GUJARAT URJA VIKAS NIGAM LIMITED Vs. EMCO LIMITED

JUDGEMENT

(1.) The 2nd respondent herein, the Gujarat Electricity Regulatory Commission is a body constituted under Section 82 of the Electricity Act, 2003 (hereinafter referred to as "the Act"). In exercise of its statutory powers under Sections 61(h), 62(1)(a) and 86(1)(e) of the Act the 2nd respondent issued Order No.2 of 2010 dated 29.01.2010 (hereinafter referred to as the "1st Tariff Order") determining the tariff for procurement of power by the Distribution Licensees in Gujarat from Solar Energy Projects. The said order was issued after an elaborate consideration of the various relevant factors including the policy guidelines of the State of Gujarat and Union of India. Under the said order, tariff for procurement of electricity generated by PROJECTS employing Solar Photovoltaic (SPV) Technology was fixed at Rs.15 per kWh for the initial 12 years starting from the date of commercial operation of the project and Rs.5 per kWh from the 13th year to 25th year. The said order was declared to have had come into force w.e.f. 29.01.2010. Various financial and operational parameters taken into consideration for determining the tariff are mentioned at para 4 of the said Order2. One of the factors taken into consideration is the 'Rate of Depreciation'. It is specified at para 5 of the Order that the tariff fixed under the said Order "took into account the benefit of accelerated depreciation under the Income Tax Act and Rules". It is further declared that "for a project that does not get such benefit, the Commission would, on a petition in that respect, determine a separate tariff taking into account all the relevant facts."

(2.) The 1st respondent produces electric energy (power) from one of the PROJECTS. The appellant and 1st respondent3 entered into a Power Purchase Agreement (PPA) dated 09.12.2010 for sale and purchase of electricity from the 5 MW project to be established by the 1st respondent in Surendra Nagar district of Gujarat. The provisions relevant for the dispute in the present appeal are Clauses 5.1 & 5.2,

(3.) However, after entering into the abovementioned PPA, respondent no.1 decided to change the PROJECT'S location. Therefore, a Supplemental Agreement was entered into between the appellant and respondent no.1 on 07.05.2011 making appropriate and necessary modifications to the PPA dated 09.12.2010. However, Articles 5.1 and 5.2 of the original PPA remained unaltered.