- (1.)M/s Wardha Power Company Limited (WPCL) (now M/s Sai Wardha Power Ltd.) has filed the present Petition for review of the Commission's Order dated 17 January, 2014 in Case No. 91 of 2013. That Case related to a Petition filed by Vidarbha Industries Power Ltd. (VIPL) and Reliance Infrastructure Ltd. (RInfra) for determination of provisional Tariff in respect of VIPL's Butibori Power Plant of 600 MW in Nagpur District for supply of power to RInfra in FY 2014 -15 and 2015 -16. The Review Petition was filed on 24 February, 2014, within the period of 45 days stipulated in the MERC (Conduct of Business) Regulations, 2004. The Petitioner's prayers are as follows:
(2.)
" a) Admit the present review petition; b) Review and set aside the order dated 17.01.2014 passed by the Hon'ble Commission; c) Hold and declare that the power procurement by R -Infra from VIPL is not to be approved in view of the tariff indicated being higher when electricity is available from the Petitioner at a cheaper cost; d) Require Wardha Power to supply power at the reduced tariff than that of VIPL for the interim period of six months, subject to the condition that the supply shall be continued on comparison of the tariff being cheaper than that of VIPL determined on actual basis; e) Pass such other further order(s) as the Hon'ble Commission may deem just in the facts of the present case."

(3.)In its Petition, WPCL has contended that:
a) During the proceedings in Case No. 91 of 2013, WPCL had offered to supply electricity to RInfra from its 540 MW (4x135 MW) generating station at Warora, Maharashtra at a tariff lower than that proposed by VIPL.

b) By its Order dated 17 January, 2014, the Commission held that it is for RInfra to mutually enter into agreements with generators, and not for the Commission to interfere with them. The Commission further held that the Power Purchase Agreement (PPA) was approved and there was no requirement to go into the availability of power at cheaper sources at this stage when a provisional tariff was to be determined.

c) The impugned Order suffers from errors apparent and is subject to the review jurisdiction of the Commission. The premise on which the Commission has proceeded, i.e. that it is for RInfra to bilaterally enter into agreements with generators without the Commission having any role, is incorrect. The premise that the Commission has no jurisdiction or power with regard to power purchases and their approval at this stage is also incorrect and contrary to the provisions of the Electricity Act (EA), 2003.

d) Under the EA, 2003, the Commission exercises regulatory jurisdiction over the distribution and retail supply activities of RInfra, which has to ensure that only reasonable costs and expenses are passed on to consumers and electricity from the cheapest available source is procured.

e) The Distribution Licensee cannot contend that it will procure expensive electricity though it is available from a cheaper source. This is particularly so where the electricity is sought to be procured by RInfra from its sister concern, VIPL, even though cheaper electricity is available. The regulatory jurisdiction of the Commission over R -Infra as a Distribution Licensee extends to refusing approval of power purchases at high cost, and also to direct R -Infra to procure from other available cheaper sources. The power purchases to be tied up by R -Infra as a Distribution Licensee are not bilateral in nature, but subject to directions and regulatory jurisdiction of the Commission.

f) The EA, 2003 does not refer to the approval of a PPA but to regulating the power procurement by the Distribution Licensee, including tariff. The purpose is that the Commission ensures that only the cheapest electricity is passed on to the consumers.

g) The approval of the power procurement can be done only after the tariff is determined or indicated. It cannot be that the PPA is approved prior to the tariff, since it becomes binding notwithstanding how much the tariff works out to. WPCL had pointed out during the PPA approval proceedings that cheaper electricity is available from it. However, the Commission did not come to any finding on the issue.

h) Even when the tariff is determined, the Commission still retains the right to refuse power purchase after the tariff is known. There is no justification in holding that the Commission has no jurisdiction or role with regard to approval of the procurement after the tariff is indicated or determined.
The Commission's conclusion that there is no provision or power to regulate the power
i) procurement and to refuse power purchase at a higher cost is incorrect and contrary to the EA, 2003. This constitutes an error on the face of the record and is subject to review.

j) There is no dispute raised by RInfra or any finding by the Commission that the power procurement from VIPL is the most economical. The fixed cost of WPCL is substantially lower than that of VIPL. WPCL has firm fuel supply arrangements, and the variable cost will not be higher than that of VIPL, the proposed source of fuel supply being the same. WPCL will ensure the availability of power at a lower tariff than proposed by VIPL in the interim period if the issues raised in this Petition were to be considered by the Commission. The facts and circumstances mentioned in the impugned Order dated 17 January, 2014 are liable to be reviewed.