The court emphasized the need for rigorous justification of delays and their impact on capital costs, while allowing tariff adjustments based on permissible expense regulations.

ORDER

The Petitioner, Power Grid Corporation of India Limited (PGCIL), has filed the instant Petition for the determination of transmission tariff under the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations 2019 (hereinafter referred to as “the 2019 Tariff Regulations”) for the period from the COD to 31.3.2024 in respect of the following assets (hereinafter referred to as “the transmission assets”) under “Western Region Expansion Scheme-XXIV (WRES-XXIV)" (hereinafter referred to as “the transmission project”) in the Western Region:

Asset-1: Conversion of 240 MVAr Non-switchable Line reactor at Raipur Pooling Station (associated with Raipur Pooling Station-Champa Pooling Station 765 kV Ckt-1) into Switchable Line reactor along with NGR bypass arrangement; and

Asset-2: Conversion of 240 MVAr Non-switchable Line reactor at Raipur Pooling Station (associated with Raipur Pooling Station-Champa Pooling Station 765 kV Ckt-2) into Switchable Line reactor along with NGR bypass arrangement.

2. The Petitioner has made the following prayers in the instant Petition:

“1) Approve the DOCO as claimed in the instant petition and condone the time over run.

2) Approve the Transmission Tariff for the tariff block 2019-24 block for the assets covered under this petition, as per para –7 above.

3) Admit the capital cost as claimed in the Petition and approve the Additional Capitalization incurred/projected to be incurred.

4) Allow the petitioner to recover the shortfall or refund the excess Annual Fixed Charges, on account of Return on Equity due to a change in applicable Minimum Alternate/Corporate Income Tax rate as per the Income Tax Act, 1961 (as amended from time to time) of the respective financial year directly without making any application before the Commission as provided in Tariff Regulation 2019 as per para 8 above for respective block.

5) Approve the reimbursement of expenditure by the beneficiaries towards petition filing fee, and expenditure on the publishing of notices in newspapers in terms of Regulation 70 (1) Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019, and other expenditure (if any) in relation to the filing of the petition.

6) Allow the petitioner to bill and recover Licensee fees and RLDC fees and charges, separately from the respondents in terms of Regulation 70 (3) and (4) Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019.

7) Allow the petitioner to bill and adjust the impact on Interest on Loan due to a change in the Interest rate on account of the floating rate of interest applicable during the 2019-24 period, if any, from the beneficiaries.

8) Allow the Petitioner to bill and recover GST on Transmission Charges separately from the respondents if GST on transmission is levied at any rate in the future. Further, any taxes including GST and duties including cess, etc. imposed by any statutory/Govt./municipal authorities shall be allowed to be recovered from the beneficiaries.

9) Allow interim tariff in accordance with Regulation 10(3) of Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2019 for the purpose of inclusion in the PoC charges. and pass such other relief as the Commission deems fit and appropriate under the circumstances of the case and in the interest of justice.”

Background

3. The brief facts of the case are as under:

a. The transmission project was agreed upon to in the 3^rd Consultation Meeting for Evolving Transmission Schemes in Western Region (CMETS-WR) held on 31.1.2022. The transmission project was later taken up for approval in the 8^th NCT meeting held on 25.3.2022, wherein it was decided that the conversion of 2x240 MVAr non-switchable line reactors at Raipur Pooling Station (associated with Raipur Pooling Station-Champa Pooling Station 765 kV Ckts-1 and 2) into Switchable line reactors along with NGR bypass arrangement (earlier proposed as part of WRES-