Alok Sharma, J. - (1.) By this Miscellaneous appeal under Section 37 of the Arbitration & Conciliation Act, 1996 (hereafter 'the Act of 1996') a challenge has been laid to the judgment dated 25-2-2017 passed by the Commercial Court dismissing the appellant AVVNL's (hereafter 'AVVNL') objections under Section 34 of the Act of 1996 to the award dated 25-8-2007 passed by the sole Arbitrator appointed by the Rajasthan Electricity Regulatory Commission Jaipur (hereafter 'the Commission') vide order dated 12-2-2007 purporting to exercise its power under Section 4, 94, and 158 of the Electricity Act, 2003 (hereafter 'the Act of 2003') read with clause 30 of the Rajasthan Electricity Commission terms and Conditions of (open access) Regulations, 2004 (hereafter 'Regulations of 2004').
(2.) The necessary facts relevant to adjudication of the appeal are that the respondent Hindustan Zinc Limited (hereafter 'HZL') has four high tension Electricity Connections for its units at Chanderiya, Debari, Aghucha and Dariba for which four contracts with AVVNL obtain for purchase of electricity. HZL also set up a captive power plant (hereafter ' CPP') of 154 MW (2x77 MW) at Chanderiya, which was commissioned in February, 2005 and synchronized with the Rajasthan Vidyut Prasaran Nigam Limited Grid (hereafter 'the RVPNL'). Short term open access to transmission and distribution systems of RVPNL and AVVNL for electricity generated at the CPP was sought under the Regulations of 2004 framed under Sections 42(2) and 181 of the Act of 2003. Requisite permission for open access to the transmission system was granted by RRVPNL on 28-1- 2005 and open access thereafter obtained under agreement dated 11-3-2005. HZL also entered into three open access agreements with the AVVNL on 10-3-2005 for wheeling of power from its CPP on AVVNL's distribution system. The open access capacity allocation agreement between AVVNL and HZL was for Rampura Aghucha- 20000 KW, for Debari-15000 KW and for Dariba-5000 KW. Open access commenced 24-3-2005 and the power generated by the respondent HZL at its CPP after meeting the requirements of its industrial unit at Chanderiaya was injected at 132 KV and 220 KV grid substations at Chittorgarh from where it was transmitted on RVPN's transmission system and supplied to respondent HZL's units at Aghucha, Debari and Dariba through AVVNL's distribution lines. Under the open access agreements dated 10-3-2005 between AVVNL and HZL it was agreed that charges for existing connections for the sanctioned contract demand of HZL as a Discom consumer and charges as open access consumer would be governed by the tariff and regulatory order/s in force from time to time. The agreements specifically provided for daily scheduling of injection and drawl for each 15 minutes time block. It was also agreed that Availability Base Tariff (ABT) complaint meters capable of recording deviation from schedules of the generating system station contracted by open access consumer for supplying/ injection open access power were to be provided at injection point. Other salient features of the agreement dated 10-3-2005 relevant for this miscellaneous appeal were as under:- "As both the parties are agreeable to modify the existing connection agreement(s) to the extent applicable." (1) Definitions In this agreement, unless the context otherwise requires(a) "Act" means the Electricity Act, 2003 (Act No.36 of 2003); (b) "ABT Compliant Meter" means metering system specified for Availability Based Tariff (ABT) in metering code by the commission; (c) "Commission" means Rajasthan Electricity Regulatory Commission; (d) "Contract Demand" shall mean the demand in KVA sanctioned for the consumer which the Ajmer Discom makes specific commitment to supply energy from time to time subject to the governing terms and conditions; (e) "Distribution Metering Code" means the metering code specified by the commission for distribution system of the distribution licensee in the state; (f) "Grid Code" means the grid code specified by the commission under section 86(1)(h) of the Act for Rajasthan State Transmission System; (g) "Open Access Consumer" means a person using or interchange against the transmission system and/ or the distribution system of the licensee(s) in the state for transmission and/ or wheeling of electricity in the state; (i) "SLDC" means the Rajasthan State Lead Dispatch Centre at Heerapura, Jaipur-functioning under sub-section (1) of Section 31 of the Act; (j) "Transmission Metering Code" means the Grid Metering Code specified by the commission for the Rajasthan State Transmission System; (k) "Terms & Condition of Supply of Electricity" means the terms and conditions of supply of electricity- 2004 issued by Ajmer Discom and includes any modifications thereof from time to time. (l) "Wheeling" means the operation where by the distribution system and associated facilities of a transmission licensee or distribution licensee as the case may be, are used by another person for conveyance of electricity on charges, terms and Conditions as set birth with in this Agreement; Words and expressions used in this Agreement but not defined herein, shall have meaning assigned to them in the Electricity Act, 2003, and Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulation, 2004, Terms and Conditions of Supply of Electricity-2004 in that order. (2) Ajmer Discom shall continue to supply power to Open Access Consumer against his existing connections for the sanctioned contract demand(s) as detailed above, subject to terms and conditions as modified by this agreement. (3) Ajmer Discom shall wheel_KW power for the consumer on the open access basis on its distribution system from point of injection to the point of drawl as detailed in the Schedule-1 referred to earlier. (4) The wheeling of power by Ajmer Discom on its Distribution System shall be governed by the Open Access Agreement executed by consumer with RVPN under Rajasthan Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations, 2004 and the specified procedure therein. (5) Both the parties agree that the charges for existing connections for the sanctioned Contract Demand(s) as a Discom consumer and charges for Open Access Consumer shall be governed by the tariff and regulatory order in force time to time, except where specific provision has been made in this Agreement. 7. (g) The Open Access Consumer shall have round the clock facility of communication with SLDC through telephone/ mobile with STD and for transmission/ receipt of fax and e-mails. 8. Scheduling The following procedure is agreed upon by the parties for scheduling open power at generation and drawal at the receiving point by Open Access Consumer. (a) The generating station injecting open access power into State Transmission System or generating stations embedded in the Distribution System and injecting open access power directly into Distribution System shall furnish each day at 10 AM to State Load Despatch Centre. Heerapura, a day-ahead generation schedule for each 15-minute block starting from 00.00 hrs for the ensuing day (b)....... (c) The Open Access Consumer at 10 AM each day shall furnish to Ajmer Discom schedule of drawal on 15 minute block basis which it intent to draw against the open access and on 15 minute block basis schedule against contract demand of existing connections, f any, separately. The drawl schedule of open access power shall be limited to the availability shown by the supplying generator in its schedule. 9. Settlement (a) The parties agree that the settlement of mismatch between the schedule injection and actual injection by the generating station injecting open access power into State Transmitting System or by the generating station embedded in the Distribution System for each 15 minute block shall be done in following manner (i) Un-schedule generation not exceeding 5% of the generation/ injection scheduled in any 15 minute block at the UI price specified by the Commission for the state from time to time. (ii) Generation exceeding 5% of the generation/ injection scheduled in any 15 minute block shall be considered as zero and no UI charges shall be receivable by the generating station for such excess generation. (iii) The mismatch between the schedule generation and actual generation shall be determined from the meter data down loaded through MRI and 15 minute blockwise shcedule furnished for each day during the billing month. (c) The mismatch in total drawl scheduled by consumer against open access and against existing contract demand and total actual drawn each 15 minute block shall be done in following manner; (i) Un-schedule drawl not exceeding 5% of the total schedule made by the consumer against open access and existing Discom Connections in any 15 minute block shall be priced at UI rate and payable by the Open Access Consumer. (ii) The balance mismatch in scheduled and actual drawl shall be paid by the Open Access Consumer to the Ajmer Discom at the mutually agreed rates. And in absence of any agreement such drawl would be treated as temporary supply and shall be charged the tariff for temporary supply as contained in Part-II of the "Tariff for Supply of Electricity-2004" booklet for the applicable category. (iii) The mismatch between the schedule drawl and actual drawl shall be determined from the meter data down loaded through MRI and 15 minute block wise schedule furnished for each day during the billing month. 10. Energy Losses It is agreed that the energy losses on account of use of the transmission and distribution system shall be done by the Open Access Consumer. The losses shall be considered in proportion of the energy drawl by the Open Access consumer on the basis of loss levels approved by the Commission for the previous year for the voltage level at which Open Access consumers is connected. (11) Billing Ajmer Discom shall raise the bills at the end of the month for the use of distribution system for wheeling of Open Access power and against the existing Discom connections of the consumer for the following amount. (a) Wheeling charges for the contracted open access power on Discom system as specified by the Commission from time to time. (b) The cross-subsidy surcharge as determined by the commission from time to time under Rajasthan Electricity Regulatroy Commission (Terms and Conditions for Open Access) Regulations, 2004 (c) An additional surcharge as determined by the Commission from time to time in case the consumer availing open access and receiving supply of electricity from a licensee other than his existing distribution licensee of his area of supply. (d) Energy charges for scheduled energy against existing connections for the Contract Demand of 21000 KVA as Discom Consumer as per applicable tariff. (e) Fixed Charges for the contract Demand of 21000 KVA as Discom consumer as per applicable tariff. (f) Minimum bill amount as per tariff applicable in force for the contract demand against the existing connections. (12) Payments. The Open Access Consumer shall pay the payments for the bills raised by the Ajmer Discom within the due date indicated in such bills. In the event of monthly bill(s) not paid in full within the period specified on the bill, the Open Access Consumer agree for Late Payment Surcharge for total bills of Discom as per applicable tariff in force from time to time. (13) Other tariff provisions Both the parties agree that other tariff provisions shall be governed by the following: (a) Billing demand: The Open Access Consumer shall not cause a demand more than 105% of his Contract Demand against his existing Discom's connection. In case he causes a demand or more than 105% of the Contract demand in any 15 minute time block in a particular month, he shall be required to pay extra charge equal to same percentage of the fixed and energy charges against his existing connection bu equal percentage of excess demand caused over and above contract demand. The demand caused by the Open Access Consumer against existing Discom connection in excess of Contract demand shall be computed through following procedure: (i) 15 minute block wise total KWh MRI data down loaded at month and shall be converted in to KW giving total demand caused by Open Access Consumer against existing Discom's connection and open access power. Kwh figures to be divided by time (0,25 hours) to arrive KW. (ii) From 15 minute block-wise total KW demand, the power scheduled by the open access consumer against open access in such block shall be deducted to arrive at 15 minute block-wise actual KW drawn against existing connection. (iii) Maximum KW caused in any 15 minute block during the month (out of 96 blocks X number of days in billing months) shall be considered as actual maximum demand in KW caused by the consumer during such month. Maximum demand in KVA shall be worked out by applying power factor (PF) of 0.9 (90%) for leyy of Demand Surcharge exceeding contract demand against existing connection. (b) Power Factor: The Open Access Consumer shall maintain the average monthly power factor not less than 0.9 for the total power consumer against existing Discom connection and power wheeled on Open Access on single point basis. In case of the average power factor falls below 0.9 (90%), a surcharge of 1% of energy charges computed at the tariff applicable for existing connection shall be charged for total energy consumed against existing Discom connection and power wheeled on open access on single point basis. In the average power factor falls below 0.7 (70%) the installation shall be disconnected and will not be reconnected till the average power factor is improved to the satisfaction of Ajmer Discom. (c) Incentive Scheme-Both parties agree that any incentive scheme applicable for large industrial consumers for encouraging higher consumption through rebate on energy charges by whatever name called will not apply under this agreement. (d) No incentive for maintaining PF above 0.95 shall be admissible to the open access consumer. (14) This agreement shall remain in force during the period of open access permitted by RVPN vide its letter no RVPN/Dir(P8R)/NPP/Open Access/D.1029 dated 28-1- 2005 and thereafter a fresh agreement as a Discom Consumer for such contract demand as may be permitted by Ajmer Discom will have to executed. (15) Both the parties agree that during the term of this agreement the contract demand or contracted open access power and any other terms and conditions agreed initially will not be changed without consent of other.
(3.) On the basis of open access agreements dated 10-3-2005, as mutually agreed the AVVNL billed HZL as per the scheduled/ actual injection and scheduled/ actual drawl under open access and contract demand. However for want of requisite data and software no specific amounts were indicated as UI charges for the mismatch of scheduled and actual drawls simultaneously with other associated charges payable by HZL under the agreements. Instead AVVNL deducted 10% of the energy injected by HZL under the agreements from its CPP towards unscheduled interchange charges as leviable under the agreement dated 10-3-2005. These rule of thumb deductions pending finalization of unscheduled interchange pricing mechanism by the Commission under clause 20 of the Regulations of 2004 aggregated to Rs.9.43 crore for the period April, 2005 to December, 2005.;