Failure to demonstrate declared power generation capacity upon regulatory demand constitutes a strict civil liability breach, not requiring proof of mens rea or fraudulent intent to impose penalties, as this is conceptually distinct from the regulatory offense of 'gaming'.

JUDGMENT

K. VINOD CHANDRAN, J.

The appeals are filed by the Punjab State Load Despatch Centre (PSLDC) and the Punjab State Power Corporation Limited (PSPCL) against the judgment of the Appellate Tribunal for Electricity (APTEL) reversing the order of the Punjab State Electricity Regulatory Commission (SERC). The impugned order sets aside the finding of ‘misdeclaration of Declared Capacity’ as found by the PSLDC on four days in January 2017. Initially, misdeclaration was found for five days i.e. on 10.08.2015, 15.01.2017, 17.01.2017, 24.01.2017 and 31.01.2017 leading to a levy of penalty coming to Rs.162,74,72,865/- by Memo No. 278 dated 15.03.2017, out of which a penalty of Rs.74,27,27,159/-stood deducted from the pending bills. At the instance of the State Generating Station, Talwandi Sabo Power Limited (SGS or TSPL, alternatively) directions were issued by the High Court referring the matter, first to the Commercial and Metering Committee and then to the State Grid Code Review Committee. Dissatisfied with the proceedings thereat, again on the directions of the High Court, the matter was referred to the SERC which affirmed the findings of the PSLDC that the SGS had failed to demonstrate its capacity on four occasions in the month of January 2017 but rejected the finding of misdeclaration in the month of August 2015. The APTEL reversed the said order and deleted the findings of misdeclaration, and the resultant penalty.

Appellants; in support of the SERC: -

2. Shri M.G. Ramachandran, appearing for the PSLDC at the outset pointed out that the energy requirement in the State varies with the demand, being high during May to September; the paddy season, and comparatively lower for the remaining months of the year. Reference was made to Schedule-7 of the Power Purchase Agreement (PPA) which provides for a two-part tariff, one; on the capacity based on the Declared Capacity/Capability (DC), a fixed charge, and a variable charge on the energy scheduled for supply. The SGS, the generator, is required to declare the electricity generation capacity in megawatts (MW) for every given day, the scheduling of which is decided by the PSLDC based on the anticipated requirements of PSPCL, equal to or below the declared capability. Even if the scheduling required by the PSPCL is lower it has an obligation to pay the fixed charges, the difference being termed as deemed generation, subject to incentives and disincentives based on the percentage of declared availability as determined annually. The PSLDC exercises statutory functions under Section 32 of the Electricity Act, 2003 (the Act of 2003) to oversee, monitor and control the availability schedule and despatch of electricity as generated by the SGS and supplied to PSPCL.

3. The Punjab State Grid Code, 2013 (SG Code) provides for detailed steps for declaration of capability, scheduling and despatch as also enables revision of injection and drawal schedule on a real time basis relatable to the requirements, subject to forced outages, bottlenecks etc. The PSLDC has overriding powers insofar as calling upon the SGS at any point of time to revise the schedule which has to be effective from the 4th time block, the first being counted as that in which the revised schedule is issued, each of such time blocks being of 15 minutes duration. The SGS is also required to declare the possible ra