Case: West Bengal Electricity Regulatory Commission Vs. Hindalco Industries Ltd. &amp; Others

for the distribution system or associated facilities are to be assessed on applicable distribution network cost, units saleable and units wheeled by all open access customers in the network. The learned counsel for appellant contends that as per CERC (Open Access in Inter-State Transmission) Regulations and WBERC (Terms & Conditions for Open Access -Schedule of Charges, Fees & Formats for Open Access) Regulation, the wheeling charges of the Distributing system should be 0.25 time for short term open access. However, we find from Para 26.0 of the order appealed against, there is no detailed discussion in this respect except holding that 83.54 paisa/kWh shall be the wheeling charges. No particulars been disclosed is the main grievance and Regulations governing wheeling charges have not been applied correctly. The second respondent has stated in its submission that the WBERC determined the wheeling charges in case of WBSEB for 2005-06 at the rate of 56 paisa/kWh and a copy also was filed. In the circumstances with respect to fixation of wheeling charges the matter deserves to be remitted back to WBERC for fresh consideration in the light of the relevant Rules and affording opportunity to appellant. The authority shall take note of the fact that open access within the Distribution area of CESC is applied to a distance of 5 KM and out of 5 KM, 2 KM distance is appellants dedicated transmission line put up at its costs." 6. Upon remand, the matter was again heard, and decided by the Commission vide order dated 16.11.2006. By this order the Commission sought to demonstrate and detail the methodology for determining the wheeling charges payable by respondent No.1. The wheeling charges were re-determined by the Commission at 83.54 paisa per KWH. Again being aggrieved by the aforesaid order, respondent No.1 impugned the same before the Tribunal by way of Appeal No.3/2007. 7. We may notice here that in both the matters before the Tribunal, respondent No.1 had challenged the determination of wheeling charges for the year 2005-06. Initially, respondent No.1 had challenged the order passed by the Commission on 21.11.2005 in Appeal No.1/2006. By order dated 11.7.2006 Appeal No.1/2006 was allowed and the matter was remanded back to the Commission for fresh determination of wheeling charges. It was observed that there was no detailed discussion in the order which would throw light upon the manner and methodology behind determination of wheeling charges. The grievance made by respondent No.1 which was noticed by the Tribunal was that "no particular wheel disclosed is the main grievance and regulation governing wheeling charges have not been applied correctly."8. Taking note of the aforesaid observations, the Commission re-determined the wheeling charges. It is the case of the appellants herein that wheeling charges had been correctly re-determined on the basis of the total distribution network cost as mandated under the Commission (Terms and Conditions for Open Access -Schedule of Charges, Fees & Formats for Open Access) Regulations, 2005; the West Bengal Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations 2005 as well as the West Bengal Electricity Regulatory Commissions (Terms and Conditions of Tariff) Regulations, 2005.9. It is claimed by the appellants that the formula/ methodology/criteria for determining wheeling charges has to be in terms of form 1.27 attached to the Tariff Regulations, 2005. In spite of the clear and categorical statutory provisions contained in the applicable regulations, the appellants have been wrongly directed by the Tribunal to re-determine the wheeling charges on the basis of applicable network of 33 KVW distribution system on which the electricity is being rolled by respondent No.1. The appellants had laid considerable emphasis on the submissions that the determination of wheeling charges based on the interpretation directed by the Tribunal would be ex facie contrary to the scheme contemplated under the applicable regulations framed under the Electricity Act, 2003 governing determination of wheeling charges. A combined reading of all the applicable regulations, according to the appellants, leads to the irresistible conclusion that for determining wheeling charges total distribution cost of the network and not the voltage-wise cost would be the determining factor. The interpretation made by the Tribunal, if accepted, would render the regulation framed by the appellant otiose. The Tribunal incorrectly understood and interpreted the expressions applicable distribution network as the distribution network cost which is to be determined at the relevant voltage level.10. At this stage we need not decide any of the issues raised by the appellants as, in our opinion, the appeals have to be allowed on the short ground that the Tribunal has failed to consider the objection raised by the appellants with regard to the maintainability of the appeal filed by respondent No.1, before the Tribunal.11. Both the appellants had categorically stated before the Tribunal that respondent No.1 has sought to challenge the wheeling charges for the year 2005-06 as determined by the Tribunal in the order dated 16.11.2006. During the year 2005-06 not a single unit of energy was wheeled by respondent No.1 and therefore no wheeling charges were paid/payable. Therefore, the appeal filed by respondent No.1 herein was at best of an academic interest only, as at the relevant point of time when Appeal No.03/2007 was filed the wheeling charges for the year 2006-07 had already been determined. It was also mentioned that for reasons best known to respondent No.1 herein the wheeling charges for 2006 were not challenged in the appeal before the Tribunal. In any event since respondent No.1 had not wheeled any power during the period 2005-06, it did not have to pay any wheeling charges in the first place. Thus, the appeal ought to have been dismissed as having become infructuous. It is emphasised by the counsel for the appellant that detailed written notes were submitted before the Tribunal during the course of hearing in Appeal No.3/2007. Thereafter also written submissions were filed detailing the scope of the issues before the Tribunal. Copies of these written submissions have been placed before us as an annexure to the grounds of appeal.

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

Explanation:
1[ds]7. We may notice here that in both the matters before the Tribunal, respondent No.1 had challenged the determination of wheeling charges for the yearInitially, respondent No.1 had challenged the order passed by the Commission on 21.11.2005 in Appeal No.1/2006. By order dated 11.7.2006 Appeal No.1/2006 was allowed and the matter was remanded back to the Commission for fresh determination of wheeling charges. It was observed that there was no detailed discussion in the order which would throw light upon the manner and methodology behind determination of wheeling charges. The grievance made by respondent No.1 which was noticed by the Tribunal was that "no particular wheel disclosed is the main grievance and regulation governing wheeling charges have not been applied correctly."8. Taking note of the aforesaid observations, the Commissionthe wheeling charges. It is the case of the appellants herein that wheeling charges had been correctlyon the basis of the total distribution network cost as mandated under the Commission (Terms and Conditions for Open AccessSchedule of Charges, Fees & Formats for Open Access) Regulations, 2005; the West Bengal Electricity Regulatory Commission (Terms and Conditions for Open Access) Regulations 2005 as well as the West Bengal Electricity Regulatory Commissions (Terms and Conditions of Tariff) Regulations, 2005.9. It is claimed by the appellants that the formula/ methodology/criteria for determining wheeling charges has to be in terms of form 1.27 attached to the Tariff Regulations, 2005. In spite of the clear and categorical statutory provisions contained in the applicable regulations, the appellants have been wrongly directed by the Tribunal tothe wheeling charges on the basis of applicable network of 33 KVW distribution system on which the electricity is being rolled by respondent No.1. The appellants had laid considerable emphasis on the submissions that the determination of wheeling charges based on the interpretation directed by the Tribunal would be ex facie contrary to the scheme contemplated under the applicable regulations framed under the Electricity Act, 2003 governing determination of wheeling charges. A combined reading of all the applicable regulations, according to the appellants, leads to the irresistible conclusion that for determining wheeling charges total distribution cost of the network and not thecost would be the determining factor. The interpretation made by the Tribunal, if accepted, would render the regulation framed by the appellant otiose. The Tribunal incorrectly understood and interpreted the expressions applicable distribution network as the distribution network cost which is to be determined at the relevant voltage level.10. At this stage we need not decide any of the issues raised by the appellants as, in our opinion, the appeals have to be allowed on the short ground that the Tribunal has failed to consider the objection raised by the appellants with regard to the maintainability of the appeal filed by respondent No.1, before the Tribunal.11. Both the appellants had categorically stated before the Tribunal that respondent No.1 has sought to challenge the wheeling charges for the yearas determined by the Tribunal in the order dated 16.11.2006. During the yearnot a single unit of energy was wheeled by respondent No.1 and therefore no wheeling charges were paid/payable. Therefore, the appeal filed by respondent No.1 herein was at best of an academic interest only, as at the relevant point of time when Appeal No.03/2007 was filed the wheeling charges for the yearhad already been determined. It was also mentioned that for reasons best known to respondent No.1 herein the wheeling charges for 2006 were not challenged in the appeal before the Tribunal. In any event since respondent No.1 had not wheeled any power during the periodit did not have to pay any wheeling charges in the first place. Thus, the appeal ought to have been dismissed as having become infructuous. It is emphasised by the counsel for the appellant that detailed written notes were submitted before the Tribunal during the course of hearing in Appeal No.3/2007. Thereafter also written submissions were filed detailing the scope of the issues before the Tribunal. Copies of these written submissions have been placed before us as an annexure to the grounds of appeal.