JUDGEMENT

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

1. The captioned appeal has been filed by M/s. Tamil Nadu Generation and Distribution Corporation Ltd. (in short “TANGEDCO”) inter alia challenging the Impugned Order dated 21.08.2018 passed by the Tamil Nadu Electricity Regulatory Commission (in short “TNERC” or “Commission”) in L.P. No. 1 of 2017.

Description of the Parties

2. The Appellant, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) is the distribution licensee for the State of Tamil Nadu and is wholly owned by the State Government and is the successor of the erstwhile Tamil Nadu Electricity Board, formed pursuant to its unbundling under a transfer scheme, in terms of Section 131 of the Electricity Act, 2003.

3. The Respondent No. 1, the Tamil Nadu Electricity Regulatory Commission (TNERC), established under Section 82 of the Electricity Act, 2003, inter alia, is the appropriate Commission to adjudicate the issue.

4. The Respondent No. 2 is the Tuticorin Electricity Supply Private Limited (in short “TESPL” or “R-2”), which is a private company engaged in the production, collection, and distribution of electricity.

Factual Matrix of the Case

5. This appeal has been filed by the Appellant (TANGEDCO) against the order dated 21.08.2018 passed by the Tamil Nadu Electricity Regulatory Commission in L. P. No. 1 of 2017. The Appellant contended that the TNERC failed to appreciate that there is no amendment carried out under the Electricity Act, amending section 14 of the Act, 2003.

6. Further contended that the Notification under Sub-Section (1) of Section 49 of the SEZ Act cannot insert a proviso to a section under the Electricity Act, which is a special Act enacted by the Parliament. There needs to be an amendment to the Act of 2003, duly validated by Parliament. There is no amendment to Section 14 of the Electricity Act, 2003, and the Act remains the same.

7. Also argued that the Regulations and tariff orders make payment of cross- subsidy charges mandatory by all consumers of the distribution licensee, including the open access consumers. The SEZ developer is an open-access consumer of the Appellant. The SEZ developer is connected to the distribution network of the distribution licensee. The notification does not exempt anyone connected to the distribution network of the distribution licensee from payment of the cross-subsidy surcharge.

8. It is in the above circumstances that the findings of TNERC aggrieve the Appellant in the impugned order and has preferred the present Appeal.

Written Submissions of the Appellant, TANGEDCO

9. The Appellant, TANGEDCO, has challenged the Order dated 21.08.2018 passed by the TNERC in Petition L.P. No. 1 of 2017. The said Petition was filed by Tuticorin Electricity Supply Private Limited (formerly India Power Corporation (Tuticorin) Private Limited), seeking formal recognition as a deemed distribution licensee under Section 14 of the Electricity Act, 2003, read with the Ministry of Commerce and Industry’s Notification dated 03.03.2010 concerning Special Economic Zones (SEZs).

10. By the impugned Order, TNERC held that Respondent No. 2 is a deemed distribution licensee with effect from 17.04.2017 in respect of the SEZ notified by Notification No. S.O. 2690(E) dated 18.11.2008, covering an area of 1019.22.5 hectares in various villages of Tirunelveli District, Tamil Nadu.

Brief Factual Background:

11. On 24.06.2005, TNERC enacted the TNERC (Licensing) Regulations, 2005 to establish a structured and transparent process for granting transmission and distribution licences in Tamil Nadu, aimed at promoting efficiency, competition, and consumer protection.

12. Subsequently, on 23.05.2007, the Ministry of Commerce and Industry issued a Letter of Assurance to Tamil Nadu Industrial Development Corporation Limited (TNIDCL) for setting up a multi-product SEZ in Tirunelveli district. Upon TNIDCL’s request, on 28.08.2008, the Central Government approved the transfer of SEZ rights to AM