chhattisgarh state electricity regulatory commission (fbc) boiler in which a fuel mixture of...
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Petition No. 25 of 2012(M)
In the Matter of
Petition under section 86(1)(f) of the Electricity Act, 2003.
M/s Salasar Steel & Power Ltd. …. Petitioner
V/S
Chhattisgarh State Power Distribution
Co. Ltd., Daganiya, Raipur (C.G.) …. Respondent
Present: Narayan Singh, Chairman
Vinod Shrivastava, Member
ORDER (Passed on 29.10.2014)
1. M/s Salasar Steel & Power Ltd., the petitioner or M/s Salasar
herein, is a company registered under the Companies Act, 1956.
The Petitioner has set up a 15 MW Power Plant and a Sponge Iron
Plant of 2x100 TPD capacity at village Gerwani, Raigarh (C.G.) The
15 MW power plant of the Petitioner is designed to harness the
waste heat released by the sponge iron plant, to produce electricity,
through a waste heat recovery (WHR) boiler, to the tune of 5 MW.
The Petitioner has also separately installed as Fluidised Bed
Combustion (FBC) boiler in which a fuel mixture of dolachar, coal
washery rejects and F-grade coal is used. The Petitioner is
connected to the 132 KV Raigarh sub-station through 132 KV
dedicated single circuit line for evacuation of power.
2. Respondent is the Chhattisgarh State Power Distribution Company
Ltd. (CSPDCL). CSPDCL is responsible for distribution of electricity
within its licensed distribution area as well as procurement of
surplus power from various sources.
Chhattisgarh State Electricity Regulatory Commission Shanti Nagar, Irrigation Colony, Raipur - 492 001 (C.G.)
Ph. 0771-4048788, Fax: 2445857 Website: www.cserc.gov.in, E-mail: [email protected]
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Petitioner’s Submission
3. The petitioner submitted the followings:
(a) The Petitioner is aggrieved on account of the whimsical and
arbitrary application of the Order, dated 27.11.2008 passed by
the Commission is Suo-Motu Petition No. 15 of 2008, by the
CSPDCL which has been subsequently upheld by the Hon'ble
Appellate Tribunal of Electricity vide judgment dated
28.04.2010 in Appeal no. 32 of 2009. The Petitioner is also
aggrieved due to the selective interpretation of the Interim
Order passed by the Hon'ble Supreme Court in Civil Appeal
nos. 5683-5685 of 2010 as per its own convenience.
(b) While the Respondent has adjusted the Parallel Operation
Charges (POC) already paid by the Petitioner for FY 2009-10
against the cross-subsidy surcharge payable, since the
Petitioner could not meet the requirement of a Captive Power
Plant ["CPP"] under Rule 3 of the Electricity Rules, 2005, it has
failed to levy such cross-subsidy surcharge in accordance with
the Order dated 27.11.2008 and Judgment dated 28.04.2010,
wherein concession has been extended to co-generation plants
and only 50% cross-subsidy surcharge may be levied when
the consumption of the industry is below the power generated
by the co-generation plant.
(c) Vide order dated 27.11.2008 in Suo Motu P. No. 15/2008(M),
the Commission has held as under:-
“This facility provided to a co-generation plant will, however,
not be available in case of the power generated using the
other boilers which have been installed primary for
optimization of capacity and as these boilers have no direct
relationship with the operation of the sponge iron plant.
Therefore if the consumption of the industry exceeds the
generation of the cogeneration plant calculated on an annual
basis, in proportion of the capacity of the boiler, cross-subsidy
shall be payable at full rate on the amount of electricity
consumed in excess of generation from WHR boilers. The
company should declare the potential of power generation
from the steam generated by waste heat recovery boiler and
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other boilers to the Board, since both the boilers support the
same turbine for generation of electricity.
(d) Aggrieved by the order dated 27.11.2008 passed by this
Commission, the Respondent licensee preferred an appeal
before the Hon'ble Appellate for Electricity, New Delhi, being
Appeal No. 32 of 2009. The Hon'ble Tribunal, vide Judgment
dated 28.04.2010 has upheld the order of the Commission and
has further dismissed the appeal, being devoid of merit.
"As a matter of fact by letter dated 27.08.2008, the State
Commission sought clarification from the Ministry of Power as
to whether the Sponge & Iron industry can be allowed to use
electricity generated through waste heat recovery by paying
cross-subsidy surcharge. By letter dated 06.09.2008 the State
Commission sought a similar clarification from the Ministry of
New and Renewable Energy. By the reply dated 22.12.2008,
the Ministry of Power forwarded the opinion of the CEA to the
State Commission, which states as follows:
"6. In the situation described by the CSERC the generating
plants set up by the sponge iron industry may be treated as
co-generation plants acting as independent power producer,
which would be at liberty to use part of their power
themselves and sell the surplus power to any entity.
(e) Further, by another letter dated 18.08.2009, the Ministry of
power gave the following suggestion to the State
Commission:-
"2. The FOR vide their letter No. 15.4/2009-GC-MOP/FOR
/CERC dated May 12, 2009 has informed that the issue was
discussed in the tenth meeting of FOR held in Chennai on
January 30, 2009. A presentation was also made by the
Chairperson, CSERC in the meeting, relevant extracts of which
are as follows: "CSERC has resolved this issue through
imposition of cross subsidy surcharge on the electricity
consumed by Sponge Iron Plant. A view also emerged that the
SERCs could consider making the cross subsidy surcharge zero
for cogeneration plant in view of the provisions of Section
86(1)(f) of the Act."
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(f) The Respondent licensee further preferred appeals before the
Hon'ble supreme Court of India, being Civil Appeal No. 5683-
5685 of 2010 against the Judgment dated 28.04.2010 of the
Hon'ble Tribunal. The Hon'ble Apex Court has been pleased to
admit the appeals and has further stayed the operation of the
impugned orders.
(g) The Petitioner informed the Commission that the respondent
had not yet started billing the petitioner for cross subsidy
surcharge @ 50% in accordance with the order dated
27.11.2008 in Suo Motu P. No. 15 of 2008(M) passed by this
Commission.
(h) That vide letter dated 10.06.2011, the Commission informed
the Respondent with a copy to the Petitioner that the
Petitioner could not maintain the CPP status during FY 2009-
10 since the captive consumption was below 51%.
(i) That the office of the C.E. (BR), CSPDCL, Bilaspur, vide letter
dated 15.07.2011 further wrote to the Sr. Accounts Officer,
CSPDCL, Bilaspur that the Petitioner had failed to qualify as
CPP for FY 2009-10 due to which the Petitioner was liable to
pay cross-subsidy surcharge to the Respondent. The Sr.
Accounts Office was therefore directed to issue Supplementary
Bill provisionally for an amount of Rs. 6,10,150/-.
(j) The Letter dated 15.07.2011 also directed the Sr. Accounts
Officer, CSPDCL, Biaspur to issue the Supplementary Bill for
cross-subsidy surcharge to the Petitioner with the following
remark –
"The billing of cross subsidy surcharge is provisional. The
outcome of order pending before the Appellate Tribunal for
electricity and the Hon'ble Supreme Court of India on the
subject matter is binding to both CSPDCL and Captive Power
Generators."
(k) That consequently, a Supplementary Bill dated 23.08.2011
was issued by the Sr. Accounts Officer, CSPDCL, Bilaspur to
the Petitioner for Rs. 6,10,318/- on account of cross-subsidy
surcharge for FY 2009-10. It is to be noted that the cross
subsidy surcharge has been calculated at normal rate without
extending the 50% concession granted by the Commission
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vide its order dated 27.11.2008 in Suo Moto Petition No. 15 of
2008 (M) for co-generation plants. The Supplementary Bill has
also incorporated the remark as directed by the Office of the
C.E. (BR) CSPDCL, Bilaspur vide it Letter dated 15.07.2011.
(l) Aggrieved by the incorrect calculation of cross-subsidy
surcharge for the Petitioner for FY 2009-10, the Petitioner vide
letter dated 29.09.2011 requested the Respondent to revise
the Supplementary Bill dated 23.08.2011 by extending the 50
% concession on cross-subsidy surcharge to Petitioner's co-
generation power plant, in terms of the Order dated
27.11.2008 in Suo Moto Petition No. 15 of 2008 (M) passed by
this Commission.
(m) That instead of refunding the amount due to the Petitioner in
terms of Letter dated 29.09.2011, the Respondent vide its
regular bill for the month of February 2012, has billed
miscellaneous charges amounting to Rs. 6,10,318/- for the
cross-subsidy surcharge payable by the Petitioner for FY 2009-
10. As per the said bill, the amount was due on 19.03.2012.
(n) That having no other option available, the Petitioner vide letter
dated 23.03.2012 was constrained to make the payment of
the entire regular bill for the month of February, 2012,
including the incorrect amount of Rs. 6,10,318/- for cross-
subsidy surcharge for FY 2009-10, under protest.
(o) Petitioner has further submitted that this Commission's order
dated 15.12.2011 in P. No. 42/2011 and P. No. 30/2011 dated
29.12.2011 in P. No. 43/2012 and dated 26.06.2012 in P. No.
04/2012 wherein the Commission has directed that the
recovery of cross subsidy surcharge be kept under abeyance
in the matter is pending before the Hon'ble Supreme Court are
decided. Also the due adjustment of POC charges already paid
are not being done. As a matter of principle, POC is only levied
on the CPPs but not on the IPPs, therefore levy of cross
subsidy surcharge and POC shouldn’t be done simultaneously.
4. With the above submissions in this petition, the petitioner has
sought following reliefs:
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(a) Direct the Respondent to revise the Supplementary Bill dated
23.08.2011 issued to the Petitioner incorporating the correct
amount of cross-subsidy surcharge;
(b) Direct the respondent to refund the amount of Rs. 6,10,318/-
recovered illegally on account of incorrect calculation of cross
subsidy surcharge payable by the petitioner for FY 2009-10,
along with interest at prevalent bank rates.
(c) Direct the respondent to pay the amount of Rs. 11,62,582/-
due to the petitioner, along with interest at prevalent bank
rates;
CSPDCL’s Submission
5. The respondent has submitted that the case CA No 5683-5685/2010
for clarification/modification of the interim order passed by Hon’ble
Apex Court is under active consideration and has bearing on this case,
the Commission should not proceed in this case. In reply to the
petition, Respondent CSPDCL has submitted as follows on 19.12.2012
and its subsequent submissions:
(a) The petitioner has questioned the amount provisionally
demanded in supplementary bill dated 23.08.2011 for 2009-
10. The petitioner seeks to rely upon the order dated
27.11.2008 passed by this Commission in P. No. 15 of 2008
which was upheld by the judgment dated 28.04.2010 in
Appeal No. 32 of 2009 of the Hon'ble APTEL, the operation of
which was stayed by the order dated 02.08.2010 of the
Hon'ble Supreme Court in Civil Appeal Nos. 5683-5685 of
2010. The petitioner wrongly alleges that the respondent has
selectively interpreted the order of the Hon'ble Supreme Court
and has whimsically and arbitrarily applied the Commission's
order dated 27.11.2008. The petitioner also relies upon this
Commission's order dated 15.12.2011 in P. No. 42/2011 and
P. No. 30/2011 dated 29.12.2011 in P. No. 43/2012 and dated
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26.06.2012 in P. No. 04/2012 wherein the Commission has
directed that the recovery of cross subsidy surcharge be kept
under abeyance in the matter is pending before the Hon'ble
Supreme Court are decided and the Commission had also
observed that the due adjustment of parallel operation
charges had not been given.
(b) The pending appeal before the Hon'ble Supreme Court
pertains to the year 2006-07. It is not relevant at all to the
present supplementary bill raised by the respondent which
pertains to the year 2009-10.
(c) The Commission's order dated 27.11.2008 had held, inter alia,
that the supply of power to the industry of the company
therein from its generating plant in that case during 2006-
2007 constitutes a violation of the provision of the Act and
that, while no penalty was imposed for the same, the
consumption of electricity generated by its power plant shall
attract cross subsidy to be paid to the licenses as a logical way
to regularize such consumption. It was also held that the
company therein shall pay cross subsidy surcharge at half the
normal rate for the energy consumed during 2006-07. For
subsequent years, the company was required to declare the
potential power generation from the steam generated by WHR
boilers and the other boilers which support the same turbine
for generation of electricity, and that the cross subsidy shall
be payable at full rate on the amount of electricity consumed
in excess of generation from WHR boilers if the consumption
of the industry exceeds the generation of the cogeneration
plant calculated on an annual basis in proportion to the
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capacity of the boiler. That order was challenged before the
Hon'ble Tribunal in appeal No. 32 of 2009.
The Commission had also passed an order dated 23-01-
2009 in Petition Nos. 10 & 11 of 2008 in the case of Aryan
Coal Benefication Ltd. wherein the Commission, inter alia,
followed its earlier order dated 27.11.2008 with regard to the
legality of the supply of power from its own generating plant
in the circumstances of the case and with regard to the
liability to pay cross subsidy surcharge to the licensee for the
electricity consumed out of the electricity generated. In this
order, the Commission had also held that the parallel
operation charges was not payable where the generating plant
did not qualify as a CPP, and that the same should be
adjusted. This order was challenged before the Hon'ble
Tribunal in Appeal No. 119 of 2009 by the licensee. It was also
challenged by Aryan Coal Benefication Ltd. in Appeal No. 125
of 2009.
The common judgment dated 09.02.2010 of the Hon'ble
Tribunal disposing of Appeal Nos. 119 of 2009 and 125 of
2005 held that the supply of electricity for its own industry out
of the electricity generated by itself, even if does not qualify to
be a CPP, does not require a license or open access, and that
the Commission was right in holding that the company was
liable to pay cross subsidy surcharge for the past and for
future also the Aryan Coal Benefication Ltd. may continue to
supply even without qualifying as CPP on payment of cross
subsidy surcharge.
Substantially following the same lines of its aforesaid
judgment dated 09.02.2010, the Hon'ble Tribunal passed
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judgment dated 28.04.2010 in Appeal No. 32 of 2009 and
other similar connected appeals upholding the order of the
Commission dated 27.11.2008 with respect to payment of
cross subsidy surcharge for supply of electricity to the industry
of the company from the electricity generated by the
company. The Hon'ble Tribunal also upheld the Commission's
order with respect to the rate of cross subsidy surcharge at
50% for the energy consumed out of cogeneration for 2006-
07.
The aforesaid judgments of the Hon'ble Tribunal were
challenged before the Hon'ble Supreme Court in CA Nos.
4968-4969 of 2010 and CA Nos. 5683-5685 of 2010. In CA
Nos. 4968-4969 of 2010 relating to the M/s Aryan Coal case,
the Hon'ble Supreme Court was pleased to make the following
order dated 30.07.2010.
“Until further orders, operation of the impugned order
shall remain stayed. However, it is made clear that the
supply system, as prevalent today, on payment of cross
subsidy charges, will continue, till further orders."
In CA Nos. 5683-5685 of 2010, the Hon'ble Supreme Court
was pleased to make the following orders dated 02-08-2010.
"Until further orders, operation of the impugned order
shall remain stayed.”
(d) As the Commission was incorrectly construing Hon'ble
Supreme Court’s order dated 02.08.2010 (while passing the
order dated 15.12.2011 in Petition No. 42 of 2011) ignoring
the Hon'ble Supreme Court’s interim order dated 30.07.2010
(e) It is submitted that when the Hon'ble Supreme Court is seized
of an application for clarifying and / or modifying its order
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dated 02.08.2010, propriety and deference to the highest
Court requires that the further orders of the Hon'ble Supreme
Court be no pre-empted by exercises of interpretation of the
said order by or before the Commission.
(f) It is also submitted that the appeal pending before the Hon'ble
Supreme Court relates to 2006-07 and has no bearing
whatsoever on the present case which relates to 2009-10 and
for which there are specific statutory Regulations.
(g) The order dated 27.11.2008 of this Commission in P. No. 15 of
2008 (M) was with respect to 2006-07 during the period that
there was no Regulation on the matter. It cannot have any
application after the 2005 Regulation came into effect for
2007-08 upto 2010-11 and/or after the 2011 Regulations
came into force for 2011-12 onwards. The said order of this
Commission cannot be considered to have any over-riding
effect on the statutory Regulations issued by the Commission.
Consequently, the orders passed by the Hon'ble Supreme
Court in the appeal arising out of the aforesaid order dated
27.11.2008 are restricted to 2006-07 and cannot have any
bearing for 2007-08 and thereafter.
(h) It is submitted that the cross subsidy surcharges is payable by
the Petitioner for 2009-10 as per Clause 6(b)(ii) of The
Chhattisgarh State Electricity Regulatory Commission
(Connectivity & Intra-State Open Access) Regulations, 2005 as
amended by the First Amendment Regulations of 2007, which
is applicable for 2007-08 and 2010-11 and which provides as
follows:-
"(ii) Cross subsidy surcharge shall also be payable by
such consumer who receive supply of electricity from a
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person other than the distribution licensee in whose area
of supply is located, irrespective of whether he avails
such supply through transmission / distribution network
of the Board / licensee or not."
It may be pertinent to point out that clause 33(6)(b)(ii)
of The Chhattisgarh State Electricity Regulatory Commission
(Connectivity & Intra-State Open Access) Regulations, 2011,
which is applicable from 2011-2012 onwards also similarly
provides for payment of cross subsidy surcharges as follows:-
"(ii) Cross subsidy surcharge shall also be payable by such
consumer who receive supply of electricity from a person
other than the distribution licensee in whose area of supply is
located, irrespective of whether it avails such supply through
transmission / distribution network of the licensee or not."
In the said 2011 Regulations, Clause 33(6)(b)(v)
provides as follows in respect of generation from renewable
sources of energy.
(v) For consumers procuring power through renewable
energy based power generating plant, the cross subsidy
surcharge shall be 50% of the cross subsidy surcharge
determined for that year.
Illustration: Suppose the cross subsidy surcharge
worked out for 2011-12 is 75 paise per kWh and the
cross subsidy surcharge worked out for 2012-13 is 70
paise per kWh. For consumers procuring power through
renewable energy based power generating stations, the
cross subsidy surcharge shall be 38 paise per unit and
35 paise per unit for the year 2011-12 and 2012-13
respectively.
Thus, there was no provision for concessional cross subsidy
surcharge in the 2005 Regulations applicable for 2009-10.
Even in the 2011 Regulations, there is no provision
whatsoever for any concessional rate of cross subsidy
surcharge in respect of co-generation plants as provided for in
the case of renewable energy sources.
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The provisions of the Regulations are binding and,
consequently, the Petitioner is liable for payment of cross
subsidy surcharge as it is not a captive user and the
Respondent is bound to levy and collect the same.
(i) The respondent is not at all liable to refund the amount of Rs.
11,62,582/- towards POC as claimed by the petitioner or
otherwise, and the respondent is also not liable to refund the
amount of Rs.6,10,318/- paid by the petitioner.
(j) The respondent ought not to have adjusted or deducted any
parallel operation charges as the petitioner has availed parallel
operation facility and operated its load and generating plant in
parallel with the grid and the petitioner is liable to pay the
same.
In fact, the supplementary bill and the demand is required to
be revised by levying the cross subsidy surcharge at the full
rate as per the applicable 2005 Regulation and without
adjusting the parallel operation charges paid / payable by the
petitioner; and the respondent is not only entitled, but is also
duty bound, to do so and recover the same.
(k) With the above submissions, the respondent has prayed that
the Commission may be pleased to dismiss the petition with
costs and allow the respondent to issue revised supplementary
bill for the full amount of cross subsidy surcharge payable for
2009-10 at the full rate as per the Regulations in force for the
relevant period without adjustment of any parallel operation
charges paid / payable for the said period and to recover the
same.
Analysis and decision
6. In the earlier orders it has been deliberated in detail about the
treatment of electricity consumed by power generated from
captive generating plant/generating company. As per the Rule
3(1) and 3(2) of Rules, 2005 that in case the consumption of
electricity of a end user with respect to aggregate electricity
generated on an annual basis of a power plant is less than fifty
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one percent, the power plant has to be "treated as a generating
company" and the electricity consumed by such end user has to
be treated as a "supply" of electricity by "a generating company."
Petitioner has argued in length about cross –subsidy surcharge. The
company is of the view that since transmission and/or distribution
lines of licensee is not used and no open access has been sought for
its industrial power requirement it is not liable to pay any cross-
subsidy surcharge. The power which a captive user consumes power
from its captive generating plant only, qualifies as captive
consumption. A captive user can consume power as a retail
consumer or open access consumer if its power requirement is not
met from its captive generating plant. To qualify as captive
generating plant and captive user, the requirements as prescribed in
Rule 3 of the Electricity Rules ,2005 has to be fulfilled. As per
Section 42 of the Act,2003, only captive users are exempted from
paying cross-subsidy surcharge. Section 42 of the Act is reproduced
below:
"42. .(1) It shall be the duty of a distribution licensee to develop and maintain an
efficient, co-ordinated and economical distribution system in his area of supply
and to supply electricity in accordance with the provisions contained in this Act.
(2) The State Commission shall introduce open access in such phases and
subject to such conditions, (including the cross subsidies, and other operational
constraints) as may be specified within one year of the appointed date by it and
in specifying the extent of open access in successive phases and in determining
the charges for wheeling, it shall have due regard to all relevant factors including
such cross subsidies, and other operational constraints:
Provided that such open access may be allowed before the cross subsidies are
eliminated on payment of a surcharge in addition to the charges for wheeling as
may be determined by the State Commission :
Provided further that such surcharge shall be utilised to meet the requirements
of current level of cross subsidy within the area of supply of the distribution
licensee:
Provided also that such surcharge and cross subsidies shall be progressively
reduced and eliminated in the manner as may be specified by the State
Commission:
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Provided also that such surcharge shall not be leviable in case open
access is provided to a person who has established a captive
generating plant for carrying the electricity to the destination of his
own use."
7. Regarding issue of cross-subsidy surcharge when entity who is
supplying electricity to itself without using open access or
transmission and/or distribution lines of licensees, it may be
fruitful to mention few judgments passed by Hon'ble Tribunal. In
Appeal no 119 of 2009, Hon'ble Tribunal held as under:
"i) The Aryan Plant Company being a generator which is found to be not
qualified as a captive generating plant can transfer power generated by it for
its own use to its own coal washeries through its own dedicated line without
license or open access
ii) The Aryan Plant Company transferring power to its own coal washeries
through its own dedicated transmission line can not be treated as ‘supply’ as
envisaged under Section 2 (70) of the Electricity Act. Therefore, the Aryan
Plant Company is not bound either to avail open access or to obtain a license
under the Act.
iii) Under the Act and the Regulations framed under the said Act a consumer is
entitled to receive the supply of electricity from the source other than the
licensee thereby making a proviso to compensate the licensee therefore,
show that there are provisions for the payment of cross subsidy surcharge
and by that process, it safeguards the interest of the distribution licensee in
whose area the consumer is located."
8. In appeal no 32,33 and 118 of 2009 (Salasar case), Hon'ble
Tribunal has ordered as under:
"7. The first issue relates to the failure of imposition of penalty in the
proceedings under section 142 of the Electricity Act. According to the Learned
Counsel for the Appellant, the State Commission having initiated proceedings
under section 142 of the Act and having found that there is a violation, ought to
have imposed some punishment on the respondents and as such the impugned
order is illegal. This contention, in our view, is misconceived. It is the judicial
discretion of the State Commission to decide whether to impose any
punishment or not as it considers appropriate as against the utilities even when
there is any violation. In other words, it is up to the State Commission to decide
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whether at all to impose any punishment even when it finds that there is some
violation. If the State Commission considers that the punishment was required
in the facts and circumstances, it may impose punishment. It is not mandatory
on the part of the State Commission to impose some punishment where there is
some violation. A perusal of section 142 of the Act makes it very clear that is
only directory since the expression used in the said section is only “may” and
not ‘shall”. So, it is not compulsory on the part of the State Commission to
impose some punishment even assuming that there is some violation.
Therefore, it is not open to the distribution licensee, the Appellant to claim that
the State Commission ought to have imposed penalty on the respondent utility
as there is some violation. It should be made clear that every show cause
notice need not necessarily culminate in to the imposition of penalty merely
because there is some violation. As mentioned above, the imposition of penalty
under section 142 of the Act is purely directory and discretionary. To this effect,
we have already given a judgment in Appeals No. 119 and 125 of 2009, dated
09.02.2010. Therefore, the first contention would fail.
8. The second contention is that, having found that the Respondent plant
is not a captive power plant, the respondent cannot be allowed to supply
electricity on payment of cross subsidy surcharge especially when the cross
subsidy surcharge is applicable only when open access is availed of. This
contention also, in our view, does not hold good in view of the settled law as
laid down by this Tribunal in earlier judgment in the case of OCL India Limited
versus OERC as reported in 2009 ELR APTEL levy of cross subsidy surcharge is
permissible even when the dedicated lines are used without availing the open
access. The relevant portion of the observations made by this Tribunal in the
above referred case is as follows:
“18. It is settled law that the underlying philosophy behind levy of surcharge is
that the consumer must compensate for the loss of cross subsidy to the
distribution licensee. It cannot be disputed that the surcharge is not payable
even after availing the status of the open access customer. Mere submitting the
application for availing the power is not enough to put the entire responsibility
on the distribution licensee.”
9. On the above principle, there is nothing wrong on the part of the State
Commission to have held that the cross subsidy surcharge is payable to the
distribution licensee even when the lines of the distribution licensee have not
been used.
10. It is not correct on the part of the Learned Counsel appearing for the
Appellant to contend that cross subsidy surcharge would be applicable only
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when the open access is availed of. Section 42(2) of the Act deals with the two
issues:
(i) Open Access and (ii) Cross subsidy surcharge. In so far as open access is
concerned, section 42(2) is not restricted to open access on the lines of the
distribution licensee. In other words, section 42(2) which deals with cross
subsidy cannot be read to mean to involve itself with the open access.
11. The cross subsidy surcharge, which is referred to in the proviso to sub
section (2) of section 42 of the Act, is a compensatory charge. It does not
depend upon use of distribution licensee’s lines. It is a charge to pay any
compensation to the distribution licensee irrespective of the fact whether its line
is used or not, in view of the fact that, but for the open access the consumer
would have taken the quantum of power from the distribution licensee and in
the result the consumer would have paid tariff applicable for such supply which
would include an element of cross subsidy surcharge on certain other
categories of consumers. On this principle, it has to be held that cross subsidy
surcharge is payable irrespective of whether the lines of the distribution
licensees are used or not.
12. As a matter of fact, the State Commission has directed the respondents
to pay the cross subsidy surcharge to the Appellant being distribution licensee
which would be in the interest of the consumers. To this effect, this Tribunal
has given a judgment in Appeal No. 119 of 2009, Chhattisgarh State
Distribution Company Limited versus Aryan Coal Benefication dated 09.02.10.
Therefore, the second contention also would fail."
9. It may also be apposite to mention the judgment of Hon'ble
Supreme Court in civil appeal no 5479 of 2013 M/s Sesa Sterlite
Ltd Vs Orrisa Electricity Regulatory Comm. & Ors-
"(2) Open Access and CSS
22. Open access implies freedom to procure power from any source. Open access
in transmission means freedom to the licensees to procure power from any
source. The expression “open access” has been defined in the Act to mean “the
non-discriminatory provision for the use of transmission lines or distribution
system or associated facilities with such lines or system by any licensee or
consumer or a person engaged in generation in accordance with the regulations
specified by the Appropriate Commission”. The Act mandates that it shall be duty
of the transmission utility/licensee to provide non-discriminatory open access to
its transmission system to every licensee and generating company. Open access
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in transmission thus enables the licensees (distribution licensees and traders) and
generating companies the right to use the transmission systems without any
discrimination. This would facilitate sale of electricity directly to the distribution
companies. This would generate competition amongst the sellers and help
reduce, gradually, the cost of generation/procurement.
23. While open access in transmission implies freedom to the licensee to procure
power from any source of his choice, open access in distribution with which we
are concerned here, means freedom to the consumer to get supply from any
source of his choice. The provision of open access to consumers, ensures right of
the consumer to get supply from a person other than the distribution licensee of
his area of supply by using the distribution system of such distribution licensee.
Unlike in transmission, open access in distribution has not been allowed from the
outset primarily because of considerations of cross-subsidies. The law provides
that open access in distribution would be allowed by the State Commissions in
phases. For this purpose, the State Commissions are required to specify the
phases andconditions of introduction of open access.
24. However open access can be allowed on payment of a surcharge, to be
determined by the State Commission, to take care of the requirements of current
level of crosssubsidy and the fixed cost arising out of the licensee’s obligation to
supply. Consequent to the enactment of the Electricity (Amendment) Act, 2003, it
has been mandated that the State Commission shall within five years necessarily
allow open access to consumers having demand exceeding one megawatt.
(3) CSS: Its Rationale
25. The issue of open access surcharge is very crucial and implementation of the
provision of open access depends on judicious determination of surcharge by the
State Commissions. There are two aspects to the concept of surcharge – one, the
cross-subsidy surcharge i.e. the surcharge meant to take care of the
requirements of current levels of cross-subsidy, and the other, the additional
surcharge to meet the fixed cost of the distribution licensee arising out of his
obligation to supply. The presumption, normally is that generally the bulk
consumers would avail of open access, who also pay at relatively higher rates. As
such, their exit would necessarily have adverse effect on the finances of the
existing licensee, primarily on two counts –one, on its ability to cross-subsidise
the vulnerable sections of society and the other, in terms of recovery of the fixed
cost such licensee might have incurred as part of his obligation to supply
electricity to that consumer on demand (stranded costs). The mechanism of
surcharge is meant to compensate the licensee for both these aspects.
Page 18 of 30
26. Through this provision of open access, the law thus balances the right of the
consumers to procure power from a source of his choice and the legitimate
claims/interests of the existing licensees. Apart from ensuring freedom to the
consumers, the provision of open access is expected to encourage competition
amongst the suppliers and also to put pressure on the existing utilities to improve
their performance in terms of quality and price of supply so as to ensure that the
consumers do not go out of their fold to get supply from some other source.
27. With this open access policy, the consumer is given a choice to take electricity
from any Distribution Licensee. However, at the same time the Act makes
provision of surcharge for taking care of current level of cross subsidy. Thus, the
State Electricity Regulatory Commissions are authorized to frame open access in
distribution in phases with surcharge for:
(a) Current level of cross subsidy to be gradually phased out along with cross
subsidies; and
(b) obligation to supply.
"28. Therefore, in the aforesaid circumstances though CSS(cross-subsidy
surcharge) is payable by the Consumer to the Distribution Licensee of the area in
question when it decides not to take supply from that company but to avail it
from another distribution licensee. In nutshell, CSS is a compensation to the
distribution licensee irrespective of the fact whether its line is used or
not, in view of the fact that, but for the open access the consumer
would pay tariff applicable for supply which would include an element
of cross subsidy surcharge on certain other categories of consumers.
What is important is that a consumer situated in an area is bound to contribute to
subsidizing a low and consumer if he falls in the category of subsidizing
consumer. Once a cross subsidy surcharge is fixed for an area it is liable to be
paid and such payment will be used for meeting the current levels of cross
subsidy within the area. A fortiorari, even a licensee which purchases electricity
for its own consumption either through a “dedicated transmission line” or through
“open access”would be liable to pay Cross Subsidy Surcharge under the Act.
Thus, Cross Subsidy Surcharge, broadly speaking, is the charge payable by a
consumer who opt to avail power supply through open access from someone
other than such Distribution licensee in whose area it is situated. Such surcharge
is meant to compensate such Distribution licensee from the loss of cross subsidy
that such Distribution licensee would suffer by reason of the consumer taking
supply from someone other than such Distribution licensee."
Page 19 of 30
In the above mentioned case before Hon'ble Supreme Court, one of
the issue was whether end user of electricity was "consumer" or
"distribution licensee". It was found by Hon'ble Apex court that end
user was consumer as no distribution of electricity was being done.
Having established that the end user was consumer, the other issue
was whether such consumer is liable to pay cross-subsidy surcharge
as the transmission and/or distribution lines was not used for
consumption of electricity by the end user from its power plant. On
this issue Hon'ble Supreme Court ordered that cross-subsidy
surcharge is payable irrespective of the fact that whether lines of
licensee is being used or not.
10. In the instant case the power plant of petitioner is generating
company and not a captive generating plant for the year 2007-
08. The end user of power plant of petitioner for this year is not a
captive user but it has to be treated as consumer for that
particular year. According to Section 42 of the Act only captive
users are exempted from payment of cross subsidy surcharge.
Hon'ble Apex Court has upheld that cross-subsidy surcharge is
compensation to the distribution licensee irrespective of the fact
whether its line is used or not. As per the provisions of the Act,
cross-subsidy surcharge is not levied on supply by a power plant
to licensee and for power consumed outside the State. It is clear
that in this instant case power plant of petitioner had supplied
electricity to its industrial load. In view of judgement of Hon'ble
Supreme Court and Hon'ble Tribunal, petitioner has to pay cross
subsidy surcharge to CSPDCL for industrial consumption within its
premises irrespective of the fact that it has not used the lines of
licensee for the years 2007-08.
11. The Commission in its order dated 27.11.2008 in P No 15 of 2008,
has held that cross subsidy surcharge will be half of the normal rate for
the energy consumed from the co-generation plant.
Hon’ble ATE has also passed order in respect of co-generation in
Appeal No.57 of 2009, 54 of 2012, 59 of 2012 and review order in
Page 20 of 30
appeal no IA 262 of 2012 in RP (DFR) No.1311 of 2012 in APPEAL NO.
57 of 2009. Judgements of the Hon’ble ATE in these orders are
reproduced below;
Order dated 26/04/2010 in appeal no 57 of 2009,
“45. Summary of our conclusions is given below:-
(I) The plain reading of Section 86(1)(e) does not show that the
expression ‘co-generation’ means cogeneration from renewable sources
alone. The meaning of the term ‘co- generation’ has to be understood
as defined in definition Section 2 (12) of the Act.
(II) As per Section 86(1)(e), there are two categories of `generators
namely (1) co-generators (2) Generators of electricity through
renewable sources of energy. It is clear from this Section that both
these categories must be promoted by the State Commission by
directing the distribution licensees to purchase electricity from both of
these categories.
(III) The fastening of the obligation on the co-generator to procure
electricity from renewable energy procures would defeat the object of
Section 86 (1)(e).
(IV) The clear meaning of the words contained in Section 86(1)(e) is
that both are different and both are required to be promoted and as
such the fastening of liability on one in preference to the other is totally
contrary to the legislative interest.
(V) Under the scheme of the Act, both renewable source of energy and
cogeneration power plant, are equally entitled to be promoted by State
Commission through the suitable methods and suitable directions, in
view of the fact that cogeneration plants, who provide many number of
benefits to environment as well as to the public at large, are to be
entitled to be treated at par with the other renewable energy sources.
(VI) The intention of the legislature is to clearly promote cogeneration
in this industry generally irrespective of the nature of the fuel used for
Page 21 of 30
such cogeneration and not cogeneration or generation from renewable
energy sources alone.”
Order dated 30/01/2013 in appeal no 54 of 2012,
“40. Summary of our findings:
i) This Tribunal in its judgment in Appeal No.57 of 2009 has specifically
observed that the intention of the legislature is to clearly promote the
co-generation also irrespective of the nature of the fuel used and
fastening of the obligation on the co-generator would defeat the object
of Section 86(1)(e). The Tribunal also mentioned in the above
judgment that the conclusion in Appeal No.57 of 2009 of being generic
in nature, would apply to all the co-generation based captive
consumers who may be using any fuel. Therefore, reasoning given by
the State Commission for distinguishing the judgment of this Tribunal,
which is binding on the State Commission, is wrong.
ii) The definition of the obligated entity would not cover a case where a
person is consuming power from co-generation plant.
iii) The State Commission by the impugned order, in order to remove
difficulties faced by the obligated entities, has clarified that the
obligation in respect of co-generation can be met from solar and non-
solar sources but the solar and non-solar purchase obligation has to be
met mandatorily by the obligated entities and consuming electricity
only from the co-generation sources shall not relieve any obligated
entity. When such relaxation has been made, the same relaxation must
have been allowed in respect of consumers meeting electricity
consumption from captive Co-generation Plant in excess of the total
RCPO Obligations. Failure to do so would amount to violation of Section
86(1)(e) of the electricity Act, which provides that both co-generation
as well as generation of electricity from renewable source of energy
must be encouraged as per the finding of this Tribunal in Appeal No.57
of 2009. Unfortunately the State Commission has failed to follow the
judgment given by this Tribunal in Century Rayon case.”
Also in line with the order of Hon’ble ATE, the Commission has
issued order dated 21/05/2013 in P no 28 of 2012 and 7 of 2013
and in the matter of in the matter of - RPO compliance for
obligated entities consuming power from co-generation power
Page 22 of 30
plant filed by Chhattisgarh Sponge Iron Manufacturers Association
and Bhilai Steel Plant. The judgement of the Commission in this
order is reproduced below;
“31. In view of orders passed by Hon'ble Tribunal in Appeal No.57 of
2009, 54 of 2012, 59 of 2012 and review order in appeal no IA 262 of
2012 in RP (DFR) No.1311 of 2012 in APPEAL NO.57 of 2009, it is
decided that captive users/consumers consuming power to the extent
of RPO specified under Regulation, 2011, from fossil fuel based co-
generation plants shall be exempted from RPO for the year 2012-13.
As per Hon'ble Tribunal Judgment, definition of the obligated entity
would not cover a case where a person is consuming power from co
generation plant. XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX”
From the above it is clear that the Commission has been
promoting consumption from co-generation power. Accordingly
cross subsidy surcharge will be 50% of the normal rate.
12. Petitioner in its petition has also pleaded that no adjustment or
deduction has been granted for the POC paid by the petitioner to
the respondent for this period.
I. It may be pertinent to high light regulatory back ground
facts pertaining to parallel operation charges. On
15.06.2005, the Commission fixed parallel operation charge
for availing grid support by CGP's in the tariff order for year
2005-06 as was hitherto before fixed by the Madhya
Pradesh Electricity Regulatory Commission in its earlier tariff
orders. It is pertinent to note that MPERC was the Regulator
before bifurcation of the State of M.P and the POC was fixed
as Rs.16/- per KVA per month on the installed capacity of
the CGP. Thereafter a petition No. 17/2005 was filed on
behalf of the members who owned captive generating
plants, seeking orders of the Commission on purchase of
power by the licensee from CGPs and other matters, mostly
relating to tariff. On 06.02.2006, an order was passed in
this petition. Upon pleading by the petitioners in this
Page 23 of 30
petition, the Commission reviewed the rate of parallel
operation charges fixed by the Commission in its tariff order
dated 15.06.2005. By order dated 06.02.2006, passed in
petition No. 17/2005, the Commission reviewed the parallel
operation charges and refixed the same at Rs. 10/- per KVA
per month as against Rs. 16/- per KVA per month.
II. Again on 04.04.2006, a representative of CGP owner moved
a review application before the Commission seeking for
review of its earlier order dated 06.02.2006 and prayed for
total withdrawal of parallel operation charges. By order
dated 4th May, 2006 the Commission rejected the review
petition at the admission stage itself, while pointing out
formidable fallacies in adding new reliefs.
III. Aggrieved by the order of the Commission, the some parties
preferred appeal before Hon'ble Tribunal. The appeal was
dismissed and the Hon'ble Tribunal declined to interfere with
the order of the Commission fixing parallel operation
charges at Rs. 10/- per KVA per month. However, the
Hon'ble Tribunal remanded the matter to the Commission
with direction that the parallel operation charges may be
fixed on the basis of the data, materials and scientific inputs
relating to parallel operations already placed by the parties
or that may be placed by the parties before the conclusion
of hearing and such exercise shall be carried out
independently and without in any manner being influenced
by this judgment.
IV. In view of the observations of the Hon’ble Tribunal, the
Commission took up the task of determination of parallel
operation charges and registered a suo-motu petition No.
39/2006(M). The Commission decided to seek the assistance
of a technical consultant to study the impact caused due to
CGP's which are operating in parallel with the State grid.
The Commission called for enquiries and assigned the task
Page 24 of 30
to M/s Electrical Research & Development Association
(ERDA), Vadodara, an eminent research and testing
organization in the field of power accredited by the
Government of India. The consultant was assigned the task
to collect various system data and parameters of some
representative CGPs in the State, and suggest the rate of
parallel operation charges.
V. After carrying out the study, the consultant submitted a
report to the Commission, and prepared a discussion paper
giving details of the methodology of study, observations
made and proposed three alternative methods for
calculation of parallel operation charges. This discussion
paper was circulated by the Commission in the public
domain and copies were sent to all stakeholders for
obtaining their comments, if any, on the outcome of study
and methods proposed for calculation of parallel operation
charges. After hearing all the parties, the Commission
passed order in suo-motu petition No. 39/2006(M) on
31.12.2008. The Commission decided to fix the parallel
operation charge derived on the basis of Base MVA Support
method. The charges were fixed at Rs 21 per KVA. In this
order, it was held that instead of levying parallel operation
charges on the installed capacity of CGP, the demand
towards auxiliary load of CGP (which shall not be more than
10% of the capacity of the plant), contract demand of the
CGP contracted with the utility, the power supplied by the
CGP to CSEB or sold inside/outside the State through open
access, should be excluded from the installed capacity for
the purpose of calculation of POC.
VI. Thereafter, the distribution licensee, CSPDCL filed a review
petition No.20 of 2009 (M) and explained practical
difficulties in implementation of the impugned order passed
in petition No. 39 of 2006(M). CSPDCL pointed out certain
Page 25 of 30
discrepancies in formula specified in order dated
31.12.2008. Due to deduction of contract demand (for
availing retail supply with licensee) in computation of POC,
in certain cases where installed capacity of power plant was
less than contract demand and entire power generated from
power plant of CGP was consumed by own industrial load,
the POC bills resulted in negative. The Commission reviewed
the formula and passed an order in this review petition on
13.10.2009. It was held that POC shall be calculated at the
rate of Rs.21/- per KVA per month (the rate as decided by
the ERDA) on the captive and non-captive load of CGP which
may either be co-located, fed through the grid or through
dedicated lines of CGP. It was further held that the billing of
parallel operation charges as decided above shall remain
effective from 1st January 2009, till it is revised by the
Commission.
VII. Subsequently, the CSPDCL held consultations with CGPs for
reaching at methodology for computation of captive load.
CSPDCL vide letter dated 29.12.2009, requested the
Commission to approve installation of meters at premises of
plant owners to compute captive and non captive load of
CGPs. The Commission vide letter dated 05.01.2010
rejected the request of CSPDCL and directed to discuss the
issue with concerned officer of the Commission. A meeting
was also held between representatives of CGPs and CSPDCL
and it was decided to evolve a tabulated formula for
computation of captive and non-captive load.
VIII. CSPDCL had submitted a format to the Commission for
calculation of captive and non-captive load of CGPs. The
format submitted by CSPDCL was as follows:
Page 26 of 30
Particulars to be submitted by captive generating company for computation of parallel operation
charges as per Commission's Order dated 13.10.2009
Installed Capacity of
power plant in KVA
Auxiliary power
demand of the power plant in KVA
PPA with CSPDCL for
the quantum of power in KVA
Inter-State open
access sought for the quantum of
power in KVA
Captive/Non-captive
load of CPP in KVA
A B C D E = A - (B+ C + D)
IX. It may be worthy to mention report of ERDA on parallel
operation charges as highlighted in suo-motu petion no 39
of 2006(M):
"10. ADVANTAGES AND DISADVANTAGES OF PARALLEL OPERATION:
In its report ERDA has enumerated following advantages and
disadvantages to the CPP as well as utility:
10.1 Advantages to CPPs:
(1) The fluctuations in the load is absorbed by the utility grid in the
parallel operation mode. This will reduce the stresses on the captive
generator and equipments. The bulk consumer can operate his
generating units at constant power generation mode irrespective of his
load cycle.
(2) Fluctuating loads of the industries connected in parallel with the
grid inject harmonics into the grid. The current harmonics absorbed by
the utility grid is much more than that by CPP generator. These
harmonics flowing in the grid system are harmful to the equipments
and are also responsible for polluting the power quality of the system.
(3) Negative phase sequence current is generated by unbalance
loads. The magnitude of negative phase sequence current is much
higher at the point of common coupling than at generator output
terminal. This unbalance current normally creates problem of
overheating of the generators and other equipments of CPP, if not
running in parallel with grid. When they are connected to the grid, the
negative phase sequence current flows into the grid and reduces stress
on the captive generator.
(4) Captive power plants have higher fault level support when they
are running in parallel with the grid supply. Because of the higher fault
level, the voltage drop at load terminal is less when connected with the
grid.
Page 27 of 30
(5) On account of increase in plant load factor of captive generator,
additional revenues can be generated by the CPPs by sale of surplus
power to the
utility.
(6) In addition to the above, CPPs enjoy the following advantages
also:
(i) In case of fault in a CPP generating unit or other equipment,
bulk consumers can draw the required power from the grid and
can save their production loss.
(ii) The grid provides stability to the plant to start heavy loads like
HT motors.
(iii) The variation in the voltage and frequency at the time of starting
large motors and heavy loads, is minimized in the industry, as
the grid supply acts as an infinite bus. The active and reactive
power demand due to sudden and fluctuating load is not
recorded in the meter.
(iv) The impact created by sudden load throw off and consequent
tripping of CPP generator on over speeding is avoided with the
grid taking care of the impact
(v) The transient surges reduce the life of equipment of the CPP. In
some cases, the equipment fails if transient is beyond a limit. If
the system is connected to the grid, it absorbs the transient
load. Hence, grid enhances the life of CPP equipments.
In short, the gains to the CPPs is quite substantial in case there is grid
support.
10.2 Disadvantage of Parallel Operation to CPPs:
(1) The CPP-holder is required to pay for minimum contract demand
even if connection is floating to take care of emergency.
(2) The CPP-holder is required to install higher rating switchgear
depending on grid fault level."
X. On perusal of above findings of ERDA, in the mentioned
case, it appears that it is mainly the industrial load which
derives benefits by operating its co-located power plant in
parallel to the grid. It can be said that an industrial unit
which has installed power plant in its same premises draws
Page 28 of 30
certain grid support while paralleling its power plant with the
grid. So parallel operation charge is technical grid support
charge levied to industries which have own power plant
located in same premises. ERDA has not studied the case
where a captive generating plant uses the grid for carrying
its total electricity generated for its captive
use(consumption). But ,the study was oriented on such
industrial units where power plant was co-located(power
plant installed in same premises where there is industrial
load).The study revealed that the industrial load of such co-
located power plant draws benefits from grid when it
operates its power plant in parallel(synchronization) with the
grid. In suo-motu petition no 10 of 2008(M) and petition no
11 of 2008(M), in case of Aryan Coal Benefication Ltd the
issue related to billing of parallel operation operation
charges when power plant does not qualifies as captive
generating plant was not deliberated in detail. This order
was passed on 23.01.2009. Hon'ble Tribunal had also upheld
the order of the Commission. But this aspect whether
parallel operation charges and cross subsidy surcharge are
identical and levied for same purpose was not examined by
this Commission while dealing the Aryan case. However
after passing of this order, as mentioned in regulatory back
ground facts above, after consultation with all stake holders
in order dated 13.10.2009 passed in petition no 20 of
2009(M) it was held as under:
"It will be appropriate to specifically identify the parameter responsible for
causing shock, pollution and disturbance in the grid as parameter for
calculation of POC. The power generated by CPP can be utilized for auxiliary
consumption captive load, non-captive load, supply to utility and for inter
state sale. In case of elimination of supply for auxiliary consumption, supply
to utility and power for inter state sale as per provision in our order dt.
31.12.2008 the balance remains power supply to captive and non-captive
loads of CPP, and this can be specifically identified as an element for
payment of POC. The essence of technical study conducted and
report submitted by the ERDA is that the load connected to grid is
Page 29 of 30
responsible for creation of shocks, disturbance and pollution in the
grid. Though the grid absorbs the pollution of the loads of the
consumers who has agreement with the utility and utility charges
to consumers as per the retail tariff fixed by the Commission, but
the grid also used to absorb the pollution of the captive and non-
captive loads of the CPP connected with the grid which is not the
consumer of utility and therefore, captive and non-captive load of
CPP can be parameter for payment of POC. Such captive and non-
captive load of CPP can either be co-located, supplied through the
grid or may be supplied through dedicated system. We have thus
come to the conclusion that the POC shall be calculated at the rate
of Rs.21/- per KVA per month (the rate as decided by the ERDA)
on the captive and non-captive load of CPP which may either be
co-located, fed through the grid or through dedicated lines of
CPP".
XI. In the above order dated 13.10.2009, it was ordered that
parallel operation charges have to be levied on captive and
non-captive load of CPP. So, it can be inferred that cross-
subsidy surcharge and parallel operation charges are paid to
licensee for different purposes. As per Hon'ble Supreme
Court also cross subsidy surcharge is a compensatory
charge paid to distribution licensee as a consumer goes out
of manifold of distribution licensee. Whereas, parallel
operation charges has to be levied to industries which have
co-located power plants for providing grid support by the
licensee. The industrial load of petitioner has taken grid
support and so it is liable to pay parallel operation charges.
Parallel operation charges is fixed in Rs/KVA/month.
Whereas cross subsidy surcharge is fixed in terms of
Rs/kWh. Both the charges have different purposes.
Accordingly, it is liable to pay parallel operation charges as
the industrial load of its power plant derives certain benefits
from grid. Parallel operation charges collected by CSPDCL
from petitioner for financial year 2007-08 should not be
adjusted with the cross-subsidy surcharge billed.
Page 30 of 30
Conclusion
1. Petitioner is liable to pay cross –subsidy surcharge for the
electricity consumed (own industrial consumption) from its
own power plant, irrespective of the fact that it has not used
the lines of licensee for the year 2009-10. Respondent is
directed to review the bill dated 23.08.2011 for recovery of
cross subsidy surcharge issued in line with judgment in this
order.
2. Cross subsidy surcharge will be half of the normal rate for the
energy consumed from the co-generation power plant for the
year 2009-10. This facility provided on consumption from co-
generation plant will, however, not be available in case of
consumption from power generated using the other boilers.
3. Parallel operation charges collected by CSPDCL from petitioner
for that year 2009-10 should not be adjusted with the cross-
subsidy surcharge to be billed.
We order accordingly.
Sd/-
(Vinod Shrivastava)
MEMBER
Sd/-
(Narayan Singh)
CHAIRMAN