CHAIRMAN TAMIL NADU Vs. MADRAS CEMENTS LTD

JUDGEMENT

(1.) THE Appellants are Chairman and the Officials of the Tamil Nadu Electricity Board. M/s. Madras Cements Limited Chennai is the First Respondent. Tamil Nadu State Commission is the Second Respondent.

(2.) THE Appeal has been filed by the Appellant challenging the order dated 2.3.2011 passed by the State Commission directing the Appellant to terminate the Energy Wheeling Agreement entered into between the Appellant Electricity Board and Madras Cement Limited, the First Respondent in respect of wheeling of electricity from its generating plant to its unit at Ariyalur.

(3.) THE short facts are as follows: (a) M/s. Madras Cement Limited, the First Respondent has its cement factory at Alathiyur Works in Ariyalur District. (b) The First Respondent established a coal based thermal power plant with a capacity of 36 MW (2 x 18 MW) for its own consumption. (c) M/s. Madras Cements Limited applied for Appellant's approval for parallel operation of their generators. (d) The Appellant after examining the request made by M/s. Madras Cements Limited granted the approval for parallel operation of 2 x 18 MW generators with the Appellant's Grid through letter dated 15.3.2005. (e) In addition to that, M/s. Madras Cements Limited, the First Respondent applied for a Long Term Open Access under the provisions of the Intra State Open Access Regulations, 2005. Accordingly the Appellant issued approval for Long Term Open Access for Wheeling of 6 MW of power from the 2 x 18 MW Coal based power Plant at Alathiyur works of Perambalur Electricity Distribution Circle. (f) Under the above wheeling approval, 01 MW of power was wheeled to M/s. Madras Cements Limited plant at RR Nagar of Virdhunagar Electricity Distribution Circle and 5 MW of power was wheeled to its plant at Ariyalur. (g) Thereupon, the Madras Cements Limited entered into an Energy Wheeling Agreement with the Appellant on 7.3.2009 for wheeling energy to it's plants. The said Agreement provided for wheeling of 1 MW of power to RR Nagar of Virudhunagar and 5 mw of power to Ariyalur factory. It further provided for payment of certain charges pertaining to the cost of the interfacing CPP with Appellant's grid and other charges. (h) Accordingly, M/s. Madras Cements Limited (R -1) made payment of charges to the Appellant. (i) In view of the relaxation in power grid and commissioning of a generating set at their Ariyalur plant, the wheeling of 5 MW power to their Ariyalur Plant was not required from 4.6.2009. Therefore, M/s. Madras Cements Limited(R -1) decided to withdraw wheeling of 5 MW power to its unit at Ariyalur. Accordingly, M/s. Madras Cements Factory(R -1) sent a letter on 27.6.2009 to the Appellant seeking for termination of the Agreement in so far as it relates to the wheeling of energy to the Ariyalur unit. (j) In reply to above request, the Appellant sent a letter dated 9.7.2009 stating that their request to terminate the Energy Wheeling Agreement to Ariyalur Plant is not feasible for compliance since the Agreement was for a period of 3 years from 7.3.2009 upto 6.3.2012. It further stated that the Agreement could be terminated only in the event of any breach on the part of the Appellant and hence M/s. Madras Cements Factory (R -1) will have to pay the transmission charges and scheduling system operation charges continuously every month till the expiry of the Agreement whether the power is wheeled or not to its Ariyalur unit. (k) Aggrieved by the said letter dated 9.7.2009, M/s. Madras Cements Limited (R -1) filed a Petition before the State Commission seeking to set aside the letter dated 9.7.2009 sent by the Appellant and praying for a direction to the Appellant to terminate the Wheeling Agreement of the First Respondent's 2 x 18 MW captive generating plant at Alathiyur to its unit at Ariyalur and directing the Appellant not to levy any further charges as per the Energy Wheeling Agreement in so far as it relates to Ariyalur Plant. (l) The State Commission, after entertaining the said Petition issued notice to the Appellant and heard the parties. (m) Ultimately, the State Commission by the impugned order dated 2.3.2011, directed the Appellant to terminate the Energy Wheeling Agreement in respect of the captive generating plant at Alathiyur to its unit at Ariyalur and set aside the letter dated 9.7.2009 sent by the Appellant. Aggrieved by this order, the Electricity Board, the Appellant has filed this Appeal.