- (1.) M/s JSW Energy Limited has filed a Petition on 31 July, 2014 under Regulations 92 and 94 of the MERC (conduct of Business Regulations), 2004, read with Section 86(1)(b) and (f) of the Electricity Act (EA), 2003, seeking certain clarifications and grant of additional time to comply with the Commission's Order dated 15 July, 2014 in Case No. 118 of 2013.
(2.) JSW Energy's prayers are as follows: "a) Clarify that the Petitioner may approach the Hon'ble Commission with its facts and justifications for grant of compensatory tariff, based on a mechanism/ formula in line with the mechanism/ formula proposed by KPMG in its report for the case of the Petitioner; b) grant additional time to the Petitioner, as deemed appropriate by this Hon'ble Commission, to file appropriate petition/ application; and c) pass such other orders as this Hon'ble Commission may deem just and proper."
(3.) In its Petition, JSW Energy has submitted that: 3.1. The Commission passed an Order dated 15 July, 2014 after considering three Petitions jointly, namely, Case Nos. 154 of 2013, 189 of 2013 and 118 of 2013, in which it inter alia: (a) approved a formula/ methodology for addressing the issue of shortfall in supply of domestic coal and held that merits and facts of each of the cases under consideration by the Commission shall be dealt separately; (b) based on the approved methodology, permitted the Petitioners in the three Cases to approach the Commission along with the justification for the pass -through on account of increase in fuel cost within 15 days in continuation with the Order; and (c) held that for the units that fall in the second category (in Paragraphs 36 to 38 of the Order), the Petitioners may approach the Commission suggesting the proposed mechanism with detailed justification. 3.2. In Case No. 118 of 2013, JSW Energy had based its claim on the principles for award of a compensatory tariff on account of substantially higher price of imported coal as had been laid down by the Central Electricity Regulatory Commission (CERC) in its Order dated 2 April, 2013 in the matter of Adani Power Limited v. Uttar Haryana Bijli Vitran Nigam Limited and Others, and Order dated 15 April, 2013 in the matter of Coastal Gujarat Power Limited v. Gujarat Urja Vikas Nigam Limited and Others relating to the Mundra Ultra Mega Power Project. JSW Energy had also relied on the Commission's Order dated 21 August, 2013 in Case No. 68 of 2012, wherein the Commission had laid down the framework for granting relief in a similar case of unanticipated and uncontrollable increase in fuel cost. 3.3. However, since Adani Power Limited and Indiabulls Power Limited had also prayed for similar reliefs (though on separate grounds and factual circumstances), the Commission appointed KPMG as a consultant to provide independent advice on developing a framework for determining incremental coal cost pass -through in case of projects which have entered into PPAs based on competitively discovered tariff under Section 63 of EA, 2003. While framing KPMG's Terms of Reference, the Commission had stated in its Order that "the reasons for allowing coal pass through may be shortage in domestic coal availability and consequent changes in NCDP or change in international coal pricing policy or de -allocation of coal block etc." (Emphasis added.) 3.4. Following the submission of the 'Presentation on providing independent advice on developing a framework for determining incremental coal cost pass through' by KPMG, the Commission invited the Petitioners' views at the hearing held on 13 June, 2014. 3.5. KPMG had addressed the case of the Petitioner, and suggested the following approach and formula with respect to its case: P imported old = Reference FOB based on verified FSA P imported new = Reference price based on relevant indexes for imported coal FOB price 3.6. The Commission's Order in Case No. 118 of 2013 states that: "32.1. The objective of the Commission, while arriving at the methodology to determine compensatory fuel charge is to enforce the decision of CCEA dated 21 June, 2013 and MoP advice dated 31 July, 2013. The Commission noted that the methodology suggested by the Consultant includes issues other than that fall under the purview of the CCEA decision and MoP advice. 32.2. The Consultant has identified various hardship factors, for each of which, it has suggested a pass -through formula in its report. The advice of MoP is limited to considering shortfall in the quantity indicated in the LoA/ FSA. The Commission has adopted the formula relevant for addressing the issue of shortfall in quantity of domestic coal as per the decision of CCEA dated 21 June, 2013 and MoP advice dated 31 July, 2013. 33. The Commission has computed the shortfall in heat value corresponding to the shortfall in the contracted quantity as per the FSA/LoA and arrived at the requirement of alternate coal. The Compensatory fuel charge shall be applicable for units generated from imported/ alternate (the terms alternate coal and imported coal have used interchangeably for the purpose of this methodology) coal considering defined efficient operational norms only. Further, the shortfall quantity that needs to be procured from alternate coal shall be limited to the level of quantity assured as per FSA (65%, 65%, 67% and 75% for the balance period of 12th five year plan). 33.1.1. The amended methodology is as follows: Quantity of Alternate Coal in MTPA## Compensatory fuel charge (Rs. Per kWh) 3.7. Thus, the Commission's Order only addressed the projects which have domestic coal linkage but have not been supplied the quantity mentioned under the FSA/LoA signed with Coal India Ltd (CIL). However, the methodology suggested by KPMG with respect to the specific case of JSW Energy does not find mention in the operative part of the Order. However, para. 41 of the Order allows JSW Energy to approach the Commission based on the approved methodology, while disposing of Case No. 118 of 2013 along with the other two cases: "41. Based on the approved methodology, the Petitioners may approach the Commission along with the justification for the pass - through on account of increase in fuel cost within 15 days in continuation of this Order." 3.8. JSW Energy's Ratnagiri Project (Unit No. 1) does not have any coal linkage. However, it has obligation to supply power under a long -term PPA to MSEDCL and has high bank exposure. Further, the Unit is already commissioned. Its case appears to fall under para. 38 of the Order. JSW Energy submits that the mechanism suggested by KPMG for its case is a fair method of arriving at the compensatory tariff. 3.9. JSW Energy seeks a clarification for it to approach the Commission with its facts and justifications for grant of compensatory tariff based on a mechanism/ formula in line with that proposed by KPMG in its report in respect of its case. ;