NATIONAL THERMAL POWER CORPORATION LTD Vs. UTTAR PRADESH POWER CORPORATION LTD
LAWS(ET)-2006-4-1
CENTRAL ELECTRICITY REGULATORY COMMISSION
Decided on April 26,2006

Appellant
VERSUS
Respondents

JUDGEMENT

- (1.) THE petitioner, through this petition has sought approval for recovery of fixed charges on account of certain capital expenditure from the respondents, in accordance with the methodology proposed in the petition.
(2.) We heard Shri V.B.K. Jain for the petitioner on admission. The petitioner, a generating company owned or controlled by the Central Government owns the generating stations in four regions of the country, namely Northern, Western, Southern and Eastern Regions. The power generated at these generating stations is supplied to the Bulk Power Customers who are generally the State Utilities located in these regions, for which the Bulk Power Supply Agreements/Power Purchase Agreements are signed with the petitioner.
(3.) FOR effective coordination of the activities of the generating stations/projects in a region, the petitioner has established certain offices which it calls the Regional Headquarters, stated to be six in number. The activities of the Regional Headquarters Offices are further regulated through the Corporate Offices stated to be located at New Delhi and NOIDA. The Corporate Offices lay down the policy for guidance to the Regional Headquarters and the generating stations/projects, to meet their needs related to engineering, procurement, technical, commercial and financial matters. The petitioner has also established Central Satellite Earth Station at Muradnagar which caters to the communication links of different generating stations/projects and other offices. In addition, the petitioner is said to have established Transport and Custom Clearance offices at Chennai and Kolkata to facilitate functioning of different field offices/generating stations. The capital expenditure incurred by the petitioner on establishment of all these offices which is stated to be Rs.370.30 crore as on 1.4.2004, is not taken into consideration for determination of tariff for supply of electricity generated at the generating stations owned by the petitioner, though the revenue expenditure of all these offices is allocated to different generating stations. The capital assets are stated to have been financed entirely through equity and the petitioner has claimed return on equity @ 14%, as applicable during the current tariff period on the capital expenditure incurred on their establishment.;


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