POWER GRID CORPORATION OF INDIA LTD Vs. ASSAM STATE ELECTRICITY BOARD
CENTRAL ELECTRICITY REGULATORY COMMISSION
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(1.) THE petitioner, Power Grid Corporation of India Limited, had filed Petitions Nos. 48/2000 and 71/2002 for approval of transmission charges in respect of 400 kV Bongaigaon-Malda transmission line (the transmission line) forming part of Kathalguri Transmission System (the transmission system) for the periods from 1.4.2000 to 31.3.2001 and 1.4.2001 to 31.3.2004, respectively.
(2.) Final tariff in respect of the transmission line for the period from 1.4.2000 to 31.3.2001 was initially awarded vide the Commission's order dated 4.7.2002 considering the capital cost of the transmission system as Rs. 101010 lakh, with apportioned cost of Rs. 29743 lakh for the transmission line. Subsequently, some errors in the data furnished by the petitioner came to notice while examining the tariff in respect of the transmission lines for the period 1.4.2001 to 31.3.2004. Accordingly, the above tariff was modified vide order dated 30.7.2004. The summary of the tariff awarded is given hereunder:
Transmission tariff in respect of the transmission lines for the period from 1.4.2001 to 31.3.2004 was initially awarded vide Commission's order dated 13.4.2004. Tamil Nadu Electricity Board (TNEB) filed Appeal No. 135/2005 in the Appellate Tribunal for Electricity (the Appellate Tribunal) against order dated 30.6.2006 of the Commission in Petition No 40/2002, vide which transmission tariff in respect of 400 kV D/C Kaiga-Sirsi transmission line along with associated bays for the period 1.4.2001 to 31.3.2004, was approved by apportioning FERV into debt and equity. TNEB had, inter alia, questioned the methodology of bifurcation of FERV into debt and equity for the purpose of tariff determination. This appeal, as also some other linked appeals were disposed of by the Appellate Tribunal through a common judgment dated 4.10.2006. The Appellate Tribunal vide its judgment dated 4.10.2006 held as under:
16. According to Explanation 1 to clause 4.4 (c), the premium raised by the Transmission Utility while issuing share capital and investment of internal resources created out of free reserve of the existing utility, if any, for the funding of the project, shall also be reckoned as paid up capital for the purpose of computing the return on equity subject to fulfillment of certain conditions. Explanation also makes no provision for increasing the equity beyond 50% of the book value of the transmission system. Once the fixed cost has been agreed to be financed in a certain ratio of debt and equity, the equity can be affected by FERV only if the equity is in foreign exchange. The provision of FERV as a pass through has been kept to ensure that any liability or gain, if any, arising on account of any variation in foreign exchange rates (whether debt or equity) is passed on to the beneficiary. In case there is no FERV liability or gain, as the case may be, there will not be any FERV adjustment. In the instant case the additional liability arising on account of FERV shall have an impact only on the debt liability and not equity capital. In this view of the matter, we hold that FERV adjustment is to be made in respect of debt liability and not in respect of the equity. Accordingly, we hold that the CERC is only to make adjustment in respect of debt liability and not in respect of the equity.
17. In view of the aforesaid discussion, the appeal is partly allowed to the extent indicated above. The Central Electricity Regulatory Commission shall re-calculate the effect of FERV on the debt liability.
(3.) BASED on the above decision, the tariff for the period 1.4.2001 to 31.3.2004 in respect of the transmission assets in the Eastern Region including the transmission line involving FERV was revised vide order dated 5.1.2008. The summary of the revised tariff awarded for the transmission line is given hereunder:
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