Case: HARYANA POWER PURCHASE CENTRE Vs. MAGNUM POWER GENERATION LIMITED &amp; ANR

order, not being challenged by either party. (viii) Despite this order and the clear direction of the Commission that fixed costs have to be paid to the generator irrespective of whether energy is purchased or not, the HERC order dated 23.03.2010 ultimately dismissed the appellants appeal filed under Section 86(1)(f) of the Electricity Act as follows:- Final Order The above order of the Commission on each issue needs to be given a concrete shape by calculating the due amount payable to the either party and whatever is the net to be paid to the petitioner as per the following directions:- After calculating the due amount within a period of one month, first instalment of the same may be paid within a period of two months and the balance amount two months thereafter. This amount however would not be reimbursed by HERC through any claim or through FSA since the respondents have been claiming FSA in respect of MPGL under the head Deemed Generation Charges and the same stands recovered from the electricity consumers. Hence, whatsoever the excess recovery they have made from the consumer on this account, after settlement of account with MPGL in the light of the findings in the earlier paragraphs, the remaining amount either be refunded back to the consumer or to be adjusted against the future filing with the prior approval of HERC. FSA formula approved by the Commission itself provides for subsequent adjustment of/under/over recovery of the same. In passing, the Commission would wish for the revival of the plant to augment the generating capacity in the State. It is advised that both the parties may request a generation expert at the Central Electricity Authority (CEA) Govt. Of India to pay a visit to the site to check up the present state of the plant in presence of both the parties. The fees for this maybe equally shared. Thereafter the parties may work out a scheme for operationalising the plant for the benefit of all the stakeholders by entering into a fresh PPA/renegotiating the existing one which is workable and takes into account the financial interest of both the parties and the interest of the consumers of Haryana at large. (ix) An appeal from this order was also dismissed by the Appellate Tribunal by judgment dated 23.03.2012 in which after setting out the various clauses of the PPA, the Appellate Tribunal held as follows:- 33. The above analysis of Article 8.2 would indicate that the Appellant was under obligation to make available the plant to generate atleast 148.79 MU at 75% PLF. This conclusion is supported by Article 6.1(j) & (k) under which the Appellant has undertaken to supply the Contracted Capacity as defined in Schedule 3 of the PPA and works out to 143.79 for tested capacity of the Plant. These provisions are reproduced below for better understanding and completeness. (i) Make available to HSEB not later than the Required Synchronization Date, the Contracted energy and the Contracted operating Characteristics of each Units; and (k) Operate and maintain the Project so as to provide the HSEB with the Contracted energy and the Contracted Operating Characteristics of the Units reliably over the Term of this Agreement, taking into account permissible degradation. 3.1 Formula for Contracted Electrical Output Contracted Electrical output per year in Million Kwh (MU) = (8760 x 0.75 x 1000) (1-AuxCons.%)xTested Capacity in MW 1000000 = 8760 x 0.75 x 0.965 x 22.67/1000 = 143.79 MU. 34. In the light of above analysis, we hold that the Appellant was under obligation to declare annual availability of the plant to atleast 75% of tested capacity so as to obtain an annual PLF of 75%. 2. Mr. Jayant Bhushan, learned senior counsel appearing on behalf of the appellant has argued that because of the Commissions order of 12.08.2002 and because the power generated by the appellant would impact the consumer as electricity charges would then become very high, the Commission made it clear that the appellants electrical energy was not a source of power which could at all be tapped as a result of which not even a single mega watt of power was supplied or sold by the appellant to the respondent. He, however, contended that this very Commissions order made it clear that this was in the consumer interest, but that the appellant would be entitled to recover its fixed cost, which unfortunately has been missed by both the Commission as well as the Appellate Tribunal in the impugned order. He also argued that both the orders were faulty in their reading of Clause 8.2 of the PPA which cannot be read so that supply at atleast 75% of the Plant Load Factor be made a condition precedent for claiming fixed energy charges, as that clause when properly read makes it clear that the PPA itself made it clear that once the power project has been set up by the appellant, the fixed energy cost will have to be paid in any event. 3. As against this, Mr. Gurinder Singh Gill, learned senior counsel appearing on behalf of the respondent, supported the judgments of the Commission and the Tribunal, and argued that a proper reading of Article 8.2 would make it clear that it would become operative only when declared availability is more than 75% of the Plant Load Factor. 4. Having heard learned counsel for both sides, these appeals can be disposed of on the short ground that the Commissions Tariff Order of 12.08.2003 had made it clear that fixed costs during the currency of the agreement for generating electricity must be paid despite no supply having been made because the tariff order itself interdicted such supply in consumer interest. We have also noted that for the years in question it is clear that the fixed cost that has been demanded by the appellant from the respondent has in fact been collected from the consumer but not paid over to the appellant, which would result in an unjust windfall for the respondent.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. Having heard learned counsel for both sides, these appeals can be disposed of on the short ground that the Commissions Tariff Order of 12.08.2003 had made it clear that fixed costs during the currency of the agreement for generating electricity must be paid despite no supply having been made because the tariff order itself interdicted such supply in consumer interest. We have also noted that for the years in question it is clear that the fixed cost that has been demanded by the appellant from the respondent has in fact been collected from the consumer but not paid over to the appellant, which would result in an unjust windfall for the respondent.