JUDGMENT

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The legality and propriety of order dated 22.06.2020 passed by the Odisha Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in case no.68/2018 is under challenge in this batch of two appeals. Since both these appeals arise out of the same impugned order as well as the same set of facts and circumstances, we propose to dispose off the two appeals vide this common judgment.

2. For the sake of convenience, the parties hereto are referred to by their names instead of appellants or respondents.

3. M/s Vedanta Limited (in short “Vedanta”) owns and operates a 2400MW (1x600MW IPP and 3x600MW Captive/CGP units) thermal power plant at Jharsuguda, Odisha which supplies power to GRIDCO Limited, apart from captively consuming the balance power for its Aluminum smelting units.

4. GRIDCO Limited is engaged in the business of bulk purchase and sale of power to four distribution companies in the State of Odisha.

5. Vedanta executed a Memorandum of Understanding dated 26.09.2006 with the Department of Energy, Govt. of Odisha whereunder the State Government has right to purchase upto 25% of power sent out from the thermal power plant through a nominated agency.

6. On 28.09.2006, Vedanta entered into a long-term Power Purchase Agreement (PPA) with GRIDCO Limited whereunder it was under obligation to supply 25% of energy sent out from its thermal power plant to GRIDCO Limited at full tariff and an additional 7% or 5% (7% in the event coal block is allocated in the State of Odisha, or 5% in the event coal is being sourced from outside the State) at variable tariff. The PPA was submitted to the Commission for approval by way of case no.44/2006. The Commission, vide order dated 20.08.2009, directed certain modifications in the PPA. The modifications, as directed by the Commission, were caried out in the PPA and an amended PPA was executed between the parties on the same date i.e. 20.08.2009. Subsequently, the amended PPA was submitted to the Commission by way of case no.117/2009 for approval. Vide order dated 30.07.2010 passed in the said petition, the Commission directed further modifications and execution of a consolidated PPA with respect to all the four units of the power plant.

7. In pursuance to the said order dated 30.07.2010 passed by the Commission, a consolidated PPA dated 19.12.2012 was executed between Vedanta and GRIDCO Limited which came to be approved by the Commission vide order dated 12.06.2013 passed in the said case no.117/2009.

8. A modified Fuel Supply Agreement dated 27.08.2013 was executed between Vedanta and Mahanadi Coalfields Limited for unit-II of the power plant.

9. Subsequently, on 01.04.2015, Units-I, III and IV of the power plant were converted to captive generating plant. Accordingly, a petition bearing case no.21/2015 was filed by Vedanta before the Commission on 17.06.2015 seeking conversion of all the four units of the power plant to captive generating plants for the purpose of meeting the load requirement at its Aluminum smelter plant. Vide order dated 27.01.2016 passed by the Commission in the said petition, conversion of units-I, III and IV of the power plant from IPP to CGP was approved with effect from 01.04.2015 whereas unit-II was directed to remain as IPP and connected to the state grid. The relevant portion of the order is extracted hereinbelow: -

“35. In conclusion, the Commission issues the following directions:

a) Unit – II of the 4 x 600 MW power plant of Vedanta Ltd. will continue to remain as IPP and connected to the State Grid.

b) Quantum of power supply to GRIDCO towards State entitlement should be 25% (at full cost) and 7% / 5% (at variable cost) of total energy sent out from the power station (4 x 600 MW) as per the PPA in force. The Unit-II must remain connected to STU as State dedicated unit and accordingly supply to GRIDCO must be 25%+7%/5% of total energy sent out from the power station or total ex-bus generation from