J U D G M E N T

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

1. M/s Gallantt Ispat Limited, (hereinafter “Appellant”) has filed the present Appeal being aggrieved by the Order dated 22.08.2019 (in brief “the Impugned Order”) passed by the Uttar Pradesh Electricity Regulatory Commission (herein after referred as “UPERC” or “State Commission”) in Petition No.1320/2018 (in short “Petition”)whereby, the State Commission has dismissed the Petition filed by the Appellant seeking exemption from installation of and billing through a ‘ lag plus lead meter ’ at the premises of the Appellant.

2. The Appellant is engaged in the business of manufacturing of iron and steel products such as sponge iron, bars, rods, billets etc. and has a co- generation power plant and enhanced its generation capacity from 18 MW to 53 MW consisting of two waste heat recovery boilers of 35 tones power hour (TPH) steam generation capacity and one fluidized bed combustion (FBC) boiler of 110 TPH besides existing FBC boiler of 50 TPH generation capacities.

3. Respondent No.1, the Uttar Pradesh Electricity Regulatory Commission was established under Section 82 of the 2003 Act to discharge the functions as are laid down in Section 86 including functions relating to regulation of electricity and is vested with the powers to adjudicate the disputes raised in the present Appeal.

4. Respondent No.2, the Uttar Pradesh Power Corporation Ltd. (in short

“UPPCL”) is responsible for electricity transmission and distribution within the State of Uttar Pradesh and for that purpose, procures power from various sources including from State/Central Government owned power generators and Independent Power Producers (IPPs) through Power Purchase Agreements entered into with them so as to ensure power supply to its consumers in a cost- effective manner.

5. The Respondent No.3 - Purvanchal Vidyut Vitran Nigam Ltd., (in short

“PUVVNL”)is one the said restructured distribution companies of Respondent

No.2 created for distribution of power in eastern area of Uttar Pradesh.

6. The Appellant claims that its generating plant produces two or more useful forms of energies, including electricity, and is thus a co-generation unit as per Section 2 (12) of the Act.

7. The Appellant entered into a Power Purchase Agreement (PPA) with Respondent No.2 for sale of 12.5 MW powerout of the total capacity of the plant whereas balance capacity is used for captive consumption.

8. Intermittently, the plant requires energy more than the capacity retained for captive use and therefore, the required electricity is drawn from the State grid, however, when operation of the plant requires less energy than the energy being generated in the plant, the resultant surplus energyis injected into the State grid.

9. The Appellant submitted that electricity exported or imported by the Appellant into or from the State Grid is billed by Respondent No.2 and 3 accordingly for their commercial gains.

10. It was however, submittedby the Appellant that there is no contractual arrangement between the Appellant and Respondent No.2 or 3 for sale or purchase of suchdrawl /injection of electricity, which is made intermittently,and is therefore utilized by Respondent Nos. 2 and 3 free of charge.

11. The Appellant submitted that while dismissing the above Petition, the Commission has failed to appreciate that the Regulations of the Central Electricity Authority (in short “CEA”) and the Uttar Pradesh Electricity Grid Code (in short “UPEGC”) do not specifically provide for the arrangement of metering in the peculiarities of the Appellant’s project and the State Commission vide its Order dated 20.10.2008 passed in Petition No.566/2008 has clarified that for co-generation units, metering should be done by way of a ‘lag only meter’ and a ‘ lag+lead logic’ meter must not be used since the ‘ lag only’ meter blocks readings of reactive ene