PATIKARI POWER LTD Vs. HIMACHAL PRADESH ELECTRICITY

JUDGEMENT

(1.) THIS appeal has been filed by M/s. Patikari Power Ltd. against the order dated 16.7.2010 passed by the Himachal Pradesh State Electricity Regulatory Commission ("State Commission") in the matter of determination of tariff for a small Hydro Electric Power Station set up by the appellant.

(2.) THE appellant is a generating company and has set up a small Hydro Electric Power Station of 16 MW capacity in the State of Himachal Pradesh. The State Commission is the first respondent. Himachal Pradesh State Electricity Board, the purchaser of power from the appellant, is the second respondent. The Government of Himachal Pradesh and the HIMURJA, a State Government agency responsible for promotion of renewable sources of energy are the third and the fourth respondents respectively.

(3.) THE facts of the case are as under: 3.1. The Government of Himachal Pradesh in the year 1999 invited proposals from Indian/International companies for implementation of Hydro Electric Projects in the Private Sector on 'Build, Own, Operate and Maintain (BOOM)' basis for various projects which, inter alia, included the 16 MW Patikari Hydro Electric Project. It also stated that the State Electricity Board, the respondent no. 2 herein, would buy the whole of power generated by the Project at rate and conditions to be decided by the State Government and the rate would not be less than Rs. 2.25 per kWh. 3.2. M/s. East Indian Petroleum Ltd. ("EIPL"), predecessor in interest of the appellant, filed a proposal for development and implementation of Patikari Hydro Electric Project and subsequently a Memorandum of Understanding ("MOU") was executed by the State Government on 21.6.2000 in favour of M/s. EIPL for review of the Detailed Project Report ("DPR") prepared by the respondent no. 2 for implementation of the Project. 3.3. M/s. EIPL on 9.11.2001 entered into an Implementation Agreement ("IA") with the Government of Himachal Pradesh. The IA envisaged incorporation of a separate public/private Limited company for implementation of the Project. Accordingly, a Tripartite Agreement dated 9.11.2001 was also executed between the State Government, M/s. EIPL and the appellant to, inter alia, build, own, operate and maintain the Project. 3.4. The appellant after obtaining various statutory clearances for implementation of the Project approached the respondent no. 2 for determination of tariff in terms of the global invitation of tender. 3.5. In January, 2003 the State Government and the respondent no. 2 prescribed the tariff for the power generated from the Project at Rs. 2.25 per kWh. On 14.1.2003 the appellant executed a Power Purchase Agreement ("PPA") with the respondent no. 2 at a tariff of Rs. 2.25/Kwh. 3.6. The State Commission having already been constituted on 6.1.2001, vide its order dated 5.9.2003 held the PPA dated 14.1.2003 executed between the appellant and the respondent no. 2 as void ab -initio, non -est and inoperative and directed the parties to file a PPA in accordance with the PPA guidelines issued by the State Commission. Accordingly, after obtaining the approval of the State Commission, the appellant and the respondent no. 1 entered into a PPA on 5.7.2004. 3.7. On 18.6.2007 the State Commission notified the Regulations for power procurement from renewable sources and cogeneration by the distribution licensee. According to the Regulations, the Commission may determine tariff by a general order for small hydro projects not exceeding 5 MW capacity and by special order for small hydro projects of more than 5 MW and not exceeding 25 MW capacity, on individual project basis. These Regulations were not applicable to the PPAs, which were approved prior to commencement of the Regulations and were not subjected to the provisions of the State Commission's Regulations. 3.8. On 12.11.2007, the State Commission amended the above Regulations by introducing a proviso under which the State Commission in order to promote generation of electricity from renewable sources could review or modify the PPAs approved prior to commencement of the Regulations or where after the approval of the PPA there is change in statutory laws, or rules or the State Government's Policy. 3.9. The appellant commissioned the project in the beginning of the year 2008 at a cost of Rs. 117.60 crores as against the approved cost of Rs. 125.90 Crores by the respondent no. 2. 3.10. The appellant in August 2008 filed a petition being no. 184 of 2008 before the State Commission under Section 62 and 86 of the Electricity Act, 2003, praying for determination of tariff in respect of Patikari Hydro Electric Project. Similar petitions were also filed by other project developers. 3.11. The State Commission by its common order dated 29.10.2009 disposed of the petition no. 184 of 2008 and batch and decided to consider each petition for review or modification of already concluded PPA on merits in terms of its Regulations. 3.12. The appellant in compliance with the order dated 29.10.2009 submitted an application being Petition no. 201 of 2009 praying for determination of tariff. 3.13. The State Commission by its order dated 16.7.2010 partly allowed the Petition nos. 184 of 2008 and 201 of 2009. The State Commission only passed the benefit of change in law/change in State Government Policy to the appellant after the date of execution of the PPA dated 5.7.2004 @ 29 paise/kWh prospectively but did not determine the tariff in respect of the Project. Aggrieved by the impugned order dated 16.7.2010, the appellant has filed this appeal.