- (1.) THE petitioner, Essar Steel India Limited (ESIL) has a steel manufacturing facility at Hazira in Gujarat with a capacity of 10 million tonnes per annum. The steel plant has six Electric Arc Furnaces of 100 MW to 120 MW capacity each and seven smaller size Ladle Furnace of 15 MW to 20 MW capacity each. The total power requirement of the petitioner is up to 850 MW average power and 1050 MW peak power. To meet its power requirement, the petitioner is procuring power from its sister concern, Essar Power Madhya Pradesh Limited (EPMPL) located in Madhya Pradesh and has entered into a power purchase agreement for sale and purchase of 700 MW power. Further, EPMPL has been granted Long Term Open Access for supply of power to ESIL by Central Transmission Utility. The petitioner has also been granted connectivity by Central Transmission Utility subject to the condition that the petitioner would be connected to the inter -State transmission system through a radial mode and would have to get itself disconnected from the State Transmission Utility of Gujarat. The petitioner approached Western Regional Load Despatch Centre vide its letter dated 12.10.2012 requesting for (a) transfer of load control area jurisdiction of ESIL from SLDC Gujarat to WRLDC, Mumbai; (b) grant of status of a regional entity for the purpose of using Open Access power; and (c) for treating ESIL as direct UI pool member. WRLDC in its response dated 18.10.2012 has not acceded to the request of the petitioner for the reasons that (a) there is no provision in the Grid Code which provides for transfer of load control area from the SLDC to RLDC; (b) WRLDC would schedule ESIL power under LTOA through Gujarat treating it as an embedded entity of Gujarat; and (c) it would be better to approach this Commission since the case involved interpretation of regulations. Aggrieved by the response of WRLDC, the petitioner has filed the present petition with the following prayers: (a) Allow the present petition and direct WRLDC to transfer the load control area jurisdiction of ESIL from SLDC, Gujarat to WRLDC, Mumbai; (b) Grant ESIL the status of a regional entity under the Grid Code for the purpose of scheduling of power and unscheduled interchange accounting; (c) Lay down guidelines for addressing such situations in future and/or; (d) Pass any other order(s) or direction(s) as the Commission may deem fit and proper in the circumstances of the case. After hearing the learned counsel for the petitioner and Gujarat SLDC, and representative of POSOCO on 27.11.2012, the Commission admitted the petition and directed the petitioner to implead the constituents of the Western Region, Central Electricity Authority (CEA) and Western Regional Power Committee. The petitioner impleaded the respondent Nos. 4 to 14 vide its affidavit dated 14.10.2012 and served the copies of the petition on the respondents. Replies have been received from Western Regional load Despatch Centre (WRLDC), Gujarat State Load Despatch Centre (Gujarat SLDC), Dakshin Gujarat Vij Company Ltd. (DGVCL) and Gujarat Urja Vikas Nigam Limited (GUVNL) and the petitioner has filed rejoinders to the replies. Facts of the Case
(2.) THE facts of the case are briefly capitulated as under: (a) EPMPL, the sister concern of the petitioner has developed a 1200 MW (2X 600) thermal power station at Mahan, District: Sidhi in the State of Madhya Pradesh. EPMPL had applied for long -term open access ("LTOA") from CTU for supply of 400 MW power to Madhya Pradesh and 700 MW power to the petitioner's plant at Hazira in Gujarat. At the 27th meeting of the Standing Committee on Power System Planning in Western Region held at Indore on 30.7.2007, Gujarat Energy Transmission Corporation Limited (GETCO) informed that interconnection to the petitioner's plant is standalone i.e. on a radial mode and the plant shall not be connected to 220 kV network at any point. In the said meeting, LTOA was agreed to be granted to EPMPL with effect from the commissioning of the following network: (i) Connectivity to be provided by the Project Developer: (a) Mahan -WRPS near Sipat 400 kV D/C (triple conductor) (b) Gandhar (NTPC) - Hazira 400 kV D/C (twin conductor) (c) 400/220 s/s at Essar Steel Hazira (s/s capacity to be decided by developer) (ii) Regional System to be provided by PGCIL (or by any other agency if so decided) (d)765/400 kV, 3x1500 MVA WRPS near Sipat (e)765/400 kV, 3x1500 MVA WRPS Wardhwa substation (f) Charging of Seoni -Wardha 2xS/C line at 400 kV level LTOA for 1100 MW was granted by the CTU to EPMPL vide its letter dated 24.11.2008. (b) Essar Power Transmission Company Limited (EPTCL) approached this Commission for grant of transmission licence for the transmission systems mentioned at para a (i) above. This Commission vide order dated 8.4.2008 in Petition No. 157/2007 granted transmission licence to EPTCL for development and operation of the following transmission systems: (c) In the 10th meeting of Western Region constituents held on 6.12.2008 regarding LTOA applications, the issue of sharing of regional transmission charges corresponding to the various IPPs capacity including the EPMPL's TPS at Mahan was deliberated in detail and it was decided that where the generation projects are not having any other drawal arrangement through the STU network except the dedicated transmission system from the generation switchyard connecting the entire capacity to the grid, the applicants for long term open access are required to share the respective regional transmission charges corresponding to gross project capacity. Accordingly, CTU informed EPMPL vide its letter dated 23.12.2008 that since there is no drawl arrangement at the TPS of EPMPL at Mahan at STU level except the proposed Mahan TPS -WR Pooling Station near Sipat 400 kV line, EPMPL needs to share the Western Regional transmission charges corresponding to 1200 MW capacity. EPMPL was requested to undertake signing of BPTA for sharing of WR transmission charges corresponding to 1200 MW capacity. The earlier intimation of LTOA for 1100 MW vide letter dated 24.11.2008 was withdrawn and substituted by a revised intimation for LTOA vide letter dated 23.12.2008. In the LTOA, the following were clearly mentioned: Note: Interconnection at Hazira (Essar Steel) with WR grid shall be on standalone basis i.e. on radial mode and shall not be directly or indirectly connected to 220 kV network of GETCO. Pursuant to the above LTOA, EPMPL signed the BPTA with PGCIL on 7.1.2009. (d) PGCIL vide its letter dated 29.7.2009 wrote to EPMPL that as per the information received from GETCO, the proposed 400/220 kV Essar Hazira (Steel) sub -station was planned to be connected to M/s. Bhander Power through 220 kV lines which in turn was already connected to GETCO network. PGCIL informed that since the new arrangement is against the conditions of the grant of LTOA for power transfer to Essar Hazira (Steel). EPMPL should ensure and confirm that the connectivity of Essar Hazira substation was on standalone basis with WR grid and would have no connection with GETCO network. (e) The petitioner vide letter dated 17.2.2012 submitted its application to PGCIL for grant of connectivity to the ISTS. PGCIL in its letter dated 21.2.2012 directed the petitioner to submit the order granting open access to the petitioner by the Gujarat State Electricity Regulatory Commission. On 5.4.2012, the petitioner submitted the additional information to PGCIL. On 20.4.2012 PGCIL granted connectivity to the petitioner. A Tripartite Connection Agreement was executed on 25.5.2012 between PGCIL, ESIL and EPTCL in accordance with the Connectivity Regulations of the Commission. (f) The petitioner vide letter dated 9.7.2012 submitted the certificate for change of name from Essar Steel Ltd. to Essar Steel India Ltd. to PGCIL. On 1.8.2012, PGCIL granted a modified LTOA changing the name of drawee utility from Essar Steel Ltd. to Essar Steel India Ltd. (ESIL). On 17.8.2012, a Transmission Service Agreement was executed between ESIL and PGCIL. (g) On 12.10.2012, ESIL wrote to WRLDC seeking transfer of the load control area of ESIL form SLDC, Gujarat to WRLDC, Mumbai; for grant of the status of regional entity to ESIL for the purpose of using open access power; and for treating ESIL as a direct UI pool member of WRLDC as ESIL is a user and bulk consumer under the Grid Code. (h) WRLDC in its letter dated 18.12.2012 has responded by saying that there is no provision in the Grid Code for change of load control area from SLDC to RLDC or vice versa and ESIL's drawal of power from EPMPL by way of LTOA shall be scheduled by WRLDC by treating ESIL as an embedded entity of Gujarat. WRLDC further advised ESIL to approach this Commission for seeking guidance since the issue involved interpretation of the regulations of the Commission. Aggrieved by the said communication, the petitioner has filed the present petition. Submission of the petitioner The petitioner had made the following submission in support of its prayers: - (a) Refuting the contention of WRLDC that there is no prescribed procedure for transfer of a load control area from the jurisdiction of SLDC to RLDC, the petitioner has relied upon the definition of the term 'bulk consumer', 'regional entity' and 'user' as defined in the Grid Code and has submitted that the petitioner satisfies the conditions of a bulk consumer, a regional entity and a user. The petitioner has further relied upon clause 6.4(22) and 6.4(25) of the Grid Code to contend that the RLDC is responsible for computation of the actual net injection/drawal of the regional entity. Accordingly, the prayer of the petitioner is covered under the provisions of clause 6.4 of the Grid Code. Moreover, clause 6.4(3) provides that there can be exception to the procedure as provided under clause 6.4(1) and (2) for the reason of operational expediency subject to the approval of the Commission. (b) The Commission has the power to regulate inter -State transmission of electricity under Section 79(1)(c) of the Act. In this connection, reliance has been placed on some judgments of the Hon'ble Supreme Court in support of the petitioner's contention that the Commission's "power to regulate" is very wide and the Commission can grant appropriate relief to the petitioner. The petitioner has further sought relaxation of the provisions in terms of Regulation 6.3(3) read with clause 4 of part 7 of the Grid Code to provide that WRLDC shall exercise control area jurisdiction over the petitioner. (c) ESIL is a beneficiary in accordance with the Central Electricity Regulatory Commission (Unscheduled Interchange charges and related matters) Regulations, 2009 as it is purchasing electricity from EPMPL which is a generating company. Moreover, ESIL has an average demand ranging from 750 MW (average) to 1050 MW (peak load) which is greater than some of the regional entities like Goa. Therefore, RLDC who is responsible for UI accounting of regional entity should also undertake the UI accounting of ESIL. Reply of WRLDC
(3.) POSOCO (WRLDC) in its reply filed by affidavit dated 27.12.2012 has submitted as under: (a) "Control Area" has been defined in the Grid Code as "an electrical system bounded by interconnections (the lines), metering and telemetry which controls its generation and/load to maintain its interchange schedule with other control areas whenever required to do so and contributes to frequency regulation of the synchronously operating system". Entities like State Utilities and Inter -State Generating Stations satisfy the criteria laid down in the definition of "control area" in the Grid Code for being designated as control area, whereas bulk consumers cannot contribute to frequency regulations and do not satisfy the said criteria. (b) Section 28(3)(a) of the Electricity Act, 2003 (2003 Act) provides that the "Regional Load Despatch Centre shall be responsible for optimum scheduling and dispatch of electricity within the region, in accordance with the contracts entered into with the licensees or the generating companies operating in the region". A bulk consumer is neither a licensee nor a generating company, and accordingly, the Grid Code does not deliberately deal with the jurisdiction issue of bulk consumers. (c) Though the Approved Procedure issued under the Central Electricity Regulatory Commission (Grant of Connectivity, Long -term access, Medium Term Open access and related matters) Regulations, 2009 (Connectivity Regulations) allows bulk consumers with a load of 100 MW and above to get connected directly to ISTS by applying for connectivity to CTU, mere connectivity to ISTS does not automatically entitle an entity to come under control area jurisdiction of RLDC. (d) As per Section 42 of the 2003 Act, the State Commissions have been mandated to introduce open access for consumers. Therefore, unlike a generator where either the Central Commission or a State Commission can have jurisdiction, an open access consumer always remains within the jurisdiction of a State Commission which is also in line with proviso to Section 86(1)(a) of the 2003 Act. (e) "Area of supply" has been defined in the 2003 Act to mean "the area within which a distribution licensee is authorized by his licence to supply electricity". Further a "consumer" has been defined as "any person who is supplied with electricity for his own use by a licensee or the Government or by any other person engaged in the business of supplying electricity to the public under this Act or any other law for the time being in force................." Moreover, as per the provisions of the 2003 Act and Electricity Rules, the petitioner as a bulk consumer is required to pay cross subsidy charge determined by the State Commission irrespective of the fact that it is connected to ISTS. (f) WRLDC has refuted the submission of the petitioner that ESIL will be fully isolated from the State grid and has submitted that even if a bulk consumer is connected only to the ISTS, it can remain within the jurisdiction of the concerned State. Withdrawal by the bulk consumer at the ISTS connectivity point can be considered as drawl of the State concerned by the RLDC and RPC and the State in turn would carry out scheduling and energy accounting of such bulk consumer entities. A number of generating stations connected to ISTS have drawn their start -up power from ISTS as HT consumers of the respective State. (g) The petitioner is not a beneficiary under the Central Electricity Regulatory Commission (Unscheduled Interchange Charges and related matters) Regulations, 2009 (UI Regulations). Clause 2(1)(d) of the UI Regulations defines a 'beneficiary' as a 'person purchasing electricity generated from a generating station' and clause 2(1) (f) of the said Regulations defines 'generating stations' to mean a generating station whose tariff is determined by the Commission under Clause 62(1)(a) of the 2003 Act and would apply to supply of electricity to a distribution licensee. Since the petitioner is not a distribution licensee but a consumer, it does not fall within the definition of beneficiary under clause 2(1)(d) of the UI Regulations. (h) The fact that demand of ESIL is ranging from 750 MW to 1050 MW which is greater than some of the regional entities does not make the petitioner a regional entity. For becoming a regional entity under clause 2(1)(kkk) of the Grid Code, the petitioner has to fall within the control area of RLDC and its accounting and metering of energy needs to be done by RLDC. The petitioner cannot be considered as a regional entity as it does not fall within the jurisdiction of WRLDC nor WRLDC carries out the metering and energy accounting of the petitioner. Consequently, the petitioner is outside the purview of clauses 6.4.(22) and 6.4.(25) of the Grid Code. (i) The petitioner has erroneously relied upon the provisions of Part 7 of the Grid Code for exercise of its inherent power by the Commission as no special or compelling circumstances arise for exercise of such power. (j) Apart from Control area Jurisdiction, WRLDC has also flagged some generic issues like mixed entities, fragmented control area, universal service obligations, merchant loads etc. for consideration by the Commission before deciding the issue of control area jurisdiction since the decision in the present case has the possibility of a large number of bulk consumers seeking connectivity to the ISTS.;