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APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial Member
Adhunik Power and Natural Resources Limited – Appellant
Versus
Central Electricity Regulatory Commission – Respondent
APPEAL No.143 OF 2020 | APPEAL No.66 OF 2022
1. Dispute over whether cancellation of captive coal block allocation constitutes Change in Law under power purchase agreements. (Para 1 , 3 , 4 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 )
2. Whether coal block was identified fuel source; whether cancellation is Change in Law; entitlement to compensation for tapering linkage shortfall. (Para 36 , 37 , 42 , 43 , 44 , 58 , 76 , 77 , 78 , 85 , 86 , 94 )
3. Appeal allowed; cancellation of coal block held to be Change in Law; CERC directed to determine compensation within three months. (Para 99 , 100 , 101 , 102 , 103 )
Yes, based on Article 2.5, correspondence, and minutes of meeting, the parties recognized the captive coal block as the intended fuel source. (Para 40 , 41 , 45 , 46 , 47 , 48 , 49 , 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 )
Yes, the Supreme Court changed the interpretation of mining laws, thus qualifying as Change in Law under Article 10.1.1(b) of the PPA/PSA. (Para 68 , 69 , 70 , 71 , 72 , 73 , 74 , 75 , 78 , 79 , 80 , 81 , 82 , 83 , 84 , 85 , 86 , 87 , 88 , 89 , 90 , 91 , 92 , 93 )
Yes, Article 2.5 does not apply before operationalization of captive mine; APNRL is entitled to compensation for alternate coal procurement. (Para 94 , 95 , 96 , 97 , 98 )
Yes, and the fact that APNRL did not win a fresh bid in the auction under that Act entitles it to compensation for increased coal costs. (Para 92 , 93 )
JUDGMENT
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. The order dated 29.01.2020 passed by Central Electricity Regulatory Commission (hereinafter referred to as “the Commission”) in petition no.305/MP/2015 filed by M/s Adhunik Power and Natural Resources Limited (in short APNRL) has been assailed in these two appeals. Since both the appeals arise out of the same order dated 29.01.2020, we propose to dispose off these vide this common judgment.
2. For the sake of convenience, we shall be referring to the parties in the two appeals by their names instead of appellant or respondent.
3. APNRL (appellant in appeal no.143/2020) has set up a 540MW (2x270MW) Thermal Power Project at Saraikela-Kharsawn District in Jharkhand.
4. West Bengal State Electricity Distribution Company Limited (in short WBSEDCL), which is respondent no.2 in appeal no.143/2020 and appellant in appeal no.66/2022, is a distribution licensee and carrying on business of distribution as well as retail sale of electricity in the State of West Bengal. APNRL has back-to-back arrangement with WBSEDCL for supply of 100MW power through PTC for a period of 25 years vide Power Sale Agreement (PSA) dated 05.01.2011 and Power Purchase Agreement (PPA) dated 25.03.2011.
5. The other three respondents in these two appeal are PTC, which is an inter-state trader of electricity, Tamil Nadu Generation and Distribution Corporation Limited (in short TANGEDCO) which is a distribution licensee in the State of Tamil Nadu with whom also APNRL has back-to-back arrangement for supply of 100MW power through PTC for a period of 15 years and Jharkhand State Electricity Board (now known as Jharkhand Bijli Vitran Nigam Limited) which is a distribution licensee in the State of Jharkhand with whom also APNRL has entered into a PPA for supply of 189.25MW power.
6. The facts and circumstance, in brief, which are material for disposal of these two appeals are stated hereinbelow.
7. On 03.01.2011, a meeting was held between APNRL, WBSEDCL and PTC in which it was agreed that the parties will enter into an agreement whereby WBSEDCL would procure power from the power project of APNRL through PTC at a levelized tariff of Rs.3.13/kWh inclusive of trading margin i.e. Rs.0.06/kWh. It was further agreed that formal PSA and PPA would be executed between the parties in this regard.
8. Accordingly, a PSA dated 05.01.2011 was executed between the WBSEDCL and PTC for supply of 100MW power contracted from the project of APNRL on Round-The-Clock (RTC) basis at the delivery point i.e. metering point on the inter-connection between the power project and Central Transmission Utility (in short CTU). The term of the PSA is 25 years from the scheduled delivery date which has been agreed as 01.04.2013.
9. Subsequently, a PPA dated 25.03.2011 was executed between the APNRL and PTC for sale of 100MW of electricity from the power project of APNRL on RTC basis for a period of 25 years for onward sale by PTC to WBSEDCL. Since PSA dated 05.01.2011 was the basis for execution of PPA, its copy was annexed to the PPA as Schedule-B.
10. Certain amendments appear to have been made to the PPA vide amendment agreement no.1 dated 26.04.2011 and amendment agreement no.2 dated 01.12.2011.
11. Vide letter dated 22.12.2011, WBSEDCL wrote to PTC informing that PSA dated 05.01.2011 has been approved by the West Bengal Electricity Regulatory Commission vide its order dated 15.12.2011.
12. On 30.04.2012, WBSEDCL enquired through PTC about the status of the progress in development of activities pertaining to mining of coal from Ganeshpur Coal Block, which had been allotted to APNRL jointly with Tata Steel. Vide letter dated 10.05.2012, APNRL informed that it is following up consistently with Tate Steel Limited (being the lead miner) for opening of coal mine for coal production.
13. A Public Interest Litigation (PIL) being Writ Petition (Criminal) No.120 of 2012 was filed by one Mr. Manohar Lal Sharma in Supreme Court on 14.09.2012 with regards to the val
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