Technocrats and Managers Society of Advanced Learning and Gramothan vs Rajasthan Electricity Regulatory Commission

Headnote:(A) Electricity Act, 2003 - Section 9(2) - Rajasthan Electricity Regulatory Commission (Rajasthan Electricity Grid Code) Regulations, 2008 - Regulation 4.1 - Right to open access for captive generators is conditioned by availability of transmission facility, but does not permit injection of power into the grid without execution of a formal Long Term Open Access (LTOA) agreement. (Paras 17, 20)

(B) Wheeling and Banking Agreement (WBA) - Clause 5(A) - Adjustment of wheeled energy is subject to grant of open access - The phrase 'subject to' denotes a condition precedent - The right to energy adjustment is conditional upon the execution of an LTOA agreement. (Paras 16, 18, 19)

(C) Undertaking - A voluntary undertaking to supply free energy until the grant of LTOA is binding and precludes a claim for compensation for energy injected during that period. (Paras 27, 28, 29)

(D) Contract Act, 1872 - Section 70 - Quasi-contract - Principles of unjust enrichment not applicable where the generator voluntarily undertook to supply free power and injected power without a valid agreement or the consent of the distribution licensee. (Paras 30, 31)

Facts of the case:
The appellants, captive power generators, commissioned 500 kW solar PV plants on 6th April, 2017. They entered into a Wheeling and Banking Agreement (WBA) on 29th March, 2017, which contained a clause that energy adjustment would be subject to the grant of open access by the State Transmission Utility (STU). The appellants applied for Long Term Open Access (LTOA) on 21st March, 2017, but it was granted on 4th October, 2017. In the interim, the appellants injected power into the grid from the date of commissioning, without waiting for the LTOA, and submitted an undertaking on 30th March, 2017, promising not to claim energy adjustment and to supply free power to the Jodhpur Discom until the LTOA was granted. Upon seeking energy adjustment for the period 6th April, 2017 to 4th October, 2017, the respondents denied the claim based on the undertaking and the WBA clause.

Findings of Court:
The Appellate Tribunal upheld the decision of the State Commission, holding that under Clause 5(A) of the WBA, energy adjustment was conditional upon the grant of open access, which was not formalized until the LTOA was executed. The appellants’ right to open access under Section 9(2) of the Electricity Act, 2003 did not permit them to inject power without a formal LTOA agreement. The voluntary undertaking given by the appellants to supply free power was binding, and they could not later claim compensation for that period. The court distinguished the judgments in M/s TGV SRAAC Ltd. and Greenko Maha Wind Energy Pvt. Ltd., noting that in those cases, the generators had prior valid agreements or the licensee had accepted the power without objection.

Issues: Whether the appellants were entitled to energy adjustment for the power injected into the grid from the date of commissioning (6th April, 2017) until the execution of the LTOA agreement (4th October, 2017).

Ratio Decidendi: The court ruled that the right to open access for a captive generator under Section 9(2) of the Electricity Act, 2003 is conditional upon the availability of transmission facility, but this does not obviate the need for a formal LTOA agreement. The specific terms of the WBA and the voluntary undertaking by the appellants to supply free power until the LTOA was granted precluded any claim for compensation for the interim period. The principles of quasi-contract and unjust enrichment did not apply as the appellants had acted outside the legal framework. Result : Appeals dismissed.

Legal Category Hierarchy

1. Captive power generators injected solar power into grid before executing Long Term Open Access agreement — Discom denied energy adjustment for that period. (Para 2 , 8 , 9 , 10 , 11 , 12 )

2. Appellants claimed right to open access under Section 9(2) without LTOA; Respondents relied on contractual clause and undertaking to deny compensation. (Para 16 , 17 , 18 , 20 , 26 )

3. Appeals dismissed; Commission's order denying energy adjustment upheld. (Para 35 )

4. Under a Wheeling and Banking Agreement, does the phrase 'subject to grant of open access' condition energy adjustment on formal grant of open access?

Yes, the words 'subject to' make adjustment conditional on open access being granted, not merely on availability of transmission facility. (Para 18 , 19 )

5. Does an undertaking to supply free power until execution of LTOA preclude a later claim for compensation for that power?

Yes, such undertaking is voluntarily given and binding; the generator cannot later claim energy adjustment for that period. (Para 26 , 27 , 28 , 29 )

6. Does Section 9(2) of the Electricity Act allow captive generators to inject power into the grid without an LTOA agreement if transmission facility is available?

No, the right to open access requires compliance with regulations and execution of an LTOA agreement; mere transmission availability is insufficient. (Para 20 , 21 , 22 , 23 , 24 , 25 )

7. Are prior tribunal judgments on payment for power injected without agreement applicable when the generator gave an undertaking to supply free power?

Those judgments (TGV SRAAC, Greenko) are distinguishable because they involved expired agreements or consent, whereas here an express undertaking was given. (Para 30 , 31 , 32 , 33 , 34 )

JUDGMENT

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. Both the captioned appeals have been filed against the common order dated 13th June, 2019 passed by 1st Respondent – Rajasthan Electricity Regulatory Commission (hereinafter referred to as “the Commission”) and arise out of identical facts and circumstances.

Hence, both the appeals are proposed to disposed off vide this common judgement.

2. The Appellants in both the appeals are captive power generators having installed 500 kw solar photo voltaic captive power plants each for their captive use.

3. The 2nd Respondent is a Distribution Licensee in Jaipur within whose area the solar power projects of the Appellants are located. The 3rd Respondent is a company established by the Government of Rajasthan under the provisions of Rajasthan Power Sector Reforms Act, 1999 and State Transmission Utility (STU).

4. The 4th Respondent – Rajasthan Urja Vikas Nigam Limited is a company incorporated under the Companies Act by Rajasthan Government in the year 2015 to carry out trading business for State Power Sector Discoms.

5. The 5th Respondent is a State Load Despatch Centre (SLDC) for the State of Rajasthan performing statutory functions as provided under the relevant provisions of Electricity Act, 2003.

6. The 6th Respondent State Power Committee had been constituted by 3rd Respondent – STU under Regulation 4.1 of Rajasthan Electricity Regulatory Commission (Rajasthan Electricity Grid Code) Regulations, 2008 for its effective implementation. The 7th Respondent is another Distribution Licensees in the State of Rajasthan.

7. The location of generating stations of the Appellants and their captive generation unit fall within the are of Respondent Nos. 7 & 2 respectively.

8. The captive power plants of the Appellants were commissioned on 6th April, 2017.

9. The power evacuation permission for the power plants of the Appellants was granted by Respondent No. 3 vide letter dated 27th March, 2017. Subsequently, the Appellants entered into Wheeling and Banking Agreement (WBA) dated 29th March, 2017 with Respondent No. 2 for feeding the power into the grid for their captive use.

10. Even though, the power project for the Appellants was commissioned on 6th April, 2017 the Long Term Open Access (LTOA) agreements were executed by them with Respondent No. 3 only on 4th October, 2017 for transmission of power from their captive plants.

11. It appears that the power plants of the Appellants had started generating electricity on the date of commissioning i.e. 6th April, 2017 and had been injecting power into the grid since that day without waiting for formal execution of LTOA agreement. Accordingly, the Appellants raised their respective invoices seeking energy adjustment as per the Wheeling and Banking agreement (WBA) dated 29th March, 2017 for the period from 6th April, 2017 to 4th October, 2017. However, these invoices were returned by Respondent No. 4 vide letters dated 16th October 2017 and 17th October, 2017 stating that the invoices are not as per Clause 5(A) of WBA. The Respondent No. 4 also took the stand that the Appellants were not entitled to any energy adjustment for the period from 6th April, 2017 to 4th October, 2017. In doing so, the Respondent No. 4 also relied upon the undertaking dated 30th March, 2017 furnished by the Appellants at the time of seeking LTOA wherein they undertook not to claim for any adjustment and shall supply free energy generated from their captive power plants to Jodhpur Discom till the execution of LTOA.

12. In these circumstances, the Appellants had approached the Commission by way of two separate petitions bearing No. 1427 of 2018 and 1425 of 2018 respectively seeking energy adjustment with regards to the energy injected into the grid from their respective power plants between 6th April, 2017 and 4th October, 2017 along with further ancillary reliefs. A similar petition bearing No. 1428 of 2018 was also filed by another captive power generator namely M/s Radha Mohan Buil

Click Here to Read the rest of this document

2025 Supreme(Online)(APTEL) 51

APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial Member
Technocrats and Managers Society of Advanced Learning and Gramothan – Appellant
Versus
Rajasthan Electricity Regulatory Commission – Respondent
APPEAL No. 314 of 2019|APPEAL No. 320 of 2019

A captive generator cannot claim energy adjustment for power injected into the grid before formal grant of open access, where the agreement and a voluntary undertaking make such adjustment conditional.

Legal Category Hierarchy

Table of Contents

4. Under a Wheeling and Banking Agreement, does the phrase 'subject to grant of open access' condition energy adjustment on formal grant of open access?

5. Does an undertaking to supply free power until execution of LTOA preclude a later claim for compensation for that power?

6. Does Section 9(2) of the Electricity Act allow captive generators to inject power into the grid without an LTOA agreement if transmission facility is available?

7. Are prior tribunal judgments on payment for power injected without agreement applicable when the generator gave an undertaking to supply free power?

2025 Supreme(Online)(APTEL) 51

APPELLATE TRIBUNAL FOR ELECTRICITYSandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial MemberTechnocrats and Managers Society of Advanced Learning and Gramothan – AppellantVersusRajasthan Electricity Regulatory Commission – RespondentAPPEAL No. 314 of 2019|APPEAL No. 320 of 2019

A captive generator cannot claim energy adjustment for power injected into the grid before formal grant of open access, where the agreement and a voluntary undertaking make such adjustment conditional.

Legal Category Hierarchy

Table of Contents

4. Under a Wheeling and Banking Agreement, does the phrase 'subject to grant of open access' condition energy adjustment on formal grant of open access?

5. Does an undertaking to supply free power until execution of LTOA preclude a later claim for compensation for that power?

6. Does Section 9(2) of the Electricity Act allow captive generators to inject power into the grid without an LTOA agreement if transmission facility is available?

7. Are prior tribunal judgments on payment for power injected without agreement applicable when the generator gave an undertaking to supply free power?

Cases Referred (1)

APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial Member
Technocrats and Managers Society of Advanced Learning and Gramothan – Appellant
Versus
Rajasthan Electricity Regulatory Commission – Respondent
APPEAL No. 314 of 2019|APPEAL No. 320 of 2019