JUDGEMENT
NAVIN SINHA, J. -
(1.) The controversy for determination in the present appeal is, whether the word 'fuel' as used in clause 1.1.27 of the
Power Purchase Agreement (hereinafter referred to as 'PPA')
means "natural gas only" or includes Regasified Liquefied
Natural Gas (hereinafter referred to as 'RLNG') also.
(2.) The Andhra Pradesh Electricity Regulatory Commission (hereinafter referred to as "the Commission"), in O.P. No. 20 of
2013 dated 08.08.2013, preferred by the respondent, held that the term 'fuel' as used in the PPA meant natural gas only in its
natural form, and did not include RLNG. Simply because the
physical composition of natural gas and RLNG are similar, it
does not automatically entitle the respondent to generate
power with RLNG, which was more expensive and not
domestically available, affecting the per unit supply of power
generated by it, as ultimately the consumer would have to pay
more.
(3.) In Appeal No. 222 of 2013 preferred by the respondent, the Appellate Tribunal by the impugned order dated
30.06.2014 held that use of the word "only" after "natural gas" in the PPA dated 02.05.2007 had to be understood in context
of the deletion of other alternate fuel such as Naphtha etc.
incorporated in the earlier PPAs, and it was never intended to
restrict the meaning of the word natural gas to exclude RLNG,
which was a variant of natural gas and did not come in the
category of an alternate fuel. It further held that the higher
price of RLNG could not be a determinative factor to exclude it
from the agreement as any increase in price of gas was an
accepted risk, especially in view of the nonavailability of
natural gas from the KGD6 basin. The use of RLNG had also
been permitted on earlier occasions without any amendment
to the PPA.;
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