the Grid Frequency to vacillate from 48.5 Hz to 51.5 Hz, whereas Grid Frequency was required to be maintained ideally at 50 Hz and at the most, it should be within optimum variations. The frequency exceeding the optimum variation was causing grid collapse and blackouts in the entire region besides affecting the equipments of all generations, other electricity utilities and also the consumers. This has been a serious prejudice to public interest.

6.Before the introduction of ABT scheme it was deliberated at different levels namely, by (a) consultants appointed by the Government of India to inquire into and make recommendations; (b) National Task Force (NTF) appointed by the Government of India; (c) Regional Task Forces again appointed by the Government of India; and (d) Central Electricity Authority.

7.After the constitution of Central Commission under the Electricity Regulatory Commissions Act, 1998 (in short the Act), the Government of India referred the matter of introduction of ABT to the Central Commi

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2007 Supreme(SC) 1077

2007(5) Supreme 864Supreme Court of India(From Appellate Tribunal for Electricity)H.K. Sema & Lokeshwar Singh Panta, JJ.Central Power Distribution Co.& Ors. — PetitionersversusCentral Electricity Regulatory Commission & Anr. — RespondentsAppeal (civil) 2104 of 2006Decided on : 17-08-2007

Cases Referred (4)