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SUPREME COURT OF INDIA
L. Nageswara Rao, Deepak Gupta, JJ.
SAI WARDHA POWER GENERATION LIMITED – Appellant(s)
Versus
THE TATA POWER COMPANY LIMITED DISTRIBUTION & ORS. – Respondent (s)
Civil Appeal No. 2228 of 2020 @Diary No.24669 of 2019) with Civil Appeal No.5049 of 2019
Decided on : 03-04-2020
Electricity Act, 2003 – Section 2 (72) – Central Electricity Authority (Technical Standards for Construction of Electrical Plants and Electric Lines) Regulations, 2010 – Power supply – Levy wheeling charges – Separate licenses for transmission and distribution to TPC-T and TPC-D respectively were granted in 2014 – TPC-T included 2x110 kV lines in its transmission assets – Network roll out plan submitted by TPC-D included lines upto 33 kV in its distribution network – An application was filed by TPC-T for amendment of licence which is pending before Commission, following remand by Tribunal – Tribunal did not advert to application filed by TPC-T for amendment of transmission licence – Tribunal also did not refer to its order by which it set aside order of Commission disallowing application for amendment of transmission license and remanded the matter back to Commission – Tribunal committed error in ignoring existing transmission licence of TPC-T before coming to a conclusion that 2x110 kV lines are part of distribution network – Tribunal ought to have directed Commission to adjudicate application filed by TPC-T for amendment of transmission licence – Thereafter, Tribunal should have decided an appeal, if any, filed against decision of Commission on application for amendment before taking up appeal filed by TPC-T against order of Commission – Tribunal was wrong in not taking note of application filed by TPC-T for amendment of its transmission licence in which 2x110 kV lines were included in transmission network – Till transmission licence of TPC-T is not modified, 2x110 kV lines form part of transmission network of TPC-T – Tribunal could not have held that 2x110 kV lines should be included in distribution system of TPC-D – Judgment of Tribunal is required to be set aside and matter should be remanded back for fresh consideration. (Paras 17, 18, 19 and 20)
Facts of the Case:
Question that arises for our consideration in these Appeals is whether Tata Power Company Limited- Distribution (TPC-D) is entitled to levy wheeling charges for the power supplied to Hindustan Petroleum Corporation Limited (HPCL) and wheeling charges for the power sourced from Sai Wardha Power Generation Limited (SWPGL) through open access. Maharashtra Electricity Regulation Commission (Commission) allowed petition filed by HPCL and held that TPC-D is not entitled to levy wheeling charges. Consequently, the Commission directed TPC-D to refund the amounts collected from HPCL, in the form of wheeling charges. Appellate Tribunal for Electricity allowed the appeal filed by TPC-D and set aside order of the Commission. Aggrieved thereby, SWPGL and HPCL have filed the Appeals.
Findings of the Court:
CEA Regulations 2010, the Maharashtra Electricity Regulatory Commission (Transmission Open Access) Regulations, 2016 and the Maharashtra Electricity Regulatory Commission (Distribution Open Access) Regulations, 2016 provide for demarcation between the transmission and distribution boundaries on the basis of voltage. The Tribunal erred in ignoring the said Regulations while holding that 2x110 kV lines are part of the distribution system.
Result : Appeal remitted to Tribunal for fresh adjudication.
JUDGMENT
L. Nageswara Rao, J.
The question that arises for our consideration in these Appeals is whether Tata Power Company Limited-Distribution (hereinafter, 'TPC-D') is entitled to levy wheeling charges for the power supplied to Hindustan Petroleum Corporation Limited (hereinafter, 'HPCL') and wheeling charges for the power sourced from Sai Wardha Power Generation Limited (hereinafter, 'SWPGL') through open access. The Maharashtra Electricity Regulation Commission (hereinafter, 'the Commission') allowed the petition filed by HPCL and held that TPC-D is not entitled to levy wheeling charges. Consequently, the Commission directed TPC-D to refund the amounts collected from HPCL, in the form of wheeling charges. The Appellate Tribunal for Electricity allowed the appeal filed by TPC-D and set aside the order of the Commission. Aggrieved thereby, the SWPGL and HPCL have filed the above Appeals.
2. Tata Power Company Limited (TPC was granted an integrated licence for supply of electricity under the provisions of the Indian Electricity Act, 1910. HPCL has been receiving electricity from TPC on its 22 kV distribution network since 1955. In 2005, HPCL augmented its oil refining facility by installing additional units. HPCL requested TPC to supply additional power to feed its load requirement of 70 MW on 100 per cent redundancy basis. The supply was required to be enhanced to extra high voltage (EHV) level. A power supply agreement was executed between TPC and HPCL on 20th October, 2005 for providing power supply of 110 kV to HPCL's expansion project at Chembur. The actual supply of 70 MW power started in the year 2008 after the construction of 2x110 kV facility and the requisite regulatory approvals.
3. In the meanwhile, as per the directions of the Commission, TPC trifurcated its assets and segregated them into different entities for generation, transmission and distribution for the purpose of accounting and tariff determination in the year 2006. The Commission determined separate tariffs for Tata Power Company Limited-Generation, Tata Power Company Limited-Transmission and Tata Power Company Limited-Distribution businesses for the first time on 03.10.2006. Thereafter, separate tariffs were determined by the Commission for Tata Power Company Limited-Generation, Tata Power Company Limited-Transmission and Tata Power Company Limited-Distribution. While approving the request for construction of 2x110 kV lines for power supply of 70 MW to HPCL on 16.10.2007, the Commission directed TPC that the other consumers in the vicinity may also be supplied power from the 2x110 kV distribution lines. By the tariff order dated 04.06.2008, the Commission permitted the capitalization of the 2x110 kV distribution lines in the books of accounts of TPC-D. Undisputedly, HPCL has been paying wheeling charges i.e. charges for the right to use of the distribution network since 2008.
4. In the year 2014, TPC filed applications before the Commission for grant of transmission licence and distribution licence under the Electricity Act, 2003. On 17.04.2014, a representation was made by TPC classifying 2x110 kV lines as part of the transmission system and 33 kV and lower lines as part of the distribution system. The Commission granted Transmission Licence No. 1 of 2014 to Tata Power Company-Transmission {TPC-T) on 14.08.2014. HPCL applied to TPC-D on 04.11.2015 for availing 21.02 MW short term open access for getting power as a group active user from SWPGL which was approved by TPC-D. HPCL executed a power purchase agreement with SWPGL on 08.07.2016 with partial supply of electricity on open access. HPCL sought approval of TPC-D for the use of its distribution network.
5. On 10.10.2016, TPC-T filed an application before the Commission for amendment of the transmission licence No.1 of 2014. TPC-T stated in the said application that inclusion of the 2x110 kV lines in its network is an inadvertent error as the lines were always part of the distribution system. Thereafter,
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