2025 Supreme(Online)(APTEL) 53

APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, Technical Member, Virender Bhat, Judicial Member
GRIDCO Limited – Appellant
Versus
GMR Kamalanga Energy Limited (GKEL) – Respondent
APPEAL NO. 254 OF 2021 | APPEAL NO. 207 OF 2022

Headnote:(A) Electricity Act, 2003 - Sections 32, 76, 79 - Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 - Regulation 30 - Indian Electricity Grid Code (IEGC) - Clause 6.4(9) - Availability Based Tariff (ABT) - Computation of Plant Availability Factor (Monthly) (PAFM) and payment of fixed/capacity charges - Tariff Regulations have overriding effect over inconsistent contract terms - PPA clause 2.2(a) cannot override CERC Tariff Regulations; ABT regime requires payment of capacity charges based on declared availability, not actual scheduled drawal or power sent out. (Paras 54, 55, 59, 60, 62)

(B) Contract - Overriding effect of statutory regulations - Parties cannot agree contrary to law - Parties’ admission of error in prior methodology for computing PAFM (based on power sent out) after mutual correction from 01.04.2017, equity demands same correction for disputed period unless compelling constraints dictate otherwise - Minutes of Meeting inconsistent with regulations cannot be relied upon. (Paras 53, 60)

(C) Fixed/Capacity Charges - Liability of beneficiary - Capacity charges payable on basis of declared capacity made available, irrespective of actual schedule or drawal - Fixed charges compensate generator for having capacity ready and available, distinct from energy charges for actual consumption. (Paras 41, 42, 59, 87, 98)

(D) Delayed Payment Surcharge (DPS) - Liability - DPS payable on delayed payment of capacity charges if generator raised invoices for such charges and beneficiary defaulted on payment - Defence of non-scheduling or non-availability of power does not absolve beneficiary of liability. (Paras 91, 96, 98)

Facts of the case:
The appellant, a State-owned bulk supplier of electricity, and respondent no. 1, a generating company, entered into a Power Purchase Agreement (PPA) for supply of up to 25% of the installed capacity of a thermal power plant. For the period 01.04.2015 to 31.03.2017, the State Load Dispatch Centre (SLDC) computed the Plant Availability Factor (PAFM) for calculating fixed/capacity charges based on 25% of the power sent out, in line with clause 2.2(a) of the PPA, rather than on the declared capacity of the generator. The generator raised invoices for fixed charges based on its declared availability, which the appellant disputed, leading to petitions before the Central Electricity Regulatory Commission (CERC). In Minutes of Meeting dated 12.07.2017, the parties mutually recognized that the earlier methodology was inconsistent with the CERC Tariff Regulations, 2014, and agreed to adopt the regulatory methodology (based on declared availability) from 01.04.2017 onward. CERC in its order dated 04.02.2020 directed computation and payment of capacity charges based on the declared availability (original declarations) for the disputed period, and in its subsequent order dated 04.04.2022, directed execution of that order.

Findings of Court:
The Tribunal held that the correct methodology for computation of PAFM and payment of fixed/capacity charges for the disputed period is that prescribed by the CERC Tariff Regulations, 2014, i.e., based on declared capacity made available by the generator, irrespective of actual schedule or drawal. The PPA and related Minutes of Meetings are subordinate to and must yield to the overriding statutory regulations. SLDC incorrectly computed PAFM for FY 2015-16 by considering revised availability declarations instead of original declarations. The appellant cannot be absolved of liability to pay capacity charges (and DPS) for the declared capacity made available, even if not scheduled or drawn.

Issues: The main issues were (1) whether PAFM computation for the disputed period should be governed by CERC Tariff Regulations, 2014 or the PPA; (2) whether CERC erred in relying on Minutes of Meetings; (3) whether CERC incorrectly held that SLDC did not compute PAFM for FY 2015-16 based on original availability declaration; and (4) whether the appellant could be made liable to pay fixed/capacity charges and DPS.

Ratio Decidendi: The court ruled that Tariff Regulations made under the Electricity Act have overriding effect over inconsistent provisions in contracts between regulated entities, including PPA clauses and mutual agreements. Capacity charges under the ABT regime are payable based on declared availability of capacity, not on actual scheduled power or power sent out. Once an error in methodology is mutually recognized and prospectively corrected, equity demands the same correction for the past period unless compelling constraints dictate otherwise. Oral instructions by SLDC to reduce declared availability to match schedule are impermissible; original availability declarations must be considered. Result : Appeals dismissed. Orders of CERC upheld. Appellant directed to pay fixed/capacity charges as per declared capacity basis and applicable delayed payment surcharge for the disputed period 01.04.2015 to 31.03.2017. pending IAs disposed of. (Para 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 174, 175, 176, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 199, 200, 201, 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 251, 252, 253, 254, 255, 256, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266, 267, 268, 269, 270, 271, 272, 273, 274, 275, 276, 277, 278, 279, 280, 281, 282, 283, 284, 285, 286, 287, 288, 289, 290, 291, 292, 293, 294, 295, 296, 297, 298, 299, 300, 301, 302, 303, 304, 305, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 320, 321, 322, 323, 324, 325, 326, 327, 328, 329, 330, 331, 332, 333, 334, 335, 336, 337, 338, 339, 340, 341, 342, 343, 344, 345, 346, 347, 348, 349, 350, 351, 352, 353, 354, 355, 356, 357, 358, 359, 360, 361, 362, 363, 364, 365, 366, 367, 368, 369, 370, 371, 372, 373, 374, 375, 376, 377, 378, 379, 380, 381, 382, 383, 384, 385, 386, 387, 388, 389, 390, 391, 392, 393, 394, 395, 396, 397, 398, 399, 400, 401, 402, 403, 404, 405, 406, 407, 408, 409, 410, 411, 412, 413, 414, 415, 416, 417, 418, 419, 420, 421, 422, 423, 424, 425, 426, 427, 428, 429, 430, 431, 432, 433, 434, 435, 436, 437, 438, 439, 440, 441, 442, 443, 444, 445, 446, 447, 448, 449, 450, 451, 452, 453, 454, 455, 456, 457, 458, 459, 460, 461, 462, 463, 464, 465, 466, 467, 468, 469, 470, 471, 472, 473, 474, 475, 476, 477, 478, 479, 480, 481, 482, 483, 484, 485, 486, 487, 488, 489, 490, 491, 492, 493, 494, 495, 496, 497, 498, 499, 500, 501, 502, 503, 504, 505, 506, 507, 508, 509, 510, 511, 512, 513, 514, 515, 516, 517, 518, 519, 520, 521, 522, 523, 524, 525, 526, 527, 528, 529, 530, 531, 532, 533, 534, 535, 536, 537, 538, 539, 540, 541, 542, 543, 544, 545, 546, 547, 548, 549, 550, 551, 552, 553, 554, 555, 556, 557, 558, 559, 560, 561, 562, 563, 564, 565, 566, 567, 568, 569, 570, 571, 572, 573, 574, 575, 576, 577, 578, 579, 580, 581, 582, 583, 584, 585, 586, 587, 588, 589, 590, 591, 592, 593, 594, 595, 596, 597, 598, 599, 600, 601, 602, 603, 604, 605, 606, 607, 608, 609, 610, 611, 612, 613, 614, 615, 616, 617, 618, 619, 620, 621, 622, 623, 624, 625, 626, 627, 628, 629, 630, 631, 632, 633, 634, 635, 636, 637, 638, 639, 640, 641, 642, 643, 644, 645, 646, 647, 648, 649, 650, 651, 652, 653, 654, 655, 656, 657, 658, 659, 660, 661, 662, 663, 664, 665, 666, 667, 668, 669, 670, 671, 672, 673, 674, 675, 676, 677, 678, 679, 680, 681, 682, 683, 684, 685, 686, 687, 688, 689, 690, 691, 692, 693, 694, 695, 696, 697, 698, 699, 700, 701, 702, 703, 704, 705, 706, 707, 708, 709, 710, 711, 712, 713, 714, 715, 716, 717, 718, 719, 720, 721, 722, 723, 724, 725, 726, 727, 728, 729, 730, 731, 732, 733, 734, 735, 736, 737, 738, 739, 740, 741, 742, 743, 744, 745, 746, 747, 748, 749, 750, 751, 752, 753, 754, 755, 756, 757, 758, 759, 760, 761, 762, 763, 764, 765, 766, 767, 768, 769, 770, 771, 772, 773, 774, 775, 776, 777, 778, 779, 780, 781, 782, 783, 784, 785, 786, 787, 788, 789, 790, 791, 792, 793, 794, 795, 796, 797, 798, 799, 800, 801, 802, 803, 804, 805, 806, 807, 808, 809, 810, 811, 812, 813, 814, 815, 816, 817, 818, 819, 820, 821, 822, 823, 824, 825, 826, 827, 828, 829, 830, 831, 832, 833, 834, 835, 836, 837, 838, 839, 840, 841, 842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 854, 855, 856, 857, 858, 859, 860, 861, 862, 863, 864, 865, 866, 867, 868, 869, 870, 871, 872, 873, 874, 875, 876, 877, 878, 879, 880, 881, 882, 883, 884, 885, 886, 887, 888, 889, 890, 891, 892, 893, 894, 895, 896, 897, 898, 899, 900, 901, 902, 903, 904, 905, 906, 907, 908, 909, 910, 911, 912, 913, 914, 915, 916, 917, 918, 919, 920, 921, 922, 923, 924, 925, 926, 927, 928, 929, 930, 931, 932, 933, 934, 935, 936, 937, 938, 939, 940, 941, 942, 943, 944, 945, 946, 947, 948, 949, 950, 951, 952, 953, 954, 955, 956, 957, 958, 959, 960, 961, 962, 963, 964, 965, 966, 967, 968, 969, 970, 971, 972, 973, 974, 975, 976, 977, 978, 979, 980, 981, 982, 983, 984, 985, 986, 987, 988, 989, 990, 991, 992, 993, 994, 995, 996, 997, 998, 999, 1000, 1001, 1002, 1003, 1004, 1005, 1006, 1007, 1008} - Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 - Regulation 30 - Indian Electricity Grid Code - Availability Based Tariff - Plant Availability Factor - Contract interpretation - Retrospective application - Declared capacity vs. scheduled energy - Fixed charges - Capacity charges - Delayed payment surcharge - Minutes of Meeting - Electricity dispute resolution.

JUDGEMENT

PER HON’BLE MR. SANDESH KUMAR SHARMA, TECHNICAL MEMBER

1. M/s. GRIDCO Limited has filed these Appeals, challenging the Impugned Order dated 04.02.2020 in Petition No. 115/MP/2019 and Impugned Order dated 04.04.2022 in Petition No. 498/MP/2020, passed by the Central Electricity Regulatory Commission (in short “CERC” or “Central Commission”).

2. The Order dated 04.04.2022 was passed against the Petition filed by Respondent No. 1 seeking execution of the Order dated 04.02.2020 passed by CERC. Accordingly, both the captioned appeals challenge the identical issues and therefore are tagged together.

Description of the Parties

3. The Appellant, GRIDCO Limited, is a wholly owned Company of the Government of Odisha and is carrying on the function of Bulk Supply of Electricity to four Distribution Companies in the State of Odisha with effect from 01.04.2005.

4. Respondent No. 1, GMR Kamalanga Energy Limited (GKEL), is a subsidiary of GMR Energy Limited, part of the GMR Group that owns and operates a 1050 MW coal-based thermal power plant in Kamalanga village, Dhenkanal district, Odisha.

5. Respondent No. 2, State Load Dispatch Centre (in short “SLDC”), is a wholly-owned subsidiary of Odisha Power Transmission Corporation Ltd (in short “OPTCL”). SLDC's primary function is to ensure the reliable and efficient operation of the state's power grid.

6. Respondent No. 3 is the Central Electricity Regulatory Commission, established under section 76 of the Electricity Act, 2003, having been vested with the powers under section 79 of the Electricity Act, 2003 (in short “Act”) inter alia to resolve the dispute herein.

Factual Matrix (in Appeal No. 254 of 2021) (As submitted by the Appellant)

7. Government of Odisha signed a Memorandum of Understanding dated 09.06.2006 with GMR-Kamalanga Energy Limited (GKEL), Respondent No. 1 herein, for setting up a 1000 MW Thermal Power Plant in the State of Odisha. Subsequently, the capacity of the Project was increased to (4X350 MW) 1400 MW vide MOU dated 28.10.2010.

8. As per the principal MOU and Revised PPA 04.01.2011, the contracted capacity of power entitlement for the State of Odisha, to be supplied to the State Designated Entity, i.e., GRIDCO, was upto 25 % of the installed capacity of the Thermal Power Station and have the right to purchase on behalf of Government of Odisha upto 25% of the power sent out from the Thermal Power Station.

9. The details of the date of synchronisation and COD of each of the Units of GKEL having installed capacity of 3X350 MW are mentioned below:

:

S. No.	Unit No.	Date of Synchronisation of Units	Date of Commercial Operation of Units (COD)
1	#1 (350MW)	27.01.2013	30.04.2013
2	#2 (350MW)	09.07.2013	12.11.2013
3	#3 (350MW)	08.03.2014	25.03.2014

10. GRIDCO has procured all Infirm Power from all three Units of GKEL as per the provision of the existing Power Purchase Agreement 04.01.2011 and Firm/Scheduled power from the date of Commercial Declaration of the Thermal Units as per the provision of PPA and final schedule of GKEL by SLDC.

11. During synchronisation and COD declaration, all three Units were connected with STU through LILO connectivity. Thereafter, all three Units were connected at CTU. Subsequently, after the construction of the Dedicated Transmission Line to STU, Unit #3(350 MW) was connected with STU at Meramundali through a 400 KV Single Circuit Transmission Line with effect from 18.03.2015.

12. Till the time the first tariff order was passed by CERC on 12.11.2015 in Petition No.77/GT/2013, GKEL was supplying power to GRIDCO at the provisional Tariff fixed by OERC in the Annual Revenue Requirement (ARR) orders of GRIDCO from time to time. The Energy Accounting was carried out based on the Minutes of Meeting (MoM) dated 05.04.2014 and 10.03.2015, signed by GKEL, SLDC, and GRIDCO, and during the disputed period MoM dated 10.03.2015 was effective.

13. Permission for Short Term Open Access was given by GRIDCO vide letter dated 29.05.2015. Subsequently, vide letter dated 04.07.2015, GKEL ac

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