ORISSA ELECTRICITY REGULATORY COMMISSION BIDYUT NIYAMAK BHAWAN UNIT-VIII, BHUBANESWAR **** **** ****

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1 ORISSA ELECTRICITY REGULATORY COMMISSION BIDYUT NIYAMAK BHAWAN UNIT-VIII, BHUBANESWAR **** **** **** Present: Shri B.K.Das, Chairperson Shri S.K.Jena, Member Shri K.C.Badu, Member Case No.77 of M/s. Tata Sponge Iron Ltd. Bileipada, Joda, Keonjhar. -Vrs.- Orissa Power Transmission Corporation Ltd. Bhubaneswar. Petitioner Respondent For the petitioner : Mr. L Pangari and Mr. P.P. Mohanty, Advocates For the Respondent : Mr. N.C.Panigrahi, Sr. Advocate Mr. L.N.Mohapatra & Mr. S.R. Panigrahi, Advocates Date of hearing: Date of order ORDER Hearing taken up on the maintainability of the case. The preliminary objection of the Respondent to the petition dated of the Petitioner on maintainability of its application and the citations of case-laws filed by both parties are taken in to record. 2. Heard. 3 Mr.L.Pangari learned Counsel for the petitioner stated that his client has filed this petition before the Commission for adjudication of dispute as to refundability of excess supervision charges collected from the Petitioner by the respondent-optcl in respect of construction of dedicated transmission line 7.1 K.m.of 220 KV S/C line on D/C tower from Joda Grid Sub-Station to M/s.Tata Sponge Iron Limited, Joda with one no.220kv feeder bay at Joda Grid Sub- 1

2 Station. The Petitioner as a manufacturer of sponge iron has installed two Captive Generating Plants of 7.5 M.W.and 18.5 M.W.in its premises at Bileipada, which operates using the waste heat of its Kiln No.1,2 and 3.For connectivity of the Captive Generating Plant with Joda grid, the Petitioner requested the Respondent-OPTCL to sanction the estimate and to fix supervision charges and the Chief Engineer (T.P),OPTCL vide its letter dated has approved technical sanction for construction of 220 K.V S/C line on D/C tower from Joda Grid Sub- Station to the petitioner s premises and further directed to execute the work after payment of supervision charges. The total amount of construction of 220 K.V line and bay at Grid was estimated at Rs.12,01,87,600/- and supervision charge was fixed at Rs.1,98,30,800/-. 4 The Assistant General Manager, Electrical, OPTCL, Jharsuguda Vide its Letter dated pursuant to Letter No.1192 dated of the Chief Engineer (T.P), OPTCL directed to the Petitioner- Company to deposit a sum of Rs.1,98,30,800/- as supervision charges for construction of 220KV line and bay before starting the work. Accordingly the petitioner Company submitted a Demand Draft of Rs.56,63,400/- after deducting TDS and Education Cess from the total amount of Rs lakhs towards part payment of supervision charges and also on the Petitioner-Company has submitted another Demand Draft of Rs.56,63,400/- after deducting TDS and Education Cess from the total amount of Rs lakhs towards part payment of supervision charges for construction of the aforesaid line and Bay. After part payment of Rs.1,20,000/- (includingtds & Education Cess) towards supervision charge out of Rs.1,98,30,800/- the Petitioner-Company further requested to review and reexamine the sanctioned estimate,as the estimate amount of Rs.12,01,87,600/- was considered to be on the higher side for a line of 7 K.M and its bay as the total value of the project considering all the cost is found to be Rs.7,41,74,111/- 5 On the Petitioner-Company approached the Respondent-OPTCL for charging the aforesaid line as the project work including bay at Joda grid was nearing completion. In response to the approach of the Petitioner the 2

3 Respondent asked for deposit of the differential amount of supervision charges based on the initial estimate only. As such the Petitioner deposited the amount under protest to avoid further delay in commissioning of the aforesaid line. The balance amount of Rs.73,99,987/- after deducting TDS and education cess from the total amount of Rs.73,398 lakhs was submitted, vide DD bearing No dated The Petitioner has thus deposited the total amount of Rs lakhs according to the initial letter of the respondent bearing No.TR/WKL/IV/175/2005/ 1192 dated towards the supervision charges based on the estimated amount of Rs.12,01,87,600/-. By letter dated the petitioner- company submitted the details of the actual expenditure of construction for 220 KV line and Bay amounting to Rs.7,41,05,000/- instead of Rs.12,01,87,600/- as estimated earlier. The petitioner also submitted the details of purchase orders / work orders along with statement of cost estimated by the respondent OPTCL and cost actually incurred by the petitioners and requested to revise the supervision charges. 6 According to the letter dated of the Chief Engineer(T.P), OPTCL and as per direction vide letter dated of the Assistant General Manager (Electrical),OPTCL, Jharsuguda, the Petitioner furnished the volume of concrete use in its foundation, the total type of tower used including weight, the volume of RR machinery done for protecting the tower foundation and other details, the actual bill of materials of PLCC systems and requested the respondent-optcl to refund the excess amount of supervision charges which has been collected from petitioner. In the meanwhile, almost nine months elapsed, no action was taken by the Respondent in this regard. 7 Mr.Pangari the learned Counsel for the Petitioner further submitted that the Respondent-OPTCL has forcibly collected the supervision charges from it at the rate of 16% of the total estimated cost, which was paid by the Petitionercompany under protest only to avoid the delay of construction of the said line and bay etc and the connectivity of the line with Joda Grid Sub-station. Being a captive generating plant, the Petitioner-Company can construct, maintain and 3

4 operate dedicated transmission line as per the provision of S.9 of the Electricity Act, 2003 hereinafter referred to as the Act, hence the Petitioner-company is not to pay the supervision charges to the Respondent in respect of construction of its 220 KV line from its CGP to Joda Grid Sub-station and bay at the said sub-station. He also stated that the supervision charge is leviable only on the works executed for and on behalf of a consumer by the respondent.in the present case, since the respondent has not constructed/ executed the aforesaid line and bay for and on behalf of the petitioner- company, the levy of supervision charges by the respondent is illegal, arbitrary, bad in law and violates the provisions of the Act and rules made thereunder. The aforesaid line & bay at Joda Grid sub-station has been constructed by the approved Contractor of OPTCL under efficient supervision of its Engineers. It is also approved by the Electrical Inspector upon deposit of all statutory dues permitted for energisation. Hence it is not liable to pay the supervision charges, and is entitled to get refund of the same. 8 Further the learned counsel for the Petitioner stated that the Chief Engineer (T.P), OPTCL and the AGM(Electrical),OPTCL, Jharsuguda have clearly admitted that the Petitioner-Company is entitled to get refund of supervision charges but till to-day no action has been taken by the respondent. In the above circumstances, the Commissioner may direct the respondent-optcl to revise the technical sanction order dated on the basis of actual expenditure incurred by the Petitioner-Company and refund of the excess supervision charges illegally collected from it and the Commissioner may decide the present case as per the provision of Sec. 86(1)(f) of the Act as the captive generative plant of the Petitioner-Company is treated as a generating Company as per the provisions of Sec.2(28), (29) & (30) of the said Act. 9 Mr. N.C. Panigrahi, Sr. Advocate on behalf of the respondent OPTCL stated that the Petitioner has filed this petition dated and also filed, additional affidavit in support of maintainability of the petition u/s 86(1)(f) of the Act and contends that the Petition dtd is beyond the scope of 4

5 adjudication by this Commission u/s 86(1)(f) of the Act. The Commission has been empowered u/s 86(1)(f) of the Act to adjudicate disputes between generating companies and licensees or to refer such disputes to arbitration. The scope of this power is confined to matters covered under the Act and Regulations framed thereunder. He also stated that the petitioners on its own admission is a Captive Generating Plant (CGP) and cannot be named as a generating company for the purpose of adjudication of disputes in question. The CGP has distinct identity and stands different from a generating company. S.9 of the Act, 2003 stipulates to regulate the CGP in the same manner as a generating station of a generating company for the purpose of grid discipline in respect of its supply of electricity through the grid. It cannot, therefore, be assumed that the petitioner has been identified as a generating company for the purpose of S. 86(1)(f) of the Act,2003. The submission made by the petitioner on defining Ss.2(28) and 2(30) in contrast to S.2(8) of the Act,2003 is misconceived, and it being a matter of law. The Respondent craved leave to make detailed submission of the matter at the time of hearing. Since a CGP is allowed to establish, operate and maintain dedicated transmission line, it cannot be equated to acquire the place of a generating company u/s 86(1)(f) of the Act. A CGP can establish dedicated transmission line, if it complies the requirement of Grid Code and standards of grid connectivity, technical standards for construction of Electrical line under supervision of the Respondent. 10 Mr. Panigrahi, further stated that the judgment of the Apex Court reported in AIR SC 3588 (para 101, page 3619) cited by the petitioner in support of its submission has no application to the question of maintainability of the petition and the Respondent will make elaborate submission on the matter at the time of hearing. The present proceedings being limited to the question of maintainability of the petition, the Respondent refrained from dealing with the allegation on merits and reserved its rights to make its submission on the merit of the petition in the event such question arises. So the petition of the Petitioner-Company seeking adjudication by the Commission is liable to be dismissed as not maintainable and in the light of order passed by the OERC on 5

6 in the case of M/s Rohit Ferro-Tech Ltd. Vrs. OPTCL in case No.76 of 2007 which is also applicable to the present case. 11 After hearing the parties on maintainability of the petition and perusal of case records we admit the case as the petitioner in this case is not a consumer as dealt in Case No.76/07 of OERC but a Captive Generating Company Sec. 86(1)(f) the Act stipulates that the Commission can adjudicate upon the disputes between the licensees and generating companies and can refer any dispute for arbitration. The question to be settled here is whether a CGP is a Generating Company within the meaning of Section 2(28) of the Act,2003 eligible for raising a dispute with OPTCL a licensee. 12 It would be interest to quote the provisions relevant to the issue under consideration from the Electricity Act,2003 : 2(28):- generating company means any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person, which owns or operates or maintains a generating station; 2(29):- generate means to produce electricity from a generating station for the purpose of giving supply to any premises or enabling a supply to be so given; 2(30):- generating station or station means any station for generating electricity, including any building and plant with step-up transformer,switch-gear, switch yard,cables or other appurtenant equipment, if any,used for that purpose and the site thereof; a site intended to be used for a generating station, and any building used for housing the operating staff of a generating station, and where electricity is generated by water- power,includes penstocks,head and tail works, main and regulating reservoirs, dams and other hydraulic works,but does not in any case include any sub-station; 6

7 13. A reading of the aforesaid provision leads us to conclude that this plant is generating power and supplying to a premises i.e the premises of the petitioner s Company for industrial production. Since it is generating electricity in accordance with Sec. 2(30) of the Act, it is a generating station. As presented to us T.S.I.L. owns this generating station. Hence in accordance with Section 2(28) of the act, the petitioner is a generating Company. In deed a CGP is only a species of generating station broadly defined in S. 2(30) of the Act, 2003 the owner of CGP is a generating company as defined in S. 2(28) of Act. As the Petitioner is satisfying the requirement of generating Company it can as well seek for adjudication of a dispute u/s 86(1)(f) of the Act, Nothing turns on the argument that a CGP is a special category or has a special identity because it is allowed to contract, maintain and operate dedicated transmission lines as per S. 9(1) of the Act. For, a generating company also has the same power, vide S. 2(16) of the Act. 15. In this connection it is worthwhile to refer to the second proviso to S. 9(1) of the to the Act to the effect that a CGP does not require a licence for supply power to a licensee, just as generating company does not require a licence, vide S.7 of the Act. The said provisions run thus:- XXXXX XXXX Provided further that no licence shall be required under this Act for supply of electricity generated from a captive generating plant to any licensee in accordance with the provisions of this Act and rules and regulations made thereunder and to any consumer subject to the regulations made under sub- Section (2) of S. 42. S.7:- Generating company and requirement for setting up of generating station - Any generating company may establish, operate and maintain a generating station without obtaining a licence under this Act if it complies with the technical standards relating to connectivity with the grid referred to in clause (b) of S.73. 7

8 It is also quoted in the fifth order of the Electricity (Removal of difficulty) vide S.O.794 (E), dated 9 th June, 2005, published in the Gazette of India, Extra, Pt.II, S.3(ii), dated 9 th June,2005 that a generating Company or a Persons setting up a captive generating plant shall not be required to obtain licence under the Act for establishing, operating or maintaining a dedicated transmission line if such Company or persons complies with the following:- a) Grid code and standards of grid connectivity; b) Technical standards of construction of electrical lines; c) Systems of operation of such a dedicated transmission line as per the norms of system operation of the concerned State Load Despatch Centre (SLDC) or Regional Load Despatch Centre (RLDC); d) Direction of concerned SLDC or RLDC regarding operation of the dedicated transmission lines. 16. The Act had in any case given the stipulation with respect to dispute resolution regarding availability of transmission facts by the Commission under second Proviso to Section A generating Company can own a generating station to discharge the functions as define u/s 10 of the Act. But though every generating station cannot be qualified as a CGP as defined u/s 2(8) of the Act, a CGP is nevertheless a particular species of generating station. Hence a CGP cannot be denied the status of a generating Company for adjudication u/s 86(1) (f) of the Act, which we admit this petition for further hearing. 18. Put up of the matter on at 11 AM for further hearing. Sd/- Sd/- Sd/- (K.C. Badu) (S.K. Jena) (B.K. Das) Member Member Chairperson 8