POWER GRID CORPORATION OF INDIA LIMITED Vs. MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED
LAWS(ET)-2015-8-12
CENTRAL ELECTRICITY REGULATORY COMMISSION
Decided on August 17,2015

POWER GRID CORPORATION OF INDIA LIMITED Appellant
VERSUS
MAHARASHTRA STATE ELECTRICITY DISTRIBUTION COMPANY LIMITED Respondents

JUDGEMENT

- (1.) THIS order is being issued for implementing the judgment of the Appellate Tribunal for Electricity dated 12.9.2014 in Appeal No. 257 of 2013.
(2.) THE background of this case is that the Board of Directors of PGCIL vide letter dated 25.2.2008 accorded the investment approval for establishment of the scheme "Western Region System Strengthening Scheme -VI", to be executed within a period of 33 months from the date of investment approval, i.e. by December 2010. PGCIL filed Petition No. 109/TT/2012 covering two assets (out of eight assets covered under the said scheme), namely "ICT III at 400/220 kV Pune Sub -station along with associated bays" (hereinafter referred as to "Asset -1") and Combined Assets of ICT III at 400/220 kV Pune Sub -station along with associated bays and ICT III at Wardha Sub -station along with associated bays (hereinafter referred as to "Asset -2"). Asset -1 and Asset -2 were commissioned on 1.11.2011 and 1.1.2012 respectively, after a delay of 11 months and 13 months. The transmission tariff in Petition No. 109/TT/2012 was approved by the Commission by its order dated 1.8.2013. While approving the transmission tariff, the Commission disallowed 50% of Interest During Construction (IDC) and Incidental Expenditure During Construction (IEDC) for the period from April 2010 to November 2010 (i.e. 8 months) for both the assets and further disallowed 100% of IDC and IEDC for 3 months and 5 months from December 2010 onwards in case of Asset -1 and Asset -2 respectively. The relevant portion of the order is extracted as under: - - "18. In the light of the above principles, the issue of time over -run due to delay in obtaining the test bed and failure of the transformer in the SCT has been considered. As regards the delay in conducting the SCT, it has been observed that AREVA while requesting KEMA, Netherlands for early testing of the transformer, vide its e -mail dated 2.11.2009 has informed that the transformer was expected to reach KEMA by 15.3.2010. The SCT was conducted only on 27.11.2010 and thus there was a delay of 8 months in conducting the SCT. AREVA, who has been awarded the contract for supply of ICTs by the petitioner, is one of the major manufacturers of the energy equipments in the world. The case of the petitioner does not fall under the first category as the petitioner cannot be said to be imprudent in selecting AREVA to execute the project. The delay cannot be entirely attributed to the petitioner as the delay in getting the SCT done due to non -availability of test bed was beyond the control of the petitioner or its supplier as they had to depend on the third party to perform the test. The petitioner case also does not fall under the second category as the delay cannot be attributed to any force major event. In our view, the instant situation falls under the third category of cases laid down by APTEL in the above said judgement. We are of the considered view that the burden of cost over -run due to delay in conducting the SCT should be shared by the petitioner and the beneficiaries in equal proportion. We direct that the petitioner and the beneficiaries shall share the IDC and IEDC for the period of 8 months delay in case of both Pune ICT -III and Wardha ICT -III. The transformer failed the Short Circuit Test conducted on 27.11.2010 due to design deficiency. The type test was covered in the delivery schedule and the supplier is responsible for delay in delivery. We are of the view that the cost of time over -run due to failure of the transformer in SCT cannot be passed on to the beneficiaries except for the period during which the type test bed was not available. Accordingly, we direct that 8 months period for which test bed was not available shall be shared by the petitioner and beneficiaries and the impact of balance period of time over -run i.e. 3 months in case of Pune ICT -III and 5 months in case of Wardha ICT -III shall be borne by the petitioner."
(3.) AGGRIEVED by the said order, the petitioner filed an appeal, i.e. Appeal No. 257 of 2013 before the Appellate Tribunal for Electricity ("the Tribunal"). The Tribunal in its judgment dated 12.9.2014 partly allowed the appeal. The relevant extract of the Tribunal's Judgment is as follows: - - "15. Summary of our findings (i) The delay of 8 months in conducting Short Circuit Test due to non -availability of test bed was beyond the control of Power Grid or its supplier. The Central Commission has also given clear finding that this delay was beyond the control of Power Grid and its supplier as they had to depend on other Organization outside India as the Short Circuit Testing facilities were not available in the country. Accordingly, IDC and IEDC for delay of 8 months in getting the Short Circuit Test due to non -availability of test bed should be allowed to Power Grid. (ii) The balance delay in commissioning of the ICTs due to failure of the transformer during testing cannot be allowed to be passed on to the beneficiary and has to be borne by Power Grid. We have relied on the finding of this Tribunal in Appeal No. 165 of 2012 in this regard." 16. In view of above, the Appeal is allowed in part as indicated above. The Central Commission is directed to pass the consequential order as per the above findings at the earliest...";


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