1. Appeal against order setting aside late payment surcharge invoice — Dispute over trigger period under PPA vs tariff regulations. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 )
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APPELLATE TRIBUNAL FOR ELECTRICITY
Sandesh Kumar Sharma, TM, Virender Bhat, JM
M/s Rosa Power Supply Co. Ltd. – Appellant
Versus
Uttar Pradesh Power Corporation Limited (UPPCL); Uttar Pradesh Electricity Regulatory Commission (UPERC) – Respondent
APPEAL No.107 OF 2020
1. Appeal against order setting aside late payment surcharge invoice — Dispute over trigger period under PPA vs tariff regulations. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 )
2. Contention that tariff regulations override PPA terms; appellant argued PPA binding, respondent argued regulations take precedence. (Para 14 , 16 , 18 , 21 , 24 , 26 , 27 , 28 )
No, the commission must direct parties to adhere to the contractual dispute resolution process before adjudicating the dispute. (Para 19 , 20 )
No, each invoice creates a fresh cause of action; a petition filed from the latest invoice is within limitation. (Para 22 , 23 )
No, acquiescence does not apply because each invoice is independent and payment does not waive the right to challenge later ones. (Para 25 )
No, unless the regulation expressly provides, existing PPAs continue to bind parties; subsequent regulations apply only prospectively to contracts made after their effective date. (Para 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49 , 51 , 52 )
Late payment surcharge is not part of tariff; it is a contractual term to compensate for delayed payment and outside the regulatory commission's tariff-making powers. (Para 53 )
JUDGMENT
PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER
1. The appellant M/s Rosa Power Supply Co. Ltd. is aggrieved by the order dated 04.05.2020 passed by 2nd respondent Uttar Pradesh Electricity Regulatory Commission (hereinafter referred to as the Commission) in petition no.1437/2019 filed by 1st respondent Uttar Pradesh Power Corporation Limited (in short UPPCL) seeking setting aside of invoice dated 04.01.2019 raised by appellant in respect of Late Payment Surcharge (LPSC) for the period April, 2015 to January, 2018.
2. Vide the said invoice dated 04.01.2019 the appellant had sought to levy LPSC from the 1st respondent for non-payment of electricity dues within the period of 30 days from the date of bills / invoices raised by the appellant, as provided in the Power Purchase Agreement dated 12.11.2006 executed between it and UPPCL and under UPERC (Terms and Conditions of Generation Tariff) Regulations, 2004. However, the Commission has opined that the invoice has been raised by the appellant in contravention of UPERC Generation Tariff Regulations, 2014 which prescribes 60-day trigger period for levy of LPSC and while observing that the 2014 Regulations override pre- existing contractual relationship also between the parties, it has set aside the said invoice.
3. A brief conspectus of the facts of the case giving rise to the instant appeal is as under.
4. The appellant owns and operates a 1200MW coal based thermal power plant at Rosa in the State of Uttar Pradesh which comprises of two stages of 2x300MW each. The appellant has executed a Power Purchase Agreement (PPA) dated 12.11.2006 with the 1st respondent for supply of 100% power generated by the said power project. This Power Purchase Agreement was with regards to Stage-1 (2x300MW) of the power project which had achieved commercial operation on 30.06.2010. The Power Purchase Agreement was duly approved by the Commission vide order dated 08.11.2006 in petition no.306/2006.
5. With regards to the Stage-2 (2x300MW) of the power project, which achieved commercial operation on 01.04.2012, Supplementary PPA dated 11.09.2009 had been executed between the parties. It was later on amended on 19.11.2011. The PPA was duly approved by the Commission vide order dated 10.06.2009 in petition no.610/2009.
6. The Power Purchase Agreement dated 12.11.2006 was executed during the period when UPERC Tariff Regulations, 2004 were in force. Regulation 26 of these regulations is with regards to the LPSC and provided as under: -
“26. Late Payment Surcharge: In case the payment of bills of capacity charges and energy charges by the beneficiary (ies) is delayed beyond a period of 1 month from the date of billing, a late payment surcharge at the rate of 1.25% per month shall be levied by the generating company.”
7. As per Article 1 of the PPA, due date shall mean the 30th day after the receipt of invoice in relation to any amount payable by UPPCL. Section 12.17 under Article 12 of the PPA is in respect of the rebates and late payment charges. The same is extracted hereinbelow: -
“Section 12.17 Rebates, Late Charges
(a) For payment of bills of Fixed Charges and Variable Charges through a Letter of Credit on presentation, a rebate of 2% shall be allowed. If the payments are made by a mode other than through the Letter of Credit, but within a period of one month of presentation of bills by ROSA, the rebate of 1% shall be allowed.
(b) In case the payment of bills of Fixed Charges and Variable Charges by UPPCL is delayed beyond a period of 1 month from the date of billing, a late payment surcharge at the rate of 1.25% per month shall be levied by ROSA on the outstanding amount of the bills and payable by UPPCL.”
8. Thus, in terms of Section 12.17 of the PPA, which is in tune with Regulation 26 of UPERC Tariff Regulations, 2004, period of one month was available to UPPCL for making payment of bills to the appellant and in case of failure to do so, LPSC was leviable by the appellant @ 1.25% per month on the outstand
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