Petition No 971 of 2014 and application in Petition No 903 of 2013
BEFORE
THE UTTAR PRADESH ELECTRICITY REGULATORY COMMISSION
LUCKNOW
Date of Order : 27.01.2015
PRESENT:
1. Hon’ble Sri Desh Deepak Verma, Chairman
2. Hon’ble Smt Meenakshi Singh, Member
3. Hon’ble Sri Indu Bhushan Pandey, Member
IN THE MATTER OF: Approval of Power Purchase Agreement with M/s Dhariwal Infrastructures Ltd. for procurement of 187 MW power for a period of 15 years.
AND
IN THE MATTER OF
Noida Power Company Limited
Commercial Complex,
H-Block, Alpha-II Sector
Greater Noida - 201308
------Petitioner
The following were present:
1. Sri M. G. Ramchandran, Advocate, NPCL
2. Sri R. C. Agarwala, M.D. & CEO, NPCL
3. Sri Alok Sharma, Manager Legal, NPCL
4. Sri Rajiv Goyal , GM-Project & Power Trading, NPCL
5. Sri Sanjeev Kapoor, Advocate, NPCL
6. Sri Prateek Kumar, Advocate, NPCL
7. Sri A.K. Arora, Resident Manager, NPCL
8. Sri Madan Gupta, M.D., Dhariwal Intra, Ltd.
9. Sri Subir Saha, G.M., DIL
10. Sri Suman Ghosh, GM , RPSG Group for DIL
AND
IN THE MATTER OF: Application dated 12.11.2014 in petition no 903 of 2013.
Noida Power Company Limited (NPCL)
Commercial Complex,
H-Block, Alpha-II Sector
Greater Noida - 201308
------Petitioner
Essar Power (Jharkhand) Limited (EPJL),
Prakash Deep Building, 10th Floor
7, Tolstoy Marg, New Delhi -110001
------Respondent
Order
(Date of Hearing 21.11. 2014)
1. Noida Power Company Limited (NPCL) entered into a Power Purchase Agreement (PPA) dated 09.05.2012 with Essar Power (Jharkhand) Limited (EPJL), a power generating company, setting up a 1800 MW thermal power plant in Tehsil Chandwa, District Latehar, Jharkhand, for purchase of 240 MW of electricity. The tariff under PPA was adopted by the Commission U/s 63 of the Act, vide order dated 4.9.2012 in petition no. 741 of 2011, which was discovered through a transparent process of Case-1 competitive bidding. Subsequently a petition no. 903 of 2013 was filed by EPJL on disputes came up between the parties. The petition was disposed of by the Commission on 30.05.2014 with the observations as follows:
“The PPA had ensured supply of electricity to the consumers of specified licensed area w.e.f. 30.4.2014 which has been hampered and the shortage of supply is being mitigated through short term purchases of electricity. This can not be a solution for long term as in this manner, the electricity procured may be at a higher price than as envisaged through the long term PPA. The reasons discussed above have been unforeseen. So, in such a situation it becomes mandatory for NPCL, being the distribution licensee of the area, to think the possibilities to ensure the requisite quantum of electricity to the consumers on long term basis. Therefore, the Commission directs NPCL to seriously consider the issue of ensuring long term supply of power to the consumers of their area within the existing provisions and bring that proposal to the Commission, which may be lasting and long term.
The Commission further considers that in view of the shortage of power in the State, the reasonable tariff tied up through the subject PPA and the willingness of the parties for an equitable and reasonable solution, it may also be just and proper for the parties to consider entering into a fresh contract, if the present PPA is not continued, on the same terms conditions and tariff except the change in source of generation. However, in such a situation, the modalities would require to be discussed afresh.”
2. Subsequently, NPCL’s applications dated 22.06.2014 & 16.07.2014 in the petition no. 903 of 2013 were disposed of by the Commission vide order dated 1.9.2014 as below:
“Subsequently, this application has been filed by NPCL on 16.7.2014 praying to issue directions on the aspects of the issues raised by EPJL vide letters dated 27.6.2014 & 7.7.2014. NPCL has also prayed to allow them to procure long term power from other available alternate sources on immediate basis to ensure supply to its consumers.
NPCL has stated that in compliance to the Commission’s order dated 30.5.2014 the bank guarantee of Rs. 72 crores has been restored which would expire on 31.8.2014. NPCL has submitted that in the meanwhile EPJL vide letter dated 27.6.2014 and 7.7.2014 informed that:
i. EPJL would not be able to supply in near foreseeable future.
ii. Due to transmission constraint, alternate supply from Mahan project would not be feasible in near foreseeable future.
iii. There is no reason in continuing the PPA dated 9.5.2012 in view of constraints in Ashok Karkatta Coal Block.
iv. Refund of Rs. 72 crores without any interest or other cost.
v. NPCL may approach the Commission for procurement of power from other sources.
During the hearing, the Commission asked EPJL about their affidavit dated 2.4.2014 for commitment of supply from their 600 MW Mahan project. EPJL could only give the reasons of transmission constraints which was prima facie not accepted by the Commission. The Commission took a view that first of all EPJL has to extend its bank guarantee initially for three months, further extendable by another six months as no one could be allowed to escape from its commitments in a situation when there is shortage of power in the State.
The Commission further considered that since the process has taken more than the required period, resulting in the shortage of power for supply to the consumers of the licensed area, it would be prudent and necessary that NPCL should explore other possibilities of getting long term supply contract through the competitive route within these six months.”
3. In compliance to the Commission’s orders dated 30.5.2014 and 1.9.2014, NPCL filed long term PPA dated 26.9.2014 for approval of the Commission for purchase of 187 MW power from M/s Dhariwal Infrastructure Ltd. in petition no 971 of 2014 U/s 62 read with 86(1)(b) of the Electricity Act, 2003. NPCL also filed an application dated 12.11.2014 for extension of BG of EPJL which was expiring on 30.11.2014. An intervention application as short submission dated 24.11.2014 was filed by EPJL in this matter of petition no.971 of 2014. Replying to EPJL’s submissions dated 22.12.2014, NPCL submitted that EPJL had no say in the matter particularly in the context of the failure of EPJL to fulfill the terms and conditions contained in PPA dated 9.5.2012 as well as not taking any step in pursuance to the Commission’s order dated 30.5.2014 in petition no. 903 of 2013. On 28.12.2014, EPJL filed an application requesting to take appropriate action against NPCL for contravening Hon’ble Commission’s order dated 1.9.2014 wherein NPCL was directed to explore possibilities of getting long term supply contract through the competitive route within six months. EPJL has filed this application u/s 142 of the Electricity Act, 2003.
4. As the two issues brought under the application in petition no. 903 of 2013 and in petition no. 971 of 2014 were connected, the Commission decided to dispose of both the petitions by a common order.
5. During the hearing on 21.11.2014, Sri M. G. Ramchandran, learned Advocate, NPCL requested that since the BG was expiring on 30.11.2014 and the Hon’ble Commission had taken view for its further extension, EPJL might be directed for immediate extension of BG. The arguments were made by both the parties in the subject matter. Vide order dated 28.11.2014, the Commission directed EPJL to extent the BG for one month for the time being. Further, in continuation of order dated 28.11.2014, the Commission directed EPJL to extend the BG for one more month i.e. upto 31.1.2015 vide order dated 22.12.2014. During the hearing, learned advocate of NPCL Sri M.G. Ramchandran further cited the orders of DERC dated 30.04.2009 in petition no. 60 of 2008 and of Hon’ble APTEL dated 31.3.2010 in Appeal No. 106 &107 of 2009 in support of their PPA entered through MoU route and not through the competitive route.
6. It is observed that both the citations mentioned by the learned counsel are from the period before 5.1.2011 after which no MoU route long term agreement has been allowed by this Commission in line with MoP guidelines. Although NPCL has made some effort to tie up power through long term but despite clear directions from the Commission for long term supply contract through the competitive route, it has opted the MoU route. The Commission does not find any reason to consider such PPA in wake of the fact that for long term power purchase only competitive route is available and hence disallows the subject PPA. With this the issues of EPJL for intervention and non - compliance are suo moto disposed of and require no further discussion. The Commission is constrained to observe that the delay in compliance of the Commission’s orders has been on the part of NPCL. However, the Commission directs further extension of BG for one month as a last opportunity and expects NPCL to take concrete steps for long term PPA through bidding route.
7. NPCL is directed to initiate the bid process under new case-1 bidding guidelines immediately. In this regard NPCL shall submit monthly progress report to the Commission. During this period, NPCL may procure requisite quantum of power through short term for which it would require to file separate petition. The matters are disposed of.
(Indu Bhushan Pandey) (Meenakshi Singh) (Desh Deepak Verma)
Member Member Chairrman
Place : Lucknow
Dated: 27.01.2015
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