- (1.) The Petitioners in these writ petitions are all Sugar Mills in the State of Tamil Nadu who have set up Co-generation plants to generate electricity and to supply the surplus electricity to the Tamil Nadu Electricity Board as per the agreements entered into with the Tamil Nadu Electricity Board in accordance with the provisions of the Electricity (Supply) Act of 1948. The main dispute in all these writ petitions is in respect of the fixation of price for the electricity supplied by these sugar mills to the Tamil Nadu Electricity Board.
(2.) Since common issues are involved in these writ petitions, they were all heard together and disposed of by means of this common order.
(3.) These writ petitions have come to be filed in the following background: Prior to 1991, private sector entrepreneurs cannot set up thermal projects, coal/lignite or gas based hydel projects and wind/solar energy projects of any size. However, the Electricity (Supply) Act, 1948 was so amended in 1991 by which private sector entrepreneurs were allowed to set up enterprises, either as Licensees, or as generating companies. Now, licenses under Section 3 of the Indian Electricity Act can be issued by the State Governments to private units willing to enter the electricity sector as licensee companies to supply and distribute energy in a specified area, who may or may not have a generating station. Prior to 1991, generating companies could be set up only by the Central or State Governments or both. After 1991, generating companies can now be set up and such companies can set up one or more generating stations and offer to sell electricity to the grid, unlike licensees, who supply and distribute energy within a specified area and who may or may not have generating stations. It is thus possible for an enterprise to combine the functions of a generating company in one area and that of a lincensee in another area. The generating company, will sell power to State Electricity Boards (SEBs), on the basis of an agreement, and, at tariff based on parameters applicable to generating companies. Power plants in the private sector are captive power plants, set up to serve an industrial or other unit, where the requirement of that unit is for a large/continuous supply of electricity and a reliable source of electricity is necessary. Surplus electricity from captive power plants can be offered for sale to the State Electricity Boards. In this regard, the Government of India, Ministry of Power, issued a policy known as "Policy on Private Participation in the Power Sector" dated 22.10.1991.;