M .KARPAGA - (1.) Uttar Haryana Bijili Vitran Nigam Limited (UHBVNL) is the Appellant herein.
(2.) AGGRIEVED over the impugned order dated 8.9.2010 passed by the Haryana Electricity Regulatory Commission (State Commission) revising the approved Tariff of the 2nd Respondent, the Appellant has filed this Appeal.
(3.) THE short facts are as follows: (a) The Appellant is a Government of Haryana undertaking. (b) It is a Distribution Licensee, being responsible for the distribution and retail supply of power in the Northern parts of Haryana. (c) State Regulatory Commission is the 1st Respondent. M/s. Bhouruka Power Corporation Limited is a generating company and is the Second Respondent. (d) Haryana Renewable Energy Development Agency (HAREDA), 5th Respondent, an autonomous body was set -up by the Government of Haryana to implement the Non -Conventional and Renewable Energy Projects under the Haryana State Department of Non - Conventional Energy Sources. (e) HAREDA issued advertisements in 1998, inviting the proposal for setting up mini hydro plants on canal drops at Dadupur and other sites in Haryana. (f) M/s. Bhouruka Power Corporation Limited, the 2nd Respondent was one of the bidders for the Dadupur site. Ultimately it became the successful bidder. A Letter of Intent was issued on 30.4.1999 for the said site. (g) However, by the Memo dated 30.9.1999, the HAREDA cancelled the allocation of the Dadupur site made in favour of M/S. Bhouruka Power Corporation (R -2). (h) Challenging the same, M/s. Bhouruka Power Corporation (R -2) preferred a Writ Petition before the Punjab and Haryana High Court. The High Court ultimately by the order dated 3.7.2000 allowed the said Writ Petition setting aside the cancellation and restored the order of allocation of Dadupur site made in favour of M/s. Bhouruka Power Corporation (R -2). (i) Thereafter, on 17.4.2006, a PPA was entered into between the Appellant and M/s. Bhoruka Power Corporation Limited (R -2). The said PPA was placed before the State Commission for approval. (j) On 10.7.2007, the Haryana Commission gave its approval to the PPA with some modifications including slight change in the tariff. Thereafter, the modified PPA was signed by the parties on 3.3.2008. (k) Thereafter, due to escalation of prices in the changes made in the tax regime, change in scope and other relevant factors, heavy additional cost was incurred by the Generator (R -2) for completion of its Dadupur site. Due to heavy additional cost, M/s. Bhoruka Power Corporation Limited (R -2) felt difficult to survive at the tariff determined by the State Commission on the basis of the PPA. Therefore, M/s. Bhoruka Power Corporation Limited (R -2) sent a letter to the Appellant requesting for the increase in the tariff. However, the Appellant did not accede to the request of M/s. Bhoruka Power Corporation Limited (R -2) to increase the tariff. (l) Hence, in April, 2010, M/s. Bhoruka Power Corporation Limited (R -2) filed a Petition before the State Commission for re -determination of the tariff of the project on the grounds mentioned above. (m) The State Commission, after hearing the parties passed the impugned order dated 8.9.2010, allowed some of the claims made by M/s. Bhoruka Power Corporation Limited (R -2) and approved additional capitalisation of Rs.4.12 Crores on completed cost basis and re -determined the tariff. (n) Aggrieved by the said order, the Appellant has preferred the present Appeal. The Learned Senior Counsel for the Appellant would urge the following contentions: (a) The HERC (Terms and Conditions for Generation of Tariff) Regulations 2008 are only prospective. Regulation 2 of the 2008 Regulations limits the scope and extent of application of the said Regulations to cases where the commission determines the tariff under Section 62 and 64 of the Electricity Act, 2003. In the present case, the tariff has been determined in accordance with Section 63 of the Act through the bidding process on the basis of mutually agreed tariff by both the distribution licensee and the generator. As such, the applicability of this Regulation is excluded. Furthermore, the Regulations which have been applied in the present case to over ride the PPA provisions are only prospective in nature. Therefore, the impugned order is erroneous. (b) The State Commission has wrongly exercised its jurisdiction and determined the tariff by complying with its 2008 Regulations which would not apply to the present case. As a matter of fact, the State Commission by the order dated 10.7.2007 had finally approved and fixed the tariff for a period of 15 years. The State Commission reserved its right to review and approve the fresh tariff only from the 16th year onwards and not before. Therefore, the decision to review the tariff before the expiry 15 years period is wrong. (c) Admittedly, M/s. Bhoruka Power Corporation (R -2) conducted the detailed survey of the site and prepared a DPR on the basis of which the project was awarded to it. It was expected that the project developer, being a prudent businessman, would factor in the inflationary trends and the possible spill over of costs in a project which was expected to extend over a period of time. (d) The Commission has wrongly allowed the claims in respect of construction of cut -off wall, expenses on account of dewatering and dewatering equipment, purchase of diesel for dewatering, barrage gate and repair of existing barrage gate even though the 2nd Respondent is not entitled to the said claims. ;