Brijesh Kumar, J. - (1.) The above noted appeals have been preferred against the common judgment of the Andhra Pradesh High Court, upholding the order passed by the Andhra Pradesh State Regulatory Commission and its finding that the extended activities of supply of energy to the sister concern of the participating industries of A.P. Gas Power Corporation Ltd. (for short, APGPCL) would require Licence or exemption therefrom under the provisions of Sections 15 and 16 of the Andhra Pradesh Electricity Reform Act 1998 (for short the Reform Act, 1998).
(2.) Shortage of power is felt in most of the parts of the country which, apart from disrupting day-to-day life of the people, quite often than not, creates problem for industries. The States or the Electricity Boards managing the power sector find it difficult to meet the ever increasing demand of electricity. In such circumstances, captive generation of power is not unknown and it is getting quite in vogue but generally it is done in a manner that the factory or industry would generate and consume the power confining it in its premises to run its manufacturing/processing unit. In such circumstances, finding a via media, it appears that the State Government of Andhra Pradesh and the Andhra Pradesh Electricity Board mooted the idea of setting up of a 3 x 33 MW gas based combined cycle power station at Vijjeswaram for establishing a generating station which required high amount of investment, hence they decided to invite private participation in the venture which attracted some of the heavy industries to the proposal . They entered into a Memorandum of Understanding (MOU-1) on 17-10-1988 and another MOU on 19-4-1997, according to which, the Andhra Pradesh State Electricity Board (for short APSEB) had to have 26% share in the new company to come up viz. APGPCL, and the rest of the participating industries were to have different percentage of shares and the power so generated by the company was to be shared proportionately amongst the share holding participating industries and their sister concerns.The Central Electricity Authority is also said to have acceded to the request made to treat APGPCL as collective captive power generation company.
(3.) The new company, APGPCL, as indicated above, came into being and started power generation and distribution of the same according to the MOUs to the participating industries in proportion to their share holding. The power so generated was taken to the grid of APSEB wherefrom it was being wheeled on payment of wheeling charges to the APSEB in the shape of electricity to the extent of the charges for wheeling the electricity. The State Government is also said to have issued consent under Section 43A(1)(c) of the Electricity Supply Act, 1948 (for short the Supply Act) to sell the power generated to the share holders of the company and their sister concerns. Later on a second unit of 160 MW capacity of power generation was also set up.;