- (1.) M/s Wat -Ere -Source Technologies Pvt. Ltd. (WTPL) has filed a Petition on 18 March, 2014 under Section 86 (1) of the Electricity Act, 2003 seeking relief relating to provision of the power evacuation arrangement for its Karwand Small Hydro -electric Power Plant (SHP) in Dhule District.
(2.) WTPL's prayers are as follows: "a) Honorable Commission has time to time has ruled expressitly and implicitly that the cost beyond the interconnection point shall be borne by the licensee and shall be received from the consumers as per suitable pricing framework developed by the State Commission. Therefore, MSEDCL/MSETCL may please be directed to abide by the provisions of the MERC orders. b) MSEDCL/MSETCL should provide the power evacuation arrangement as per technical approvals issued by competent authorities. c) SHP projects are governed by GOMWRD policy dated 15.09.2005. MSEDCL/MSETCL should provide their facilities and services as per GOMWRD policy and MERC orders from time to time. d) MERC may please seek public comments on draft of EPA and standardize it for all projects."
(3.) The facts as stated in the Petition are as follows: (1) The Water Resources Department (WRD) of Government of Maharashtra (GoM) declared the State Hydel Policy on 15 September, 2005 for the development of small hydro power projects through private sector participation. (2) WTPL is developing the Karwand SHP (1.5 MW) under this Policy on a Build - Operate -Transfer (BOT) basis. As per the Policy, WRD has approved the Techno Economic Feasibility Report (TEFR) of Karwand SHP, and all the clearances except signing of Energy Purchase Agreement (EPA) with MSEDCL have been received. WTPL has received a draft of the EPA from MSEDCL. (3) Clauses A -7 ("Grid interfacing and evacuation arrangement") and A -8 ("Transmission / Distribution entities") of WRD's Policy relate to the power evacuation arrangement. Clause A -17 ("Exclusive Jurisdiction of MERC") provides that "In the event of dispute in interpretation of this policy or any clause in the agreement between developer and GoMWRD or STU/Transmission Licensee/Distribution Licensee, the same shall be referred to MERC to the extent of its jurisdiction under section 86(1) and other provisions of EA, 2003." (4) As per the Industries, Energy and Labour Department (IE&LD), Govt. of Maharashtra (GoM)'s Policy dated 14 July, 2010, 50% of the cost of power evacuation shall be paid by the Maharashtra Energy Development Agency (MEDA) as infrastructure assistance through the Green Cess Fund. The remaining 50% would be paid back by MSEDCL/ MSETCL in 5 equal installments, subject to a ceiling of Rs. 1.10 Crore, towards the cost of evacuation arrangement. (5) Under the MERC (Renewable Purchase Obligation, its Compliance and Implementation of REC Framework (RPO -REC)) Regulations, 2010, the Licensee is responsible for development of evacuation infrastructure beyond the inter -connection point, and the cost of evacuation infrastructure beyond that point is to be borne by the Licensee. (6) However, clause 2 (iii) of Article X(A) (Evacuation Facilities) in the draft EPA reads as follows: "The sanctioned estimate by MSEDCL/MSETCL or the actual expense incurred by the project holder or the amount as specified by the GoM in its policy dated 14 July, 2010 (amended from time to time), whichever is lower shall be considered as the evacuation expense (beyond the interconnection point) for refund". The EPA should, in fact, be governed by the WRD Policy dated 15 September, 2005 instead of the IE&LD Policy dated 10 July, 2010. (7) The following clauses of the draft EPA need to be modified or deleted as below: a. Clause 2 (iii) of Article X(A): "The sanctioned estimate by MSEDCL/MSETCL or the actual expense incurred by the project holder or the amount as specified by the GOM in its Policy dated 14.07.2010 (amended time to time), whichever is lower shall be considered as the evacuation expense (beyond the interconnection point ) for refund." b. Clause 2 (iv) (b) of Article X(A): "Remaining 50% amount will be refunded by MSEDCL/MSETCL in five equal installments spread over a period of five years commencing from one year after date of commissioning the project. ...No claims for proper evacuation shall be entertained from generator and MSEDCL shall be totally indemnified any claims for any reason whatsoever. Any un -stabilization and non evacuation of power due to any reason whatsoever, referred with sale power, MSEDCL shall not be held responsible." (8) The project cost as per the approved TEFR is Rs. 6.80 Crore. The cost of power evacuation was not considered in the TEFR, in accordance with the Commission's Tariff Orders. (9) The cost of power evacuation of WTPL's SHP is Rs. 2.74 Crore, which is almost 40% of the project cost. This entire cost has to be met in the form of equity, which is an impossible task for the project promoters. (10) The power evacuation cost amounts to around Rs. 2.75 Crore for a typical SHP. The developer would have to arrange for such large funds, which constitute 30 to 50% of the project cost and are not considered by the Commission in its Tariff Order. Interest During Construction (IDC), at 13% p.a., for such investment works out to around Rs. 260.50 Lakh over 7 years of repayment alone. (11) As per clause A -17 of the WRD policy dated 15 September, 2005, the Orders Regulations, Directives and Guidelines of the Commission on these matters would be binding on all. ;