The court clarified that Section 63 of the Electricity Act allows local authorities to apply for tariff adoption, rejecting the APTEL's restrictive interpretation.

JUDGMENT :

B.R. GAVAI, J.

1. The present appeals filed under Section 125 of the Electricity Act, 2003¹ [‘the Act’ hereinafter] arise out of the Impugned common final judgment and order of the Appellate Tribunal for Electricity at New Delhi² [‘APTEL’ hereinafter] dated 31st August 2023 passed in DFR No. 245 of 2023 and DFR No. 247 of 2023 which were both filed by the Respondent No. 1 herein-Mr. Gagan Narang. The APTEL disposed of the appeals and set aside the orders of the Delhi Electricity Regulatory Commission³ [‘DERC’ hereinafter] dated 6th and 7th March 2023. Vide the order dated 6th March 2023 the DERC had dismissed the petition filed by Waste to Energy Research & Technology Council⁴ [‘WTERT’ hereinafter] challenging the authority of the Appellant herein-Municipal Corporation of Delhi⁵ [‘Appellant-MCD’ hereinafter] to issue the tariff-based bid and Request for Proposal⁶ [‘RFP’ hereinafter] for setting up the Waste to Energy⁷ [‘WTE’ hereinafter] project at Narela Bawana, Delhi. Vide order of 7th March 2023, the DERC had approved the bid tariff of Rs. 7.38/- KWh for the project and had directed the Distribution Licensee to negotiate the terms of the Power Purchase Agreement⁸ [‘PPA’ hereinafter] with the Appellant-MCD.

2. Shorn of details, the facts leading to the present appeals are:

2.1 The Appellant-MCD organized a meeting with the Distribution Licensees in Delhi and other stakeholders on 14th May 2022. It was agreed that a tariff-based bidding model may be adopted and the details about the same, including the volume of waste, total power generation, and other considerations for the proposed project were decided. It was further decided that the sale of power be distributed amongst the Distribution Licensees as per their ‘Renewable Purchase Obligation’. The Appellant was authorized to conduct the bidding process as per the regulations and requirements of Section 63 of the Act for the proposed WTE project. The same was put in writing and was detailed in the Minutes of Meeting dated 30th May 2022.

2.2 The Appellant-MCD, issued the Notice Inviting Tender⁹ [‘NIT’ hereinafter] and the RfP dated 15th July 2022 whereby the tariff-based bids for procurement of power under WTE project for Solid WTE Processing Facility with a minimum 28 MW capacity in Narela Bawana, New Delhi, for 3000 (+/- 20%) TPD of MSW¹⁰ [‘Project’ hereinafter] were invited. The documents for the same were sent to the DERC for its consideration.

2.3 The DERC, vide letter dated 24th August 2022 directed the Appellant-MCD to file a petition for approval of PPA, Rfp, etc. The letter also contained the details of the petitions filed by South Delhi Municipal Corporation and the East Delhi Waste Processing Co. Ltd. seeking similar approvals, which were granted by the DERC through separate orders. An evaluation committee was also constituted for the evaluation of bids and other related issues. The Appellant-MCD issued a notice that the bidding process dated 15th July 2022 were closed and a new NIT was issued on 21st October 2022 with identical terms as the earlier NIT.

2.4 The WTERT filed a Petition No. 65 of 2022 before the DERC inter alia challenging the authority of the Appellant-MCD for issuing the tariff-based bid and the RfP in setting up the Project. During the pendency of this petition, the bidding process was undertaken, and on 14th November 2022, bids were received from M/s JITF Urban Infrastructure Ltd. and M/s JBM Renewables Pvt. Ltd. A meeting of the Evaluation committee was held, and the documents submitted by the bidders keeping in mind the requirement of the RfP document were discussed, and on recommendation of the committee, the bids of both the bidders were declared to be technically qualified and their bids were allowed to be opened. The Regional Centre for Urban & Environmental Studies¹¹ [‘RCUES’ hereinafter] calculated the levelized tariff based on the RfP and the same was communicated and calculated as: