POWER GRID CORPORATION OF INDIA LTD. AND ORS. Vs. SAMALKOT POWER LTD. AND ORS.
CENTRAL ELECTRICITY REGULATORY COMMISSION
Power Grid Corporation Of India Ltd. And Ors.
Samalkot Power Ltd. And Ors.
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(1.) THE Central Transmission Utility (CTU) had filed Petition No. 154/2011 for granting regulatory approval in the development and execution of certain identified transmission systems for evacuation of power from various planned generation projects promoted by different developers. Regulatory approval was granted by the Commission vide its order dated 13.12.2011 and included implementation of the 'Transmission system associated with IPPs of Vemagiri Area -Package -A' for evacuation of power from the generation projects of Spectrum Power Generation Limited (SPGL) and Samalkot Power Limited (SPL). The said order for regulatory approval clearly provided that the transmission system would be developed in phases matching with the progress of the generation projects.
(2.) IT was decided in the Empowered Committee on 'Transmission Planning that the Transmission system associated with IPPs of Vemagiri Area -Package -A' (hereinafter 'the Transmission Project') would be executed through the Tariff Based Competitive Bidding route. Government of India, Ministry of Power (MoP) vide its Resolution No. 11.5.2005 -PG (i) dated 17.4.2006 notified the 'Tariff based Competitive Bidding Guidelines for Transmission Service' (hereinafter referred to as "the Guidelines") under Section 63 of the Electricity Act, 2003. In accordance with these Guidelines, REC Transmission Project Company Limited (hereinafter referred to as 'RECTPCL') was notified by MoP vide letter No. 15.1.2011 -Trans dated 16.3.2011 as the Bid Process Coordinator (BPC) for the purpose of selection of the Transmission Service Provider (TSP) for the Transmission Project through a tariff based competitive bidding process. Vemagiri Transmission System Ltd. was incorporated on 20.4.2011 under the Companies Act, 1956 as a wholly owned subsidiary of RECTPCL. The scope of the Transmission Project was as under:
Rectpcl as the Bid Process Coordinator completed the bidding process on 20.3.2012 as per the Guidelines. On the basis of the competitive bidding, M/s. Power Grid Corporation of India Limited (PGCIL) was selected as the successful bidder having quoted the lowest levelised transmission charges to establish the Transmission Project on build, own, operate and maintain basis and provide transmission service to Samalkot Power Limited and Spectrum Power Generation Limited (hereinafter "Long -Term Transmission Customers" or LTTC). A Transmission Service Agreement was entered into between the Long Term Transmission Customers and Vemagiri Transmission Company Limited on 15.12.2011. In compliance with the requirements in the Request for Proposal, PGCIL furnished Contract Performance Guarantee to Samalkot Power Limited (Rs. 22.31 crore) and Spectrum Power Limited (Rs. 13.69 crore) and thereafter acquired Vemagiri Transmission Company Limited. The entire equity of Rectpcl in Vemagiri Transmission Company Limited was acquired by PGCIL on 18.4.2012 on payment of Rs. 18,27,93,533 crore. PGCIL filed Petition No. 127/2012 under Section 63 of the Act for adoption of tariff and Petition No. 128/TL/2012 under Section 14 of the Act for grant of licence to Vemagiri Transmission Company Limited for implementation of the Transmission Project.
(3.) DURING the pendency of the Petitions No. 127/2012 and 128/TL/2012, Spectrum Power Generation Ltd. (SPGL), which is one of the LTTCs of the project filed Petition No. 156/MP/2012 on 10.7.2012. SPGL averred in the said petition that MoP in its letter dated 14.3.2012 notified the following for information of all gas based project developers:
"As per information made available by MoP & NG regarding NELP gas, the production is likely to go down by 15.03 mmscmd in 2012 -13 and additional 3.42 mmscmd in 2013 against the availability of 42.67 mmscmd of gas in 2011 -12. MoP & NG has not given any projections for the years 2014 -15 and 2015 -16, additional domestic gas was unlikely to be available till the year 2015 -16.
It is evident from the above that no additional domestic gas is likely to be available till 2015 -16. Hence developers are advised not to plan projects based on domestic gas till 2015 -16. The same may be placed on the website of CEA also. When MoP & NG indicates availability of gas, developers will be intimated."
CEA posted the above in its website vide letter dated 19.3.2012. SPGL has submitted that as soon as it became aware of the non -availability of domestic gas, it requested PGCIL vide its letter dated 30.3.2012 not to take further action for execution of the transmission system based on the LTA Agreement and the Transmission Service Agreement and return the Bank Guarantee of Rs. 67.50 crore. SPGL vide its letter dated 6.4.2013 requested RECTPCL to cancel the Transmission Service Agreement with RECTPCL. After the Vemagiri Transmission Company Limited was acquired by PGCIL on 18.4.2012, SPGL vide its letter dated 7.6.2012 requested for cancellation of the TSA and to stall the bidding process. SPGL has submitted that PGCIL and RECPTCL have failed to respond to its notices of termination. SPGL has sought the following directions:
"(a) Terminate the Agreement for Bulk Power Transmission Agreement between PGCIL and the applicant with three others entered on 24.12.2010;
(b) Direct PGCIL to return the Bank Guarantee of Rs. 67.50 crore (Rupees Sixty Seven crore and Fifty Lakh) issued by ICICI Bank Limited dated 15.6.2011 furnished by the applicant to PGCIL; and
(c) Terminate the Tri -partite Transmission Service Agreement dated 15.12.2011, entered by Spectrum Power Generation Ltd. with Vemagiri Transmission System Ltd. and Smalkot Power Ltd.";
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