9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (7) TMI 1189 - SC - Indian LawsDetermination of tariff applicable to the Non-Conventional Energy generation projects of Andhra Pradesh - Non-Conventional Energy Development Corporation of Andhra Pradesh Ltd. and Transmission Corporation of Andhra Pradesh Ltd. ('NEDCAP' and 'APTRANSCO' respectively), the Regulatory Commission - fixed the energy purchase rates - restricted sale, procurement and distribution of electricity by the Developers to any other party except APTRANSCO - Power Purchase Agreement ('PPA') - Jurisdiction Regulatory Commission - Feeling aggrieved from the order of the Tribunal the Transmission Corporation of Andhra Pradesh Ltd. as well as Eastern Power Distribution Company of Andhra Pradesh Ltd. have come up in appeal before this Court u/s 125 of the Electricity Act, 2003. the main controversy, in the present case relating to the jurisdiction and fixation of tariff by the Regulatory Commission. HELD THAT - the restriction with regard to third party sales was not only creation of a directive issued or approval granted by the Regulatory Commission, but was actually in furtherance to the contract entered into between the parties. Rights and liabilities arising from a binding contract cannot be escaped on the basis of some presumptions or inferences in relation to the facts leading to the execution of the contract between the parties. The jurisdiction of the Regulatory Commission, in the facts of the case, arises not only from the statutory provisions under the different Acts but also in terms of the contract executed between the parties which has binding force. Lastly, but with great emphasis, it was argued on behalf of the respondents that enforcement of the purchase price at the rate determined by the Regulatory Commission along with complete prohibition on the right of the Non-conventional Energy Generator/Developers to sell generated power to the third parties would compel them to shut down their projects. The rates are so unfair that it would result in extinguishment of the power generating units from the State of Andhra Pradesh on the one hand, while on the other, it is bound to prejudicially affect the larger public interest. According to the respondents they have invested large sums of money in developing these generating units and it will be unfair to compel their closure, particularly, when for all these years they have supplied electricity generated by them solely to APTRANSCO or its predecessors. All these projects, admittedly, were established in furtherance to the scheme and the guidelines provided by the Central Government which, in turn, were adopted with some modification by the State Government. The State Electricity Board implemented the said scheme and initially had permitted sale of generated electricity to third parties, however, subsequently and after formation of the Regulatory Commission which, in turn, took over the functions of the State Electricity Board, the incentives were modified and certain restrictions were placed. The reasons for these restrictions have been stated in the affidavit filed on behalf of the appellants which, as already noticed by us, is not a matter to be examined by this Court in exercise of its extra-ordinary jurisdiction. These matters, essentially, must be examined by expert bodies particularly, when such bodies are constituted under the provisions of a special statute. The two corporations proposed thereunder were to be constituted to perform various functions and to ensure efficiency and social object of ensuring a fair deal to the customer. These objects and reasons clearly postulated the need for introduction of private sector into the field of generation and distribution of energy in the State. Efficiency in performance and economic utilization of resources to ensure satisfactory supply to the public at large is the paramount concern of the State as well as the Regulatory Commission. The policy decisions of these constituents are to be in conformity with the object of the Act. Thus, it is necessary that the Regulatory Commission, in view of this object, take practical decisions which would help in ensuring existence of these units rather than their extinguishment as alleged. In view of our detailed discussion, we dispose of these appeals with the order.
Issues Involved:
1. Jurisdiction of the Regulatory Commission to compel Developers to sell power. 2. Authority of the Regulatory Commission to re-fix the purchase price. 3. Power of the Regulatory Commission to alter State Government policy directions. 4. Plea of estoppel by Developers. 5. Plea of legitimate expectation by Developers. 6. Executive powers of the Regulatory Commission. 7. Binding nature of State Government directions on the Regulatory Commission. 8. Authority to alter Power Purchase Agreements (PPAs). 9. Statutory nature of procurement arrangements/PPAs. 10. Role of the Commission as a regulator vs. tariff determiner. 11. Determination of tariff for private generation by Non-Conventional Energy (NCE) Developers. 12. Reliefs and directions. Issue-wise Detailed Analysis: 1. Jurisdiction of the Regulatory Commission to compel Developers to sell power: The Supreme Court held that the Regulatory Commission has neither the power, authority, nor jurisdiction to compel Developers to sell the power generated by them to APTRANSCO or DISCOMS. This was a significant finding as it clarified the limits of the Regulatory Commission's authority under both the Electricity Act, 2003, and the Andhra Pradesh Electricity Reform Act, 1998. 2. Authority of the Regulatory Commission to re-fix the purchase price: The Court concluded that the Regulatory Commission, having approved the purchase price agreed between Developers and APTRANSCO under the relevant sections of the Andhra Pradesh Electricity Reform Act, 1998, and the Electricity Act, 2003, cannot re-fix the regulatory purchase price by resorting to tariff fixation under Sections 62, 64 read with Section 86(1)(a) of the 2003 Act. Section 86(1)(b), being a special provision, excludes the applicability of Section 86(1)(a) to private Generators. 3. Power of the Regulatory Commission to alter State Government policy directions: The Court held that the Andhra Pradesh Regulatory Commission has no power or authority to alter the policy directions issued by the State Government. The Commission also lacks executive power or plenary power as claimed. This finding reinforced the separation of powers between the State Government and the Regulatory Commission. 4. Plea of estoppel by Developers: The Court ruled in favor of the appellants on the plea of estoppel, indicating that the Developers' argument that the Regulatory Commission should be estopped from altering the purchase price or other terms was not sustainable on facts and law. 5. Plea of legitimate expectation by Developers: Similarly, the plea of legitimate expectation advanced by the Developers was also found unsustainable. The Court held that the Developers could not expect the incentives and terms to remain unchanged indefinitely, especially when the agreements and orders explicitly provided for periodic reviews. 6. Executive powers of the Regulatory Commission: The Court reiterated that the Regulatory Commission does not possess executive powers to issue policy and executive directions in respect of NCE Developers. This finding aligns with the Court's earlier conclusion that the Commission cannot alter State Government policies. 7. Binding nature of State Government directions on the Regulatory Commission: The Court held that the Andhra Pradesh Electricity Regulatory Commission is bound by policy directions already issued by the State Government as long as they are not modified or altered. This ensures that the Commission's actions are consistent with the State's policy framework. 8. Authority to alter Power Purchase Agreements (PPAs): The Court concluded that the Regulatory Commission has no authority to alter or change the PPAs entered between the NCE Developers and the Electricity Board/APTRANSCO. This finding underscores the sanctity of contractual agreements. 9. Statutory nature of procurement arrangements/PPAs: The Court held that the procurement arrangement/PPA is statutory, and the Commission has no authority to interfere with the same. This reinforces the binding nature of these agreements under the law. 10. Role of the Commission as a regulator vs. tariff determiner: The Court clarified that the Commission is just a regulator to approve the PPA entered between the generator and APTRANSCO by examining whether the purchase is economical and in terms of State Policy. The Commission does not have the authority to determine tariffs independently for private generators. 11. Determination of tariff for private generation by NCE Developers: The Court directed that the appeals preferred by the NCE Developers are allowed, and the impugned proceedings of the Regulatory Commission are set aside. The APTRANSCO and associated companies were directed to continue the Power Purchase at the same rate as before the impugned order, until a new PPA is entered by agreement in terms of State Government Policy direction and approved by the Regulatory Commission. 12. Reliefs and directions: The Court remanded the matters to the Andhra Pradesh Electricity Regulatory Commission with directions to hear the NCE Developers afresh and determine the tariff for the purchase of electricity in accordance with the law. The Commission was also directed to re-examine whether it would be in the larger public interest to permit the sale of generated electricity to third parties. The State of Andhra Pradesh was directed to be added as a party respondent in the proceedings. Conclusion: The Supreme Court set aside the Tribunal's order and remanded the matter to the Andhra Pradesh Electricity Regulatory Commission for fresh determination of tariffs and consideration of third-party sales, ensuring that the State Government is included in the proceedings. The Court's judgment clarified the jurisdictional boundaries and reinforced the sanctity of contractual agreements, while also addressing the broader public interest in the regulation of non-conventional energy generation.
|
