The appellant initially filed a petition under Section 86(1)(f) of the Act, 2003 and sought the following reliefs:- (a) direct the Respondent to make the payment of Rs.25.63 Crores towards fixed charges and Rs.8.10 Crores towards payment due on the actual variable charges payable in respect of the power generated and availed for 153.26 millions unit during the period 29.10.2005 to 30.06.2006 to the Petitioner.
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(d) direct the respondent to take immediate decisions on the use of Naphtha or any other compatible fuel as alternate/ supplemental fuel to increase and maintain the PLF of the plant as contemplated in the amending PPA dated 25.08.2004 in future thereby enabling the plant being operated at optional level so as to ensure the advantage to the Respondent and also the assured return to the Petitioner. The Tamil Nadu Electricity Regulatory Commission thereby disposed of the petition by order dated 30 December 2011, rejecting the claim of the appellant relating to unpaid fixed charges of Rs.18.06 under Combined Cycle Operation as well as the claim of underpaid variable charges of Rs.
Therefore, there is no infirmity in the findings of the State Commission in not agreeing to interfere with the provisions of the PPA declaring the unworkable PPA with regard to compensation for fixed charges for the above period due to shortage of supply of gas. Summary of Our Findings i)
The Appellant is not entitled to payment of full fixed charges and actual variable charges in respect of supply of energy between 1.7.2006 to 15.6.2009 when the operational parameters were affected on account of shortage supply of gas by M/s GAIL in view of non availability of any provision in this regard in the PPA or Tariff Regulations.
Learned counsel further submits that there was sufficient evidence on record regarding the communication between Gas Authority of India Limited(GAIL) and the Board in reference to the diversion of gas to other generating stations and this has seriously impaired the functionality and efficiency of the appellant company. Learned counsel further pressed that even in the absence of PPA not been approved and enforceable, still the compensation payable to the appellant ought to be computed as per the tariff fixed by the Commission for open market purchases by Board, or at least in accordance with the relevant regulations and this being the manifest error which the Tribunal has committed in rejecting the claim of the appellant needs to be interfered by this Court. Learned counsel further submits that the shortfall in PLF and increase in tariff heat rate was due to two factors, (i) poor efficiency of the power plant; and (ii) short supply of natural gas by fuel supplier(GAIL).
The PLF achieved by the appellant’s power plant for the period between 1 July, 2006 and 1 July, 2009 is as under:- Period Concerned PLF Achieved 1 July, 2006 to 30 June, 2007 80.82% 1 July, 2007 to 30 June, 2008 73.20% 1 July, 2008 to 1 July, 2009 67.09% 12.
In addition, learned counsel further submits that PPA was entered into between the parties based on notification of Government of India dated 6 November, 1995. There is a bi-partite agreement executed between appellant and the GAIL, to which the respondent Board is not privy, and if any default has been committed by GAIL in supply of natural gas to the appellant, the respondent Board is not supposed to indemnify, that apart, there is nothing on record to show that any remedial action was taken by the appellant against the gas supplier on account of short supply of gas, if permissible under the law. The thrust of submission of learned counsel for the appellant that it is the respondent Board who have sent letters to the GAIL to divert the gas to other generating units of the Board, at least on this account, the Board could not have made the appellant to suffer by citing the terms of the PPA. The State Electricity Board will not take any fuel supply risk.”
In terms of the notification referred to above, it is clear that the responsibility of fuel linkage – either heavy fuel or natural gas – would be that of the appellant to the generator. The submission made by learned counsel for the appellant that because of the diversion of gas to the other generating stations of the Board, at least on this account, the Board could not have made the appellant to suffer by citing the terms of PPA, on the first blush appears to be attractive but has no legs to stand for the reason that in the absence of there being any provision for compensation for capacity charges and variable charges due to the fact that the plant was not able to maintain the normative availability/PLF on account of shortage of fuel in terms of the Central Government’s Tariff Regulations, 2004, at least the respondent Board cannot be said to be at fault and that was the reason prevailed upon the Commission to arrive at the conclusion that the appellant was not entitled to payment of fuel fixed charges and actual variable charges in respect of supply of energy between 1 July, 2006 and 15 June, 2009 during the period when partial parameters were rejected because of shortage of supply in view of the provision in PPA or tariff regulations.
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Pending application(s), if any, shall stand disposed of.
Case Title: M/S PENNA ELECTRICITY LTD.(NOW M/S PIONEER POWER LTD.) Vs. TAMILNADU ELECTRICITY BOARD (2023 INSC 235)
Case Number: C.A. No.-000706-000706 / 2014
