correction required copy of appeal

126
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A.No. of 2012 APPEAL No. OF 2012 Between TAMILNADU SPINNING MILLS ASSOCIATION #2, Karur Road, Near Beschi College, Modern Nagar, Dindigul – 624 001 Tamilnadu, Represented by Dr.K.Venkatachalam Chief Advisor, APPELLANT Versus 1.TAMIL NADU ELECTRICITY REGULATORY COMMISSION, 19-A, Rukumini Lakshmipathy Salai, Egmore, Chennai – 600 008. 2. TAMILNADU GENERATION AND DISTRIBUTION CORPORATION LTD 144, Anna Salai, Chennai – 600 002. represented by its Chairman and Managing Director, 3.TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI – 600 002. represented by its Chairman and Managing Director, RESPONDENTS PAPER BOOK ADVOCATE FOR THE APPELLANT: Mr.R.S.PANDIYARAJ

Upload: sreerangan-ramachandran

Post on 18-Apr-2015

11 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Correction Required Copy of Appeal

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A.No. of 2012

APPEAL No. OF 2012

Between

TAMILNADU SPINNING MILLS ASSOCIATION

#2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001

Tamilnadu,

Represented by Dr.K.Venkatachalam

Chief Advisor, …APPELLANT

Versus

1.TAMIL NADU ELECTRICITY REGULATORY

COMMISSION,

19-A, Rukumini Lakshmipathy Salai,

Egmore, Chennai – 600 008.

2. TAMILNADU GENERATION AND DISTRIBUTION

CORPORATION LTD

144, Anna Salai,

Chennai – 600 002.

represented by its Chairman and Managing Director,

3.TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…RESPONDENTS

PAPER BOOK

ADVOCATE FOR THE APPELLANT: Mr.R.S.PANDIYARAJ

Page 2: Correction Required Copy of Appeal

INDEX

Sl.No. Date Particulars Page

I Synopsis and List of Dates and

Events

II Appeal with Affidavit

III Application for Interim Stay with

Affidavit

IV List of Enclosures

1. 08.02.2008 TNERC-Power procurement from

New and Renewable Sources of

Energy Regulations, 2008

2. 08.04.2011 Tariff Order No.1 of 2011 of 1st

Respondent

3. 08.09.2011 Public Notice of 1st Respondent

4. 29.09.2011 Comments filed by the Appellant in

pursuance of the Public Notice

5. 15.12.2011 Tariff Order No.4 of 2011 of 1st

Respondent

6. 24.05.2012 Notice fixing the Stakeholder’s

Hearing on 8th June 2012

7. 04.06.2012 Letter of the 1st Respondent

Commission sent to the Appellant

intimating no Consultative Paper

would be released

8. 08.06.2012 Written Submission filed during the

Stakeholder’s Hearing on

08.06.2012 by the Appellant

9. 30.06.2012 Order No.3 of 2012 of the 1st

Respondent

10. 31.07.2012 The Impugned Order of the 1st

Respondent Tamilnadu Regulatory

Commission in T.R.No.6 of 2012

11. . 08.2012 Working Instruction issued by the

2nd Respondent TANGEDCO

12. 30.08.2012 Memo of 2nd Respondent providing

instructions to withdraw deemed

demand concept

13. 24.09.2012 Model Demand raised by the SE of

2nd Respondent based on the

working instruction

V Vakalathnama

Page 3: Correction Required Copy of Appeal

OPENING SHEET

Appeal/

AF

R.No. of

2012

Date of

Filing/201

2

AppellantRespondent

s

Counsel of

Appellant

DD

Detail

s

Relief

sought

briefly &

accurately

for

permanent

record

purpose

with

provisions

of law

involved

13.09.2012

Tamilnadu

Spinning

Mills

Associatio

n

1)Tamilnadu

Electricity

Regulatory

Commission

and others

R.S.Pandiyar

aj

Page 4: Correction Required Copy of Appeal

SYNOPSIS

A. The Appellant is an Association of yarn spinning mills having member

strength of 501 spinning mills and all of them are HT electricity consumers in

the State of Tamil Nadu. The Appellant had earlier filed Petitions before

various fora on issues relating to the rights of its members in the Electricity

Sector including the Hon'ble Tribunal.

B. The First Respondent is the Tamil Nadu Electricity Regulatory Commission

(Commission) who has issued the impugned Order.

C. The Second Respondent is Tamilandu Generation and Distribution

Corporation Ltd. (TANGEDCO) who has issued subsequent working

instructions based on the impugned Order.

D. The 3rd Respondent is the Tamilnadu Transmission Corporation Ltd

(TANTRANSCO) who has strong interests in the appealed matters.

E. The First Respondent issued the impugned Comprehensive Tariff Order on

Wind Energy in TR No. 6 of 2012 on 31.07.2012 covering tariff and other

various matters relating to wind energy and it is to be enforced by the 2nd

Respondent as far as the members of the Petitioner’s Association, who are

having windmills and such other windmill owners in the State of Tamilnadu.

F. The tariff fixation exercise was initially handled by the Tamilnadu Electricity

Board (TNEB) for the wind energy generators in the State of Tamilnadu.

Thereafter coming in to force of Electricity Act 2003, as the powers to regulate

Tariff and other related issues for NCES based industries are vested with the

State Regulatory Commissions, the 1st Respondent has started these

exercises and accordingly, they were periodically being taken up by the

Respondent Commission. Accordingly, the first Order of the Commission was

passed on 15.05.2006 in Order No. 3 of 2006. Thereafter another Order was

passed in Order No. 1 of 2009 dated 20.03.2009 which has to expire on

31.03.2011 in the normal course. However, owing to reasons attributable to

the 1st Respondent Commission, the next Order was not passed when it was

due. Instead three extensions have been ordered by the Respondent

Commission extending the Order dated 20.03.2009 for three spells namely

from 01.04.2011 to 31.12.2011, from 01.01.2012 to 30.06.2012 and from

01.07.2012 to 31.07.2012. Finally the impugned Order was passed on

31.07.2012.

Page 5: Correction Required Copy of Appeal

G. After the receipt of the impugned Order dated 31.07.2012 from the

Respondent Commission, the 2nd Respondent started issuing the working

instructions as how the impugned order should be implemented in various

spheres.

H. The Respondent Commission has issued the impugned order on 31.07.2012,

under the powers vested under Section 61 of the Electricity Act 2003,

notifying various procedures to be followed in the case of wind energy

generators in the State both for selling to 2nd Respondent and for those

consuming their power for their own captive purposes.

I. As per the Impugned Order, from 01.08.2012 onwards, if any WEG (Wind

Energy Generator) is newly installing in the State of Tamilnadu and wants to

sell its power to the 2nd Respondent, it is eligible to claim a tariff of Rs.3.51

per unit under non REC Scheme. Inter-alia for those who are already in

agreement with the 2nd Respondent for making use of the wind energy for

their captive purposes drastic changes have been ordered in the impugned

Order dated 31.07.2012 without the authority of law. The Impugned Order has

taken out the privileges and promises so far made available to the captive

consumers of wind energy as per the orders dated 15.05.2006 and

20.03.2009 by which they are covered.

J. Therefore, the impugned Order dated 31.07.2012 passed by the 1st

Respondent in Order No. 6 of 2012 in so far as it is made applicable to even

the existing WEGs, needs to be set aside in total and to the extent submitted

below under the following grounds.

K. The said impugned Order dated 31.07.2012 is therefore, under challenge

before this Hon'ble Tribunal in the present Appeal.

LIST OF DATES AND EVENTS

S.No. Date Event

1. 01.01.1994

Policy announcement was made by the

Ministry of Non-Conventional Energy Sources,

Government of India on remunerative tariff for

non-conventional energy sources

2. 25.11.1994

Government of India issued guidelines for

fixation of Purchase Price for Power Produced

Page 6: Correction Required Copy of Appeal

from Non-Conventional Energy

3. 10.06.2003 Electricity Act 2003 is brought into force

4. 12.02.2005

National Electricity Policy was issued pursuant

to the provisions of the Electricity Act, 2003

which suggested providing promotional

measures for increasing capacities in non-

conventional sources based energy production

5. 15.05.2006

Tariff Order No. 3 of 2006 issued by the Tamil

Nadu Electricity Regulatory Commission for

Non-Conventional Energy Sources based

Generating Plants and Non-Conventional

Energy Sources based Co-generation Plants.

Pertinently, this order provided that it would

apply to all plants commissioned after

15.05.2006 and power purchase agreements

in existence prior to the date would continue to

remain in force.

6. 08.02.2008

Power Procurement from New and Renewable

Sources of Energy Regulation 2008 was

framed by TNERC

7.

19.09.2008 Common Order in MP Nos. 9, 14, 23 of 2008

by the TNERC waiving the application of Tariff

Order No. 3 of 2006 from 19.09.2008 onwards

8. 20.03.2009 The Commission has issued Comprehensive

Tariff Order on Wind Energy (Order No.1 of

2009) with an operative period of two years

from 20.03.2009 to 31.03.2011.

9. 08.04.2011 The Commission has issued an Order No.1 of

2011 dated 08.04.2011 extending the validity

of the Order dated 20.03.2009 for the period

from 01.04.2011 to 31.12.2011.

10. 08.09.2011 The Commission issued Public Notice inviting

the views of stakeholders on three main areas

11. 29.09.2011 In pursuance of the Public Notice dated

08.09.2011, the Appellant filed Written

Submission before the Commission

expressing the comments and suggestions

12. 15.12.2011 The Commission has issued an Order No.4 of

2011 dated 15.12.2011 extending the validity

of the Order dated 20.03.2009 for the further

Page 7: Correction Required Copy of Appeal

period from 01.01.2012 to 30.06.2012.

13. 24.05.2012 The Commission has informed the Appellant

and other Stakeholders to participate in the

Stakeholders’ Hearing on 08.06.2012 at

Chennai.

14. 04.06.2012 The 1st Respondent Commission sent a letter

to the Appellant intimating that no Consultative

Paper would be released

15. 08.06.2012 Public Hearing held at Chennai and the

Appellant filed Written Submission during the

hearing

16. 30.06.2012 The Commission has issued an Order No.3 of

2012 dated 30.06.2012 extending further the

validity of the Order dated 20.03.2009 for the

period from 01.07.2012 to 31.07.2012.

17. 31.07.2012 The Commission has issued the impugned

Order No.6 of 2012 dated 31.07.2012.

18. .08.2012 The 2nd Respondent TANGEDCO has issued

suitable working instruction for the

implementation of the Impugned Order.

19 30.08.2012 Memo of 2nd Respondent providing instructions

to withdraw deemed demand concept

20 24.09.2012 Demands raised by the SEs of 2nd Respondent

based on the working instruction

FORM I

Page 8: Correction Required Copy of Appeal

(See Rule 20)

Memorandum of Appeal

preferred under sub-section 1 and 2

of Section 111 of The Electricity Act, 2003

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

APPELLATE JURISDICTION

APPEAL No. _____ of 2012

BETWEEN

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001

Tamilnadu.represented by Dr.K.Venkatachalam

its Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND

DISTRIBUTION CORPORATION LTD,

represented by its Chairman and Managing Director,

144, Anna Salai,

CHENNAI – 600 002.

(3). TAMIL NADU TRANSMISSION

CORPORATION LTD

Represented by its Chairman and Managing Director,

144, Anna Salai,

CHENNAI – 600 002.

…Respondents

1. Details of Appeal

Page 9: Correction Required Copy of Appeal

Appeal under sub-section 1 and 2 of Section 111 of the Electricity Act,

2003 is hereby preferred against the impugned Order of the Tamil Nadu

Electricity Regulatory Commission (TNERC), Chennai – 600 008 dated

31.07.2012 passed under the provisions of the Electricity Act 2003.

2. The said order was communicated to the Appellant on 01.08.2012.

3. The address of the Appellant for service is as set out hereunder:

i) TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001

Tamilnadu.

represented by Dr.K.Venkatachalam its Chief Advisor,

Phone No. 0451- 6454666, 6454667, 6454668

Mobile No. 98421 33318

E-mail [email protected]

Fax No. 0451- 2433637

Address of Counsel:

MR. R.S. PANDIYARAJ

Advocate,

B-1, Sai Sadan, No.27, North Mada Street,

Thiruvanmiyur,

Chennai – 600 041.

Mobile No. 99621-47678, 94443-62252

Mail ID [email protected]

4. The address of the Respondents for service of all notices in the

Appeal is as set out hereunder:

i) Tamil Nadu Electricity Regulatory Commission,

TIDCO Office Building,

19A, Rukmani Lakshmipathy Salai,

Marshall Road,

Chennai – 600 008.

Phone number: 044 2841 1378, 044 2841 1379

E-mail: [email protected]

Fax Number 044 2841 1377

Page 10: Correction Required Copy of Appeal

ii) Tamil Nadu Generation and Distribution Corporation Ltd,

144, Anna Salai,

Chennai – 600 002.

represented by its Chairman and Managing Director,

Phone number: 044 2852 0167

E-mail [email protected], [email protected]

Fax Number: 044 2852 0167

iii) Tamil Nadu Transmission Corporation Ltd,

144, Anna Salai,

Chennai – 600 002.

represented by its Chairman and Managing Director,

Phone number: 044 2852 0167

E-mail [email protected]

Fax Number: 044 2852 0167

5. Jurisdiction of the Appellate Tribunal

The Appellant declares that the subject matter of the Appeal is within the

jurisdiction of this Tribunal.

6. Limitation

The Appellant declares that the Appeal is filed within the period specified

in sub-section (2) of section 111 of the Act as the Appeal is preferred well

before the expiry of 45 days (i.e., 15.09.2012) from the date of Order of

Tamil Nadu Electricity Regulatory Commission (31.07.2012) against which

this Appeal is preferred.

7. The facts of the case are given below:

7.1 The Appellant Association had earlier filed Petitions before various fora on

issues relating to the rights of its members in the Electricity Sector,

including this Tribunal.

7.2 Before the Electricity Act 2003 came in to force, the sale of wind energy,

the price on the sale and all other issues relating to captive consumption

of wind energy were all being regulated by Power Purchase Agreement

Page 11: Correction Required Copy of Appeal

(PPA) as decided by the then Tamilnadu Electricity Board (TNEB) and

accordingly, all matters have been regulated as per the PPA. After coming

in to force of the Electricity Act 2003, the First Respondent has started

issuing orders on tariff on wind energy and on other allied issues from time

to time as per the powers vested under Section 61 of the Electricity Act

2003. Accordingly, the first Order of its kind was issued on 15.05.2006 in

Order No.3 of 2006. Thereafter a second Order of its kind was issued on

20.03.2009 in Order No. 1 of 2009. This Order was having the validity

originally up to 31.03.2011. However, owing to reasons attributable to the

1st Respondent, no fresh order was issued and the Order dated

20.03.2009 itself was extended thrice by the 1st Respondent Commission

by its orders dated 08.04.2011 (up to 31.12.2011), 15.12.2011 (up to

30.06.2012) and 30.06.2012 (up to 31.07.2012). Finally, the impugned

order was issued on 31.07.2012 in Order No. 6 of 2012 which came in to

effect from 01.08.2012 onwards and the same is being appealed through

this present appeal petition.

7.3. The Respondent Commission while issuing orders on wind energy took

care about the tariff to be paid for the wind energy generators when it is

sold to the 2nd Respondent and accordingly, various parameters have

been considered to calculate the capital cost of the wind energy generator.

Accordingly, after taking in to certain percentage of RoE, the Respondent

Commission has been fixing tariff for the wind energy generators on

various dates through the Tariff Orders. Accordingly, there are at present

three tariffs in operation till the impugned order was issued depending up

on the dates of commissioning of the wind electric generators (WEGs).

One tariff relates to the WEGs commissioned before 15.05.2006 at

Rs.2.75 per unit. The next tariff is Rs.2.90 when the WEGs have

commissioned after 15.05.2006 and however before 18.09.2008. The third

tariff is Rs.3.39 which is applicable to WEGs commissioned after

19.09.2008 and up to 31.07.2012. Any WEG commissioned on or after

01.08.2012 is now eligible for a tariff of Rs.3.51 per unit as per the

impugned Order. The above tariff prices are fixed ones and do not change

by true value of money. However, the matter is pending before the

Supreme Court of India and as such, the Appellant is not raising the

issues in any manner in the present Appeal petition.

7.4. Before any tariff Order is made, the Respondent Commission is in the

practice of circulating consultative papers for getting opinion from the

stakeholders on various parameters to be decided in the exercise of fixing

tariff and other related issues on wind energy generation and captive

Page 12: Correction Required Copy of Appeal

consumption. This is mandatory under the provisions of Section 61 of the

Electricity Act 2003 and as well under the provisions of Guidelines for

Fixation of Purchase Price for Power Produced from Non-Conventional

Energy and also under the provisions of Policy announcement made by

the Ministry of Non-Conventional Energy Sources, Government of India on

remunerative tariff for non-conventional energy sources. However, during

the course of issuing the impugned order alone, no such consultative

paper was circulated among the stakeholders as was done before the

issuance of orders dated 15.05.2006 and 20.03.2009. Even when the

Appellant attempted to insist for the circulation of the consultative paper,

the Respondent Commission has not issued the consultative paper and

unilaterally refused to issue the consultative paper by its letter dated

04.06.2012 written to the Appellant.

7.5. Even though the earlier Tariff Order dated 20.03.2009 has to expire by

31.03.2011, for no reasons it was extended for more than 19 months

making the control period of two years also extended without any rhyme or

reason. For extension of the order dated 20.03.2009 no sufficient reason

was provided. Hence, it amounts to change and extension of control

period also indirectly from the agreed period of two years (24 months) to

43 months.

7.6. Instead of making the consultative papers circulated among all

stakeholders, the Respondent Commission has issued public notices

calling for comments and suggestions only on certain selective areas

totally denying opportunity in all other parameters. Particularly in the

matter of calculating the capital cost no opportunity was provided to all the

stakeholders as was done before passing the earlier orders on 15.05.2006

and 20.03.2009.

7.7 Further, the Respondent Commission has now made drastic changes

through the Impugned Order and altered the status in respect of wind

energy captive consumers by introducing certain new charges like

Transmission Charge, Transmission Loss Compensation Charge. Further,

it has also made some changes by converting the existing Wheeling

Charge and Banking Charge from kind to cash. Even though such

changes have been ordered in the Impugned Order, in the absence of

circulation of any prior Consultative Paper the objective for such changes

were not brought to the knowledge of the stakeholders. Hence, the

stakeholders were not provided with any opportunity to make comments

for introduction of new charges and altering certain existing charges from

Page 13: Correction Required Copy of Appeal

kind to cash. Thereby, the Respondent Commission has totally denied the

opportunity for the stakeholders to provide suitable comments. Non

circulation of Consultative Paper is therefore, a clear violation of the

TNERC -Power procurement from New and Renewable Sources of

Energy Regulations, 2008, under Regulation 4(1)(b) as far as the

requirement of public response is concerned.

7.8. Further, the Respondent Commission has not critically analyzed various

submissions and comments made by the Stakeholders including the

Appellant before passing the impugned Order. The comments and

suggestions made by stakeholders including the Appellant were not taken

in to consideration in their letter and spirit and they were not even found

discussed in suitable manner while deciding the matters. It has almost

become a ceremonious way of dealing the entire matter and accordingly,

nothing was considered or discussed in detail before passing the

Impugned Order. As such, the Impugned Order besides to this reason

needs to be struck down for all other reasons submitted below in the

Appeal Petition.

8. Formulate (i) the facts in issue or specify the dispute between the

parties and (ii) summarize the questions of law that arise for

consideration in the appeal:

8.1 (a) Question of Law:

The questions of law leading to the filing of this Appeal are as follows:

1. WHETHER the 1 st Respondent is legally correct in fixing the purchase price of wind energy at Rs.3.51 per unit without taking into account of various capital cost like IDC(infrastructure development charge), O & M charges(Operation and maintenance), Panchayat taxes, MAT(Minimum alternative tax), insurance cost, etc. which procedure is against National Tariff Policy and and also against the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008?

2. WHETHER the impugned order is legally sustainable when the Wind Energy Generators are totally covered by a separate energy wheeling agreement(EWA)?

3. WHETHER the impugned order is legally maintainable when no consultative process was properly followed which mandatory under the Act?

4. WHETHER the impugned order issued by the 1 st Respondent is legally valid in so far as para 9.2 compelling the WEGs commissioned before the date of impugned order, viz., 31.07.2012 inspite of the Regulation 6 of the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 which seeks to exempt such a coverage totally?

Page 14: Correction Required Copy of Appeal

5. WHETHER the order issued by the 1 st Respondent goes consistent between para 4 and para 9.2?

6. WHETHER the order of the 1 st Respondent in withdrawing deemed demand benefit to the Wind Energy Generators is legally correct when demand and energy are inseparable?

7. WHETHER the impugned order issued by the 1 st Respondent is correct in so far as para 9.2 to bring all existing WEGs under the impugned order totally neglecting the principles of promissory estoppels and legitimate expectation?

8. WHETHER the 1 st Respondent is legally correct in fixing the transmission charge on capacity basis when the wind power is infirm?

9. WHETHER the 1 st Respondent has correctly fixed the transmission charge, wheeling charge and transmission loss compensation charge on actual basis?

10.WHETHER the 1 st Respondent has correctly fixed the banking charge on actual basis?

11.WHETHER the 1 st Respondent is legally correct in the matter of collection of grid connectivity charges when the total grid is maintained by the 2 nd Respondent and 3 rd Respondent and no grid is exclusively available for the WEGs?

12.WHETHER the 1 st Respondent is legally correct in fixing the Scheduling and system operation charges when the wind power cannot be scheduled in the present circumstances?

The Appellant deals with every question of law under separate heading here below:

8.2 The complexities of making the Applicability of the Order:

The appellants submits that after coming in to force of the Impugned

Order, there are four categories of WEGs now functioning in the State of

Tamilnadu and each are governed by a separate practice and Order and

accordingly, with separate Power Purchase Agreement or Energy

Wheeling Agreement as the case may be depending up on the date of

commissioning of the WEG.

a) Those WEGs commissioned prior to 15.05.2006 are covered by PPA

(Power Purchase Agreement) and not interfered by the Commission’s

Order dated 15.05.2006 on wind energy in any manner. These WEGs

however, have the option to renegotiate and can come to the benefits

of the Commission’s Tariff Order on Wind Energy dated 15.05.2006 by

renegotiating the PPA in to EPA (Energy Purchase Agreement) or

EWA (Energy Wheeling Agreement) as the case may be. In order to

Page 15: Correction Required Copy of Appeal

make applicable the Order dated 15.05.2006 of the Commission, there

was a specific provision made available in the Order itself to

accommodate the option of renegotiation under Clause 4. Further, they

have the option to continue with the existing arrangement under PPA

Scheme itself if they are not willing for a renegotiation and as such, if

they are not willing, they can continue in the old scheme itself without

renegotiation towards the EPA/EWA Scheme.

b) Same is the case when the next Tariff Order No.1 of 2009 dated

20.03.2009 came in to force from 19.09.2008 onwards. Accordingly,

except for the purpose of Tariff for all other terms and conditions,

renegotiation scope was provided for re-entering in to new EWA in

Clause 4 of the Order dated 20.03.2009.

c) However, in the present impugned Order, the Respondent Commission

has issued orders totally contradicting the existing schemes by which

an existing WEG can either opt for the new scheme or to continue with

the old scheme which was under the sole option of the WEG owner.

Even though such a scheme has to be provided under the concept of

promissory estoppels and legitimate expectation, the Respondent

Commission has greatly erred in this matter and accordingly, no such

option was made available in the Impugned Order. Besides to the

same, the Impugned Order is having confusing contents in Para 4 and

Para 9.2 totally contradicting with each other.

d) Para 4 of the Impugned Order says as follows:

“Since changes are made in various provisions of the previous Order,

the Commission considers it appropriate to give effect to all of the

provisions contained in this Tariff Order only prospectively. This Order,

therefore, shall come in to effect from 01.08.2012.”

But whereas Para 9.2 of the Impugned Order says as follows:

“Other related charges and terms and conditions specified in the Order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning”

The impugned Order therefore, mandates heavy costs on captive

consumption of wind energy with effect from 01.08.2012 and however,

the EWA already in force is not in support of the said costs to be

Page 16: Correction Required Copy of Appeal

collectable from the executants of the EWA. Hence, any WEG owner

could opt to continue to be in the old agreement and therefore, there is

no mandatory necessity to switch over to the new system from

01.08.2012 onwards. This liberty was provided in both the earlier

orders and however, only in the Impugned Order, it has been fully

wiped out. For no reason, the existing WEG owner could be

compelled to go for the new Order which costs him heavily on various

areas and therefore, such a compulsion is against the principles of

natural justice.

e) Each WEG is covered by a separate Energy Wheeling Agreement and

as new charges are likely to be levied in place of old charges as per

the impugned Order, the existing WEG owners may not opt to come for

the new Order and they may like to continue to remain in the existing

EWA itself without altering their status. Based on the terms and

conditions prevailed during the time of taking investment decisions, the

WEG owners has come forward for going to the wind power. It is not

therefore fair to drive them to a new set of costs which were not even

thought of, when the investment decision was originally taken. Now

asking them for a sweep change is not fair and reasonable on the

principles of promissory estoppels and legitimate expectation. All

investments prior to 31.07.2012 (i.e.,) before the issuance of the

impugned Order have happened only based on either Order No.3 of

2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now

without any rhyme or reason, to ask them also to come for the new

Order with high costs is against the principles of the natural Justice,

promissory estoppels and legitimate expectation.

8.3 In para No. 4 of the impugned Order, the 1st Respondent Commission has

made as follows:

……… This order contains many provisions not only relating to tariff but

also relating to other terms and conditions. Since charges are made in

various provisions of the previous order, the Commission considers it

appropriate to give effect to all the provisions contained in this tariff Order

only prospectively. This Order, therefore, shall come into effect from

01.08.2012.

Page 17: Correction Required Copy of Appeal

But, very much contrary to its own Order in Para No.4, in Para No.9.2 the

1st Respondent Commission has made it as follows.

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

8.4 Hence, from the contradictory statements of the 1st Respondent

Commission, the 2nd Respondent TANGEDCO has given working

instructions to make applicable all the new charges and all other new

terms and conditions to all WEGs who are totally controlled by a different

Energy Wheeling Agreement and accordingly, the 2nd Respondent has

started raising bills for new charges even though there is no provision in

the Energy Wheeling Agreement to claim such charges. The existing

benefits like deemed demand charges were totally withdrawn even without

a notice. Hence, due to the erroneous and anomalous nature of the

impugned Order of the 1st Respondent, all WEG owners/members of the

Appellant are put in too much of financial difficulty and hardship leading to

irreparable loss during every month from 01.08.2012 onwards.

8.5 Further, under the TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008, under Regulation 6, it has been

made as follows:

6. Agreement and Control period

The tariff as determined by the Commission by a general or

specific order for the purchase of power from each type of

renewable source by the distribution licensee as referred to in

clause 4(3) shall remain in force for such period as specified by the

Commission in such tariff orders. The control period may ordinarily be

two years. When the Commission revisits the tariff and allied issues,

the revision shall be applicable only to the generator of new and

renewable energy sources commissioned after the date of such

revised order.

8.6 However, much contrary to the above Regulation, the Respondent

Commission in Para 9.2 of the Impugned Order, makes it mandatory the

contents of the Order totally applicable for all the WEGs irrespective of the

date of commissioning. The Regulation mandates that When the

Commission revisits the tariff and allied issues, the revision shall be

Page 18: Correction Required Copy of Appeal

applicable only to the generator of new and renewable energy

sources commissioned after the date of such revised order. But much

contrary to the same in Para 9.2 of the Impugned Order the Respondent

Commission states as follows:

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

Hence, the Impugned Order is totally against the very letter and spirit of

the Regulation and on this score alone, the Impugned Order needs to be

set aside.

8.7 While the 1st Respondent Commission dealing with execution of Energy

Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has

made it as follows:

8.17. Energy Wheeling Agreement (EWA)

The format for Energy Wheeling Agreement (EWA) shall be evolved as

specified in the Commission’s regulation in force. The period of agreement

and other terms and conditions shall be as per the terms of open access

regulations in force issued by the Commission.

Hence, even assuming that the Order is applicable for all WEGs

irrespective of the date of commissioning, in order to enforce the various

terms and conditions stipulated in the impugned Order, it requires an

Energy Wheeling Agreement and accordingly, after getting it signed by the

parties concerned only, this Order would be given effect and whereas the

2nd Respondent has not cared to proceed to get the EWA draft vetted and

approved by the Commission after following the due process of

stakeholders’ consultation. This again makes the working instructions

invalid as no new Energy Wheeling Agreement was executed and no text

of Energy Wheeling Agreement was circulated for providing opportunity for

the stakeholders in the matter of finalization of the text of new Energy

Wheeling Agreement.

8.8 The Appellant submits that each WEG has a specific commissioning date

and according to the date of commissioning, the said WEG is governed by

an Order of the Commission and therefore, unless the WEG owner opts

for renegotiation of the existing agreement, the new Order and the various

terms and conditions stipulated in the new Order cannot become

Page 19: Correction Required Copy of Appeal

automatically enforceable with the WEGs commissioned before the date

of issuance of the Order in any manner. All the previous orders have very

specifically made this clause under the heading of “Applicability of the

Order” under Para 4 both in Order No. 3 dated 15.05.2006 and in Order

No.1 dated 20.03.2009. Such an arrangement is required and goes in

concurrence with the Regulation 6 of TNERC-Power procurement from

New and Renewable Sources of Energy Regulations, 2008 quoted supra.

For the sake of convenience of reference the said paragraph in Order

No.3 dated 15.05.2006 is reproduced below:

4.0 APPLICABILITY OF ORDER

This order shall come in to force from the date of its issue. This order shall

be applicable to all future and renewal of existing contracts/agreements for

the Non-Conventional Energy Sources (NCES) based Generating Plants

and Non-Conventional Energy Sources based Co-Generation Plants

located within the State of Tamilnadu. It should be noted that the existing

contracts and agreements between NCES based generators and the

distribution licensee signed prior to the date of issue of this order would

continue to remain in force. However, the NCES based generators and the

distribution licensees shall have the option to mutually re-negotiate the

existing agreements or contracts if any, in line with this order even before

the expiry of the existing agreements or contracts. Any renewal of the said

contracts/agreements, new contracts/agreements shall be in line with this

order.

8.9 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the

Commissioned has made as follows:

4. Applicability of this Order

Order No.3 dated 15.05.2006 of the Commission lays down a control

period of three years for that order and therefore, normally the next order

should have taken effect from 15.05.2009. The Commission in the

Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has

ruled that the control period of three years specified in order No.3 dated

15.05.2006 is waived from the date of issue of that Order. The control

period of three years, thus, stands terminated on 19.09.2008. Therefore,

the Commission holds that all the wind energy generators commissioned

on or after 19.09.2008 shall become eligible for the benefits of the present

order, subject to the condition that the monetary benefits shall accrue from

the date of this order. The existing agreements between the wind energy

Page 20: Correction Required Copy of Appeal

generators and the distribution licensee shall continue to be valid. The

parties to the agreement are at liberty at any time to renegotiate the

existing agreement mutually in accordance with this order. The agreement

between the wind generators and the distribution licensee in relation to all

machines commission on or after 19.09.2008 shall be in conformity with

this order.

8.10 The above two orders of the Commission perfectly fit with the Principles of

natural Justice coupled with the theory of promissory estoppels and

legitimate expectation. Further, such a provision is also in line with the

Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Each WEG has come in to being by

a large capital investment. Hence, what set of terms and conditions are

applicable at the time of making investment would continue to be in force

till the WEG promoter opts to continue with it as the investment decision

has happened only with reference to the knowledge, information, rights

and responsibilities made available at the time of making investment

decisions. The members of the Appellant having altered their status based

on certain terms and conditions prevailed at a point of time when they

invested on wind energy, cannot now be unilaterally forced to come for

new terms and conditions. Then it becomes an arbitrary exercise and the

impugned Order could only be construed to have the effect of unilateral

and arbitrary exercise of power. Further it is violative of the principles set

out under Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008.

8.11 Further, as per the Clause 11 of the existing Energy Wheeling Agreement

(EWA) by each of the members of the Appellant executed, it has been

made as follows:

“11. Terms and Conditions agreement period:

(1) The agreement shall be valid for a minimum period of 5 years.

(2) The parties to the agreement shall be given the option to exit for

violation of the agreement after serving a notice of three months on the

other party.

(3) The parties to the agreement are at liberty at any time to renegotiate

the existing agreement mutually in accordance with the Commission’s

order in force.”

Page 21: Correction Required Copy of Appeal

8.12 From the Clause 11 (3) of the existing EWA, it could be seen that there is

a liberty extended to parties that either they can renegotiate the existing

agreement for going to the new agreement as per the new orders if any or

they can continue to remain as such in the existing agreement itself. The

option is therefore, vested with the party concerned and therefore, no

party could be compelled or forced to accept any new terms and

conditions for which no agreement was signed earlier. This option made

available to the WEGs is totally wiped out in the impugned Order. The

impugned Order unilaterally forces all the WEG owners irrespective of the

date of commissioning to come for the new arrangement whereby heavy

costs are involved with large civil consequences.

8.13 Due to the implementation of the working instructions of the 2nd

Respondent based on the impugned Order of the 1st Respondent, every

member of the Appellant is losing heavy money every month due to

certain new charges as leviable due to the fresh terms and conditions of

the new Order with effect from 01.08.2012 onwards. All the members of

the Appellant are totally unaware of the terms and conditions while they

made investments and altered their status to erect and commission the

WEGs for the purpose of captive consumption. All their investment plans,

RoE, etc., have been based only on the available terms and conditions as

enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009.

Hence, even though the Commission has made it clear in Para No.4 that

the terms and conditions are to be applied prospectively, it has

contradicted its own versions and accordingly, in Para No.9.2 it made it to

applicable to all WEGs irrespective of the date of commissioning.

Therefore, the 1st Respondent Commission has committed a serious error

and hence it needs to be corrected and rectified by this Hon'ble Tribunal.

9. Therefore, the Appellant humbly prays that the members of the Appellant

having made investments and altered their status based up on certain

terms and conditions stipulated by such orders which were in force during

those points of taking investment decisions, cannot now unilaterally and

arbitrarily be directed to come for a new set of terms and conditions by the

impugned Order which has a very strong impact on their financial

workings and thereby the entire operation becomes totally unviable. The

impugned Order imposes serious civil consequences and therefore, it

could never be retrospective for any reason. Further, the impugned Order

contradicts with each other as far as Para No.4 and Para No.9.2 are

concerned. Further, Para 9.2 of the Impugned Order is in total

Page 22: Correction Required Copy of Appeal

contradiction of Regulation 6 of TNERC-Power procurement from New

and Renewable Sources of Energy Regulations, 2008. Hence, it needs to

be set aside on this very score alone.

10. Further, in having ordered that all WEGs irrespective of their date of

commissioning to come for the new Order which casts serious civil

consequences to pay more charges, the 1st Respondent has clearly

violated the Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing

but arbitrary exercise of powers, against the approved cannons of law,

against the Principles of natural Justice and against the Principles of

promissory estoppels and legitimate expectation and therefore, it is

expropriatory under Article 14 of the Constitution of India and hence, the

Order needs to be struck down for this score also.

(b) Question of facts:

11. This appeal is of two parts. The first part deals with the matter of

applicability of the Order for the existing WEGs also which were

commissioned prior to the issuance of the impugned Order and the same

was dealt in the earlier paragraphs. The second part of the Appeal deals

with the various charges notified in the Impugned Order. When it is

considered to be made applicable even only to the future WEGs,

considering the future investment that has to happen in the State of

Tamilnadu in the wind energy sector and also considering the fairness of

the charges, the method of arriving charges and all other related matters,

the appeal has to pass through the second stage also. Hence, those

matters are dealt in the second part of the Appeal in the below

paragraphs. Now the Appellant proceeds for the second part of the

appeal.

12. Section 61 of the Electricity Act 2003, permits the 1st Respondent

Commission to specify terms and conditions for determination of tariff and

however, such a Tariff determination exercise should be guided by the

Principles laid down by the Act itself and also by the Principles and

Methodologies specified by the Central Commission for the determination

of tariff and also by the National Electricity Policy and Tariff Policy.

13.1 Much contrary to the policies laid down both by Central Commission and

also by National Electricity Policy and Tariff Policy, the Respondent

Page 23: Correction Required Copy of Appeal

Commission has issued the impugned Order in very many areas totally

neglecting the legal and regulatory provisions.

13.2 Any fixation of tariff on energy particularly through NCES, needs to be in

consonance with the National Electricity Policy. The National Electricity

Policy mandates the following manner of approach on power from

Cogeneration and NCES.

“5.12 COGENERATION AND NON-CONVENTIONAL ENERGY

SOURCES

5.12.1 Non-conventional sources of energy being the most environment

friendly there is an urgent need to promote generation of electricity based

on such sources of energy. For this purpose, efforts need to be made to

reduce the capital cost of projects based on non-conventional and

renewable sources of energy. Cost of energy can also be reduced by

promoting competition within such projects. At the same time, adequate

promotional measures would also have to be taken for development of

technologies and a sustained growth of these sources.

5.12.2 The Electricity Act 2003 provides that co-generation and generation

of electricity from non-conventional sources would be promoted by the

SERCs by providing suitable measures for connectivity with grid and sale

of electricity to any person and also by specifying, for purchase of

electricity from such sources, a percentage of the total consumption of

electricity in the area of a distribution licensee. Such percentage for

purchase of power from non-conventional sources should be made

applicable for the tariffs to be determined by the SERCs at the earliest.

Progressively the share of electricity from non-conventional sources would

need to be increased as prescribed by State Electricity Regulatory

Commissions. Such purchase by distribution companies shall be through

competitive bidding process. Considering the fact that it will take some

time before non-conventional technologies compete, in terms of cost, with

conventional sources, the Commission may determine an appropriate

differential in prices to promote these technologies.”

13.3 Accordingly, even the Central Electricity Regulatory Commission while

issuing the Regulation on CERC (Terms and Conditions of Tariff)

Regulations, 2009 has specified that the terms and conditions of Tariff

need to aim the promotion of cogeneration and generation from renewable

resources under Regulation 3 (5)(g). Therefore, the Green Energy Sector

Page 24: Correction Required Copy of Appeal

needs to be given priority from other sectors considering the following

facts;

(1) Clean Energy

(2) Non-depletion of conventional sources and

(3) Harnessing the natural resource i.e. wind for the generation of

electricity.

The Government of India and all other State Governments are very much

particular about promoting the green energy through renewable sources

and accordingly, a specific Ministry is operating at the Center in the name

and style of Ministry for New and Renewable Energy (MNRE).

13.4 Inter alia, the Commission whenever attempts to fix the tariff for the Wind

Energy Generators (WEGs) has to consider the capital cost involved from

time to time and based on a RoE (Return on Investment) working, the

Commission has to fix the retail tariff for the wind energy. However, even

though various parameters have been considered, the following important

parameters in spite of strong suggestions made by the Appellant have not

been considered for arriving the total cost per MW and accordingly, the

Commission has failed to correctly arrive the actual capital cost involved.

Costs not considered for calculation of total cost of WEG

a) Infrastructure Development Charges (IDC) at the rate of Rs.30 Lakhs

per MW – One time.

b) O&M charges at the rate of Rs.1.6 Lakhs per year with 5% annual

escalation - Recurring

c) Panchayat Taxes coming to Rs.10 Lakhs per MW at the first year and

goes with Rs.3 Lakhs every year per MW – Recurring

13.5 The Commission has decided to allow 19.85% pretax return on equity in

the Impugned Order as adopted in the previous order. The Commission

has greatly erred by omitting to note that the RoE calculated as 19.85%

in the previous order was based on the 10% MAT which prevailed at the

time of issue of previous order. At present the MAT is 20%. Therefore

RoE should be calculated based on the present rate of 20% MAT.

13.6 It is to be noted that the Commission in its order merged the insurance

cost with O & M expenses and considered both at only 1.1% of the

capital cost towards the single head of O & M expenses. At present the

Page 25: Correction Required Copy of Appeal

insurance charge is around 0.7%. Out of 1.1% of the O & M expenses,

on exclusion of insurance charges of 0.7%, it would be difficult and

practically not possible to maintain the WEGs with the balance of 0.4%

towards the O & M expenses. Therefore, a reasonable percentage of

around 1.8% inclusive of insurance should have been considered while

taking the cost on O&M with insurance cost. Therefore, failure to consider

the same, amounts to wrong calculation of arriving the capital cost and as

such, all consequential working becomes not actual and correct and

therefore, it needs to be revised.

13.7 Hence the capital cost arrived by the Respondent Commission for issuing

the impugned Order is not true and does not reflect the real state of

affairs which would have been otherwise extremely more on actual facts.

The Commission has taken Rs.5.75 Crores as the capital cost per MW

and however, no break up was provided for the same. It is not found

included with the left out cost of Rs.45 Lakhs on IDC, O&M Charges and

Panchayat Taxes. Besides to them considering the increased rate of

MAT and right calculation of insurance costs it would work out more and

accordingly, a Tariff of not less than Rs.3.90 per unit needs to be fixed.

Hence, the Appellant prays the Hon'ble Tribunal to Order to remand back

the matter to the Commission to consider all left out expenses and

investments and accordingly, direct to arrive a real capital cost and

thereby to fix the reasonable cost for the wind energy generators in line

with the National Tariff Policy. It is painful to note that no explanation

was provided in the Impugned Order as why the above costs have not

been taken in to account while arriving the total capital cost.

13.8 Hence, to the above extent, the Order of the 1st Respondent should be set

aside insofar as fixation of tariff of Rs.3.51 per unit and accordingly, based

on the real costs, the Tariff should be fixed at Rs.3.90 per unit of energy

generated from windmills and the same should be made applicable from

01.01.2012 by which date the earlier Tariff Order dated 20.03.2009 would

have been expired but for its extension. Unless the new tariff is ordered to

be effective from 01.01.2012, the control period of 24 months as notified in

Regulation 6 of TNERC Power Procurement from New and Renewable

Sources of Energy Regulations, 2008 would become in-operative.

14 When coming in to the various charges leviable on the wind energy

captive consumers, the Commission has gone again beyond its scope in

Page 26: Correction Required Copy of Appeal

fixing such charges and for the sake of convenience, the Appellant deals

with each charge separately in the forthcoming paragraphs.

15 Transmission Charges/Wheeling Charges/Transmission Loss

Compensation Charge:

15.1 Hither to, the Commission has ordered to collect only one charge namely

wheeling charge which included the charge on Transmission, the Charge

on Wheeling and the Charge on Transmission Loss. This is how Order

No.3 of 2006 dated 15.05.2006 and Order No.1 of 2009 dated 20.03.2009

have specified. For the sake of convenience, the relevant portions of the

above orders are extracted below:

Extract of Order No.3 dated 15.05.2006:

“Guidelines of MNES and orders of other Commissions on

Transmission and Wheeling Charges.

MNES Guideline is 2 % of the energy fed into the grid

TNEB’s existing charges is 5%

Charges in other States

UP, MP, Maharashtra and West Bengal - 2 %

Gujarat - 4 %

Rajasthan -10 %

UP – 12.5%

Andhra 50 paise / unit as network charge and 28.4 % of energy.

Commission’s Views / Decisions

The contention that wind energy generation is distributed and helps the

grid as distributed generation is no longer valid as far as Tamil Nadu is

concerned. There is a phenomenal growth of wnd Energy generators in

Tamil Nadu and they are mostly concentrated in Palghat, Shencottah

and Aralvoimozhi passes. These areas are considered to be “poor load /

demand regions” and most of the power generated in these places have to

be evacuated to the far off load centres.

Regarding the transmission and wheeling charges, the existing practice

(which includes the line losses in kind) is given below:

Page 27: Correction Required Copy of Appeal

Wind Energy Generators 5%

Biomass 10%

Co-generation Within 25 KM usage 2%

Beyond 25Km usage 10%

Total transmission and wheeling charges including transmission and

distribution losses for various voltage levels of injection and drawal have

been specified in the orders of the Commission on transmission and

wheeling charges against the petition of TNEB in TP1/2005. As per that

order, if the point of injection and point of drawal is at 33 KV level, the total

transmission and wheeling charges will be very much less than the

existing 10% mentioned above. Also the transmission and wheeling

charges fixed by the Commission for fossil fuel based Cogeneration in

another order is 7%. To give encouragement for promotion of renewable

energy and Co-generation, the Commission decides the following

transmission and wheeling charges which include the line losses in kind:

Wind Energy Generators 5 % of energy

Biomass Within 25 KM usage : 3 %

Beyond 25 KM usage : 6 %

Co-generation Within 25 KM usage : 3 %

Beyond 25 KM usage : 6 %

The transmission and wheeling charges fixed as above will get reduced, if

the voltage level at the point of injection and at the point of drawal is equal

to or more than 110 kV. The reduction will be based on the Commission’s

order against the petition no TP1/2005 from TNEB. As an example, if the

injection voltage by the NCES generator is at 110 kV and the drawal for

captive usage is also at 110 kV, the transmission charges specified by the

Commission in the above said order will work out to around 5.80 %. Such

cases shall be specifically brought to the Commission and the rate

revised.

Regarding the captive usage for LT consumers, Commission accepts the

difficulties expressed by TNEB. Further, since the LT services do not have

ToD metering arrangement, it may not be possible to uniformly implement

the various provisions covered in this order. Hence it is decided to restrict

the captive usage to HT services only for the present.

Page 28: Correction Required Copy of Appeal

The third party sale is permitted subject to the Commission’s regulation on

open access.”

15.2 Likewise the extract of orders in Order No.1 of 2009 dated 20.03.2009 is

also provided below for the sake of convenient reference:

“8.3 Transmission and wheeling charges

The transmission and wheeling charges were initially fixed by the TNEB at

2% in 1986 The charges were enhanced to 5% by the TNEB in September

2001. They remained at that level till 2006. The Commission adopted the

same rate of 5% towards the transmission and wheeling charges including

line losses in order No.3 dated 15-5-2006. The TNEB has now pleaded for

stepping up the charges to 15% on the ground that transmission and

distribution losses have gone up in the recent years. The transmission and

distribution losses of the TNEB has remained static at 18% since 2003

and therefore, the Commission does not see merit in the plea of the TNEB

to abruptly raise the charges to 15%. The Commission decides to retain

the wheeling and transmission charges including line losses at 5%

uniformly for captive use and third party sale of wind energy in the case of

HT / EHT consumption. However, the charges in regard to captive use

and third party sale in LT services are fixed at 7.5%.”

15.3 From the above extracted portions of the earlier Orders, it could be seen

that the charge on Transmission, Wheeling and Loss on Transmission

was considered as one component and accordingly, the Commission has

fixed 5% of the units so wheeled as wheeling charges to compensate all

the three charges. The Commission has also commented that no merit

was found in the plea of the then TNEB to increase the charges to 15%

abruptly as the Transmission and Distribution Losses of the TNEB has

remained static at 18% since 2003. This was the position during 2009

also. Thereafter there was no considerable change in the position and as

such the Transmission and Distribution Losses continued without any

considerable increase. But however, the Respondent Commission has

now steeply increased the charges and accordingly, one component so far

maintained for Transmission, Transmission Loss and Wheeling, was split

in to three separate components namely Transmission Charge, Wheeling

Charge and Transmission Loss Compensation charge in the impugned

Order which view is nothing but totally taking a U turn against its own

Page 29: Correction Required Copy of Appeal

views observed in earlier occasions while issuing orders on 15.05.2006

and 20.03.2009.

15.4 The justification provided for making the single charge in to three separate

charges as adduced by the Commission is that the TNEB has now

become unbundled and therefore, it has to be collected separately for

Transmission and Wheeling as the Transmission Charges would go to the

Third Respondent and the Wheeling Charges would go to the Second

Respondent. However, what is neglected in splitting up one single charge

in to three separate charges, is that the quantum of charges all put

together. If all the charges put together works out to 5% of the total units

wheeled, then the rationale behind the argument would be justified.

However, without adopting such a course, the Respondent Commission

has increased manifold the charges which come to almost 1188% of the

old charges.

15.5 The following table would prove how the charges have been exorbitantly

increased.

Sl.No. Name of the

Charge

As per previous

Orders

As per the

Impugned Order

1 Wheeling Charge 5% of the units

wheeled which

converts in to 9.31

paise per unit

23.27 paise per

unit

2 Transmission

Charge

No such charge 47.33 paise per

unit

3 Transmission

Loss

Compensation

Charge

No such charge 40 paise per unit

4 Total 9.31 paise 110.6 paise

5 Percentage of

increase

1188%

15.6 The Commission has failed to observe that the Loss in Transmission has

not been changed and remained constant throughout the period.

Therefore, if the Commission wanted to notify the charges in to 3 different

components, it would have notified all the 3 charges and however, the

total of which should not have been increased from the existing price of

Page 30: Correction Required Copy of Appeal

9.31 paise per unit and accordingly, the total of all the 3 charges should

have been remained only at 9.31 paise per unit and not at the exorbitant

cost of 110.6 paise per unit which is almost 12 times of the existing cost.

Hence the Appellant submits that the Commission has not properly

applied its mind before passing the impugned order to the above extent.

The Commission has not justified why such a steep increase is required at

present. The above charges are therefore, unilateral, without mind

application and against the concept of fairness and equity.

15.7 Further, the Respondent Commission knows well that the wind power is

totally infirm in nature and WEGs are having only the lowest plant load

factor (PLF) or capacity utilization factor (CUF). In the TNERC-Power

procurement from New and Renewable Sources of Energy Regulations,

2008, the firm and infirm power were defined. According to the definitions,

wind power is always infirm by nature. Transmission Charges taken at a

basis of Rs.6,483/- per MW per day is for the firm power which is capable

of producing power during all the 24 hours in a day, all the 7 days in a

week and all the 365 days in a year. But whereas, the WEGs are seasonal

and their PLF is influenced by various factors like grid availability, wind

availability and machine availability. Even the Respondent Commission in

the same impugned Order has observed that the wind energy in

Tamilnadu is enjoying a CUF of 27.15% in Para No.7.3.2 which is

extracted below:

“7.3.2 The assessment of CUF has widely varied from a figure of 25%

suggested by Indian Wind Power Association, 25% suggested by Indian

Wind Turbine Manufacturers Association, 24.26% suggested by Tamil

Nadu Spinning Mills Association and 25% suggested by The Southern

India Mills’ Association. IREDA suggested CUF in the range of 22 – 30%.

TANGEDCO stated that the higher size wind machines may even run at

low wind speed. Commission observes that the new wind machines are

technically advanced, more efficient, can run even at low speed and are

with higher hub heights. Therefore, the Commission decides to retain the

present CUF of 27.15% for the new machines also for this control period.”

15.8 The Association of the Appellant has already made strong studies and

accordingly, arrived at a figure of 24.26% as the CUF in Tamilnadu for the

WEGs and based on these studies only, it has recommended to consider

the CUF at 24.26%. But however, without making any study, the

Respondent Commission has taken the CUF as 27.15% without any

Page 31: Correction Required Copy of Appeal

supporting document. Further, the impugned Order says that the

Commission has decided to retain the present CUF of 27.5% for the new

machines also for this control period. But whereas the Transmission

Charge, according to the impugned Order is applicable not only to new

machines but also for all the old machines and that too irrespective of the

date of commissioning. Hence, the rational way of collecting the

Transmission Charge would be only on the units transmitted in to the grid

and not on the capacity of the WEG as a whole.

15.9 Even though each WEG by virtue of its make and size has a notified

capacity, due to the seasonal factors of wind which is further influenced by

grid availability and machine availability has only a lower CUF. This fact

was rightly admitted by the Respondent Commission itself. Hence, a

Transmission Charge which is applicable to a power plant which has an

inherent character of having 70-80 % CUF cannot be made applicable

directly to a WEG which is having only one fourth of the CUF. This means

that un-equals are treated as equals and therefore, it is bad in law. The

Transmission charge of Rs.6483 per MW per day is applicable only for a

firm power plant which has the capacity to run and generate the energy

throughout the year on a nonstop basis. But a WEG has its own natural

constraints and prone to wind availability which again is only a natural and

seasonal factor. For that reason only, wind power is called as infirm

power. Hence, the rate of Transmission charge prescribed for a firm power

plant cannot be applied directly as such for a power plant which is totally

infirm by all possibilities. Hence the impugned Order needs to be set aside

on this very score also.

15.10 It would be appropriate that as existed earlier, even assuming that

Transmission Charge has to be levied besides wheeling charge, it should

be levied only on the units transmitted and not based on the capacity of

the WEG. The Commission has forgot to consider the infirm nature of wind

power and erroneously taken the wind power also as confirmed power and

accordingly, taken the Transmission charge available for a power plant of

firm nature to the WEG of infirm nature. The 40% of Transmission charge

ordered for collection for WEGs is only on promotional measure as the

WEGs are generating power through NCES and therefore, that

concession is nothing to do with the taking of Transmission charge

squarely equivalent to that of a firm power plant.

15.11 In the matter of collection of above charges, from the earlier orders, the

present impugned Order differs only on one area and accordingly, it

Page 32: Correction Required Copy of Appeal

requires the collection of Transmission and Wheeling Charge in cash

instead of units which was in kind as per the earlier orders. Hence, when

the basis is not totally changed it has a change only from kind to cash. As

such any levy of charge should be based on the units generated and not

on capacity as a whole. When the WEG cannot produce energy based on

the capacity at any point of time, ordering to collect Transmission charge

based on capacity is totally void of the whole concept of wind power and

its nature as infirm power. Therefore, the Appellant prays that the Order to

collect Transmission Charge based on capacity should be modified in

such a way to collect the same based on the units transmitted. Therefore,

to that extent the Impugned Order needs to be set aside with a direction

for collection of transmission charges based on actual energy generated

and transmitted by the WEGs instead of their capacity being taken as

yardstick.

15.12. Further the rate of transmission charge sought to be levied in the present

impugned order is abnormal and unrealistic. It ought to have been fixed

based on the value of 5% of the units transmitted and not at such a

exorbitant rate as explained above.

16. Banking issues:

16.1 The Commission in its order, while discussing the Banking issue in the

paragraph 8.2.1 of the impugned Order, considered that the estoppels

cannot be invoked with regard to banking. This goes against the very spirit

and observations of the Hon'ble APTEL in Appeal No.53, 94 and 95 of

2010 to the extent extracted below.

“25. It is also to be pointed out that it is only because promises made by

the Government and the Electricity Board in respect of wind power

generation which included the concept of banking, the generators set up

the facilities by incurring heavy expenditure. Therefore, the Board is

estopped from making claims contrary to the said promises. The Electricity

Board is one of the pioneers in developing regime for wind energy. It has

introduced the concept of banking. It was on the basis of the said policy

initiative that substantial investments came to be made in the wind sector.

After permitting the same for more than 25 years, the Electricity Board

now is seeking to take such a different stand.

Page 33: Correction Required Copy of Appeal

26. Therefore, the Electricity Board cannot be allowed to deny the benefit

of banking which has been contractually and judicially recognized. The

tariff orders were also passed recognizing the same. The concept of

banking is contained in the tariff order applicable to wind energy

generators. This order has already been upheld by this Tribunal in Appeal

No.98 of 2010. Hence, the grounds of this Appeal have no basis.

27. (d) The concept of “banking” was evolved by the State Commission

which is in line with the provisions of the Act, 2003, National Electricity

Policy and the National Tariff Policy. Therefore, the impugned order

promotes the object of the Act/Rules and the purpose it serves. It would be

impossible to set-up the Wind Energy Units without the banking facilities

due to the very characteristics of wind power generation. It was only

because of the promises made by the Government and the Appellant in

respect of Wind Power Generation which included the concept of banking,

the wind generators set-up their facilities by incurring heavy expenditure.

Therefore, the Appellant is estopped from making claims contrary thereto.”

16.2 Hence, taking totally a contrary view over the views and observations

already expressed by the Hon'ble Tribunal is amounting to rewriting of the

Judgment ordered in the above case in Appeal No.53 of 2010 to the extent

explained above.

16.3 Further, it is discussed in the Impugned Order that the banking charges

were initially fixed as 2% in kind and line losses were fixed as 2% in kind

and increased to 5% during March 2002. This increase in banking charge

was discussed in the Impugned Order. It is to be noted that when the

utility wants to install the wind energy generators in Tamil Nadu, huge

investment was required to harness the wind potential in the State which

could not be made by the TNEB. Hence, various promotional measures

were announced to attract developers since 1992 onwards. During initial

days of wind energy generator installations, most of the generators are

connected in to the local net work (even most of the old generators are still

continuing in the same distribution net work) and hence lower line losses

were expected and fixed on lower side. Further, during the year 2000, the

average line losses for TNEB was around 15% only. By considering the

capacity utilization factor of the wind energy generator at around 24%, the

banking charges are fixed reasonably at 5%. Hence, it is to be noted that

the banking charges are fixed so far only at a reasonable rate based on

the line losses which were worked out with the proper logical conclusion to

facilitate both win-win situation for the distribution utility and the generator.

Page 34: Correction Required Copy of Appeal

Even if there is a grievance on the quantum of losses to the utility, the

same should have been agitated at that time itself. Having allowed to go

with 5% banking charge for years together and coming with a different

concept and explanation now may not help to justify the changes as made

in the Impugned Order.

16.4 Further, the Commission in its order has observed that the captive use of

wind energy has been on increase year after year. It is to be noted that

the Commission has not compared the captive consumption to the total

generation from wind sources. In the recent period, most of the

investments made in wind generation are through IPPs and REC route.

This statement is made based on the comparison on absolute terms

where the total capacity of the State is expected to grow at the rate 8 -

10% per annum. The captive use has been decreased year after year.

Even assuming for argument sake that there is an increase any

investment made on captive generation is a welcome measure, as it

happens to the green power segment and therefore, it should not to be

criticized.

16.5 The Commission in the order at paragraph No. 8.2.9 observed that the

banking of wind energy in other States is meager and it does not have

considerable impact on the finances of the distribution utilities whereas in

Tamil Nadu due to its high installed capacity, the impact is more. Further,

in the paragraph No. 8.2.12, it is stated that for reasonably compensating

the loss of the distribution licensee on account of banking of wind energy,

the Commission has examined different alternatives. It is to be noted that

the discussion about the loss to the distribution licensee has never been

made available public and is therefore, the whole statement is vogue.

Hence, without substantiating the same with facts and figures the

allegation of loss due to banking cannot be considered as a true

statement.

16.6 The TANGEDCO through CE/NCES has attempted to file MP No. 1 of

2012 for the removal of banking facility before the Commission. During

the course of admission of the petition itself, the Commission wanted to

have certain clarification in the petition and accordingly, directed the

TANGEDCO to modify the same. However the TANGEDCO has not

bothered to supply the details till today to the Commission and the matter

is still pending without admission. Based on the period furnished by

TANGEDCO in the said petition on the calculation of banked units, a

detailed working is given below to establish that there is only profit and not

Page 35: Correction Required Copy of Appeal

loss to TANGEDCO. With the present situation of huge power shortage

across the Country, the distribution licensee is forced to buy power from

outside throughout the year. With the average sale realization of Rs. 4.99

per unit as per the ARR filed and approved in the Retail Tariff Order No. 1

of 2012, the distribution licensee is not making any loss on account of

banking, but only gains.

Table – Gain Accrued by TANGEDCO on account of Banking

S.N

o.

Description In

Million

Units

Rate

Per Unit

Rs.

Rs.

Crores

I. TANGEDCO EXPENDITURE:

a) TANGEDCO – Purchase from November to

March for supply to wind mill banked users

676 5.62 380

b) TANGEDCO – Payment for the lapsed units

after March to WM owners

169 3.05 52

C) Total Expenses to TANGEDCO for 845

Million Units

845 431

II. TANGEDCO INCOME

d) TANGEDCO realization from consumers

from April to October by selling wind units

845 4.99 422

e) Realization through sale of 5% of banked

units

44 4.99 22

f) Total Income of TANGEDCO 889 444

h) Net Gain to TANGEDCO on account of

banking facility

13

The Commission has therefore, greatly erred in its observation in the last

line of para 8.2.11 of the Impugned Order to discuss the rate at which

energy will be banked and the rate at which energy will be redrawn from

the bank. When there is no rate for the energy to be banked, there arises

no question to compare the rate at which the energy will be redrawn from

the bank. Energy is banked only for redrawing. That banked energy is

sold at that moment to the consumers by the Utility in this case it is

TANGEDCO at an average realization cost of Rs.4.99 per unit as per

latest Commission’s order.

16.7 Therefore the Commission has committed a serious error in its observation

“for reasonably compensating the loss to Distribution Licensee”. This

Page 36: Correction Required Copy of Appeal

statement is devoid of any merit and made without going through the

calculation based on the petition filed by TANGEDCO. While examining the

different options, the Commission has bench marked the rate specified in

the market monitoring report published by the CERC. The Commission

stated that it had examined the details available for the period from April

2010 to March 2012 for the sake of better approximation of traded prices. It

is evident from the details of the prices referred that the average traded

price for the year 2010 -11 is Rs. 4.74 per unit and Rs. 4.23 per unit for the

year 2011 -12. Further, it is to be noted that the average price per unit is

more in the months of April and May of the years which is no way connected

with the redrawn of wind energy banked units. When the banking period

begins with April of every year and the wind season starts with the month of

May, these two months will neither have any banked units to redraw nor

would sufficient generation be there for banking. Hence, the average rate

bench marked for power purchase rate of banked unit redrawn has no

justification in any manner.

16.8 Further, the Commission has considered that the maximum preferential tariff

for wind energy as contained in the Impugned order as the bench marked

rate for the wind energy banked with the utility. The Commission has failed

to understand that the captive wind energy generators have not made their

investment to supply their generation to the distribution licensee. They are

not for selling the energy, but they bank the energy for re-drawl. There is no

rate for units to be banked. TANGEDCO realizes for these banked units at

a price of Rs.4.99. All the captive investments are made to secure their

energy requirement for future and fixing the rate of preferential tariff as the

bench mark for the rate for the banked units is not justifiable in any course

of law. It indirectly forces the captive consumers to go out of captive

consumption. It would be proper to consider the average sale realization of

the utility which is the actual income to the utility by selling the energy so

generated and banked by the captive consumers at the time of wind

season. It is to be noted that the average sale realization for the year 2012

-13 for the utility is Rs. 4.99 per unit as per Tariff Order No. 1 of 2012 dated

31.03.2012. When the energy generated is sold and realized at the rate of

Rs. 4.99 per unit with the average purchase rate of Rs. 4.45 as per the so

called bench mark rate less than the sale realization rate, the discussion

made in the Impugned Order on the losses to the utility due to banking does

not arise at all. The Commission has seriously erred in calculating the

maximum preferential tariff as the rate on wind energy banked for the

captive consumers and the conclusion made in terms of losses to utility due

to banking is totally wrong and unsustainable.

Page 37: Correction Required Copy of Appeal

16.9 In the nut shell, the following are the issues; The system of banking is no

more a facility for windmill captive consumers and according to the words of

this Hon'ble Tribunal it is a system contractually and judicially recognized.

However, in spite of the same, the Commission considers that estoppels

cannot be invoked. This statement is therefore, contrary to the findings of

the Hon'ble Tribunal.

16.10 Hence accepting the above observation of the Hon'ble Tribunal, the

Commission should come forward to continue the banking charges at 5% of

the energy banked either in kind or in cash. The Commission in the

Impugned Order has observed that the wind energy for captive use has

been on the increase year after year. The Commission did not justify the

statement with relevant statistics. The Commission has failed to appreciate

the wind turbine erection and captive consumption at various periods. The

percentage of captive consumption in total generation would be the relevant

factor to consider this aspect.

16.11 The Commission has compared two incomparable parameters in fixing the

banking charges. On one hand, the Commission has considered the CERC

market monitoring report for the year 2010 to 2012 and fixed as the power

purchase cost as Rs.4.45 per unit. But at the same time, the Commission

has considered the maximum wind tariff fixed under this order at Rs. 3.51

per unit. In fact, as per the Tariff Order dated 31.03.2012, the average cost

of realization was fixed by the Commission as Rs.4.99 per unit. The

Commission has reckoned the difference between Rs.4.99 and Rs.3.51 to

fix the banking charge in cash. There is no justification as loss when it

compared the power purchase cost and realization cost. This is an

apparent error in comparing two different incomparable parameters. The

energy cost realized by TANGEDCO during the banking period is to be

compared with the energy purchase cost when banked energy is redrawn.

This is the comparable parameter. Therefore, the conclusion of the

Commission that there is a loss to distribution licensee is a mistake of facts.

16.12 The Commission under paragraph 8.2.12 has come to the conclusion that

the distribution licensee is incurring the loss on account of banked wind

energy and that is to be compensated. The Commission did not justify

this conclusion with any statistics or figures and therefore, the findings of

the are not supported by documentary proof. The Commission is simply

carried away only by the letter of the TANGEDCO dated 02.06.2012 and

the letter of the Principal Secretary to Government, Energy Department

Page 38: Correction Required Copy of Appeal

dated 28.03.12 which were also not found with documentary proofs. As a

matter of fact, there is only gain and not loss. Therefore, the Appellant

submits that if the Commission wants to order to collect the banking

charge in cash, it should be at the rate of 28.46 paise per unit of energy

banked and redrawn and not at the present system of compensating.

Hence it is prayed that the banking charges should be fixed at 28.46 paise

per unit of energy when banked and redrawn.

17. WEG availing REC

The Commission in its order at Paragraph No. 8.2.15 decided that with

respect to WEGs availing REC, one month adjustment period is allowed

as permitted for conventional power. The unutilized energy will get lapsed

as in the case of conventional power. The Commission is totally wrong

on deciding that the units at the end of every month for the captive wind

energy generators availing REC would get lapsed as in the case of

conventional power. It would be worth to note that there are number of

generators already wheeling the captive generation with the condition of

“Wheeling and surplus units as sale to board” category. This refers, the

generated units are adjusted for their consumption and remaining units

are considered as sale to utility and applicable tariff is paid to them. By

choosing the REC route, the captive generators are not to be denied with

the benefit of atleast treating the surplus units as sale to Utility since none

of the units generated is going to be wasted. It is only consumed through

the utility by other consumers as generation and consumption takes place

simultaneously and the Utility is also realizing money for such

consumption from other consumers. Hence, the concept of lapsing the

unutilized units for the captive consumers at the end of every month under

REC route is not correct and fair. It also amounts to unjust enrichment at

the cost of the REC captive consumers which is unsustainable in law.

Therefore, for surplus unit at the end of each month should be treated as

sold to Board and accordingly they should be allowed to get atleast the

APPC cost fixed by Commission from time to time. Therefore, the present

portion of the impugned order in para 8.2.15 in so far lapsing of the

unutilized units for REC captive consumers should be set aside and

direction may be issued to encash the same atleast for the APPC cost.

18. Grid availability Charges – Energy Charges

The Commission in the Impugned Order at Paragraph No. 8.7.2.1 has

stated that “if the captive user / third party user is not a consumer of the

Page 39: Correction Required Copy of Appeal

distribution licensee, the user shall pay the charges as applicable to the

temporary supply of that voltage category”. It is to be noted that all the

users should become a consumer of the distribution licensee of their

region without which they will not be able to avail the open access with

any generator. Hence, the specified condition is not realistic and

therefore, it may not happen at all and hence, it liable to be set aside.

19.Demand Charges

The Commission in this order stated that the TANGEDCO has opposed to

continue the deemed demand concept which was originally introduced by

the Commission in 2006 and continued in 2009 stating that they are

unable to recover the full demand charges relating to providing all the

infrastructural facilities as well as tying up of the generation capacity. The

Commission has examined and observed as follows in the Impugned

Order that:

a. When the captive power plant is not generating power, the licensee is

obligated to provide power supply to the captive consumer. During this

period no wheeling charges is recoverable as the captive generators is not

injecting any power. The fixed charges payable to other generating

stations or procurement of power from the market to meet such

contingency will devolve on the licensee.

b. If the captive generator is generating throughout the year, he could always

reduce the sanctioned demand and control his demand charges for the

supply to be made by the licensee.

c. Since the open access regulation cast a duty on the licensee to provide

electricity to all open access customers whether captive or otherwise, the

fixed charge is getting shifted to the licensee.

19.1 In this context, it is worthwhile to look in to the tariff pattern of the

consumers. HT consumers are charged with two part tariff: The first part

is Energy charges based on the units actually consumed by them and

second part is Demand charges based on their Maximum demand

reached or 90% of the sanctioned demand whichever is higher.

19.2 After enactment of the Electricity Act 2003, all the distribution and

transmission companies are filing their ARR to the respective State

Commission and getting them approved. While doing so, the financial cost

of capital asset (Infrastructure) like depreciation, interest on debt, RoE,

O & M, etc. are considered for arriving at the average cost of supply. In

Page 40: Correction Required Copy of Appeal

the case of energy supplied by the distribution companies, these

expenses are added to the cost of generation/energy purchased so as to

arrive the cost of supply. Similarly, wheeling charges are arrived by

considering all these financial costs for the distribution network. Hence,

the view of the TANGEDCO stating that the demand charges are collected

to provide the infrastructural facilities has no relevance in the present

scenario and is nothing but an attempt to totally mislead all. Therefore,

any separate charge collected for providing infrastructure facilities will

amount to double collection. The Commission in its Tariff Order No. 1 of

2012 calculated the average cost of realization at Rs.4.99 per unit. From

HT consumers, the tariff rate is more than Rs.4.99 per unit which includes

energy charges plus demand charges. The excess amount so collected is

only a cross subsidy component. The average cost of realization is

Rs.4.99 per unit which includes all cost i.e. Generation/Purchase cost plus

financial cost for transmission (transmission charges) and distribution

(wheeling charges). Therefore it is evident that the tariff includes all costs

including wheeling charges also. An open access consumer getting

access to the distribution network pays either tariff which is inclusive of

wheeling charges or more wheeling charges as open access charge. The

distribution network used by the consumer realizes its wheeling charge

either by tariff to the distribution licensee or by recovering wheeling

charges by open access transaction. At no point of time, there is no

stranded cost for distribution asset. The observation of the Commission in

sub para (a) of para 8.7 2.2.2 that no wheeling charge is recoverable as

the captive generator is not injecting any power is a mistake of fact and

error apparent on the very face of the record. It is to be noted that the

demand charges are made to maintain the grid stability and also to control

the grid by the distribution / transmission utility only. These charges

become the part of the consumption charges only so that the average cost

of supply is met by the distribution company.

19.3 Hence, the demand charges are being collected only in respect of erection

and maintenance of sub-stations. The Impugned Order of the

Commission clearly indicates that the cost of supply includes generation,

transmission and all other expenses including the development of

infrastructure. Hence, there won’t be any need of collecting separate

demand charges. However, when the Electricity Act 2003 was introduced

and separate companies are formed for transmission and distribution,

each company is filing ARR and took the approval of the Commission.

Accordingly, the transmission company is charging transmission charges

separately and collecting the same. If that be the position there should not

Page 41: Correction Required Copy of Appeal

be any demand charges. However, during the past two orders, the

Commission came to the conclusion that the wind energy is bringing

energy in to the grid and based on the average PLF, it ordered that the

wind power also carried some demand on its generation. Now, the

present order removing the deemed demand has no justification. In fact,

the Commission in paragraph 6.1.5 confirmed that wind energy

contributes around 30% in terms of demand share during the peak wind

season. If that be the case, instead of continuing to provide deemed

demand charges, the Commission ordered for withdrawal of deemed

demand concept which is totally unfair.

19.4 When energy is injected in to a grid, automatically demand is also deemed

to be injected, as energy and demand are two sides of the same coin. A

quantum of energy injected would result in a quantum of MD and this

concept has been fully accepted and orders have been made to allow

deemed demand for the wind energy captive consumers in Order No.3 of

2006 dated 15.05.2006 and 1 of 2009 dated 20.03.2009. The last order

dated 20.03.2009 is extracted below for the sake of convenience.

“8.7.4 Demand charges

8.7.4.1. In the case of a wind energy generator, there are two components

of demand, namely, the demand supplied by the distribution licensee and

the demand supplied by the wind energy generator. In regard to the

former, the licensee is entitled to recover demand charges in terms of the

Tariff Order of the Commission dated 15-3-2003. The demand supplied by

the generator is estimated by the Commission in the following manner.

8.7.4.2. Assuming a capacity utilization figure of 27.15% and assuming

that an average 65% of wind energy generated, (as per the data available

with the Commission) is used for captive / third party consumption and

assuming an average power factor of 0.9, the Commission arrives at a

figure of 19.61% as the demand contributed by the generator. The energy

supplied in each month by the wind energy generator shall be converted

to an appropriate demand in KVA and the demand charges at 80.39% of

the rates prescribed in the Tariff Order is payable by the wind energy

generator in regard to that converted demand.

8.7.4.3. The example below illustrates the case. The demand charges

payable by the consumer on open access will be calculated as below:

Page 42: Correction Required Copy of Appeal

Total generated units consumed by the consumer on open access

divided by (30 x 24 x actual PF recorded during the billing month) A

Recorded demand (or) 90% of sanctioned demand, whichever is higher B

The demand supplied by the Licensee (B – A) C

The demand charges payable by consumer on open access = [A x

(80.39%) of applicable demand charges + (C x applicable demand

charges)]

At current rate Demand Charges payable (Rs.)= [ (A x 0.8039 x 300) + (C

x 300)]

8.7.4.4. The TNEB has suggested that deemed demand concept may be

abandoned since the demand charges are meant to recover the fixed

charges incurred by the Board for creating the required assets. It needs to

be clarified here that the cost of the asset created by the TNEB including

the transmission and distribution lines are fully recovered in terms of the

Tariff Order of the Commission. The shortfall in tariff revenue on account

of the demand contributed by wind energy generators can be factored into

the Annual Revenue Requirement of the TNEB and accounted for in the

subsequent tariff revision as prescribed in the Electricity Act 2003 and the

Tariff Regulations 2005 of the Commission. On the other hand, the wind

energy generators have represented that the distribution licensee should

recover demand charges only for the net energy supplied by them. The

Commission rejects this proposition because the licensee is obliged at all

times to supply the committed demand to the consumer despite wide

ranging fluctuations in the availability of wind energy.”

19.5 With the above discussion as made in the earlier order, the Commission

has justified in allowing the deemed demand benefit to all the wind energy

captive consumers by assigning a formula. Hence, if we look in to the

Commission’s views made at that time it would be evident that the

allowing of deemed demand is fair. But however, without analyzing all the

above aspects, the Commission this time in issuing the Impugned Order

has taken a unilateral view and accordingly, ordered to withdraw the

deemed demand benefit for all wind energy captive consumers which is

arbitrary, unfair and therefore, requires to be set aside totally.

Page 43: Correction Required Copy of Appeal

19.6 The Commission has seriously erred in coming in to the conclusion that

the captive generator generating throughout the year could reduce the

sanctioned demand and control their demand charges.

For example;

The sanctioned demand of the consumer is 1000 KVA

The consumer is consuming with the 80%

load factor for one hour 800 units

Assuming that he is availing open access

and receiving energy per hour 560 units

He is availing energy per hour from the

distribution Licensee 240 units

Will it be possible to reduce his sanctioned demand to 300 KVA to avail

240 units from the licensee?

Since, he needs 800 units, he has to retain the sanctioned demand only at

1000 KVA.

Otherwise, he is liable to pay excess demand charges if sanctioned

demand is reduced to 300 KVA.

Hence, it is not correct to state that there is a possibility to reduce the

sanctioned demand when the captive generator generating throughout the

year.

19.7 The last observation of the Commission in the Impugned Order is totally

wrong and untenable. The Commission observes in the Impugned Order

that since the open access regulations cast a duty on the licensee to

provide power to all open access consumers whether captive or

otherwise, the fixed charges get shifted to the licensee. This observation is

totally wrong. The tariff order for retail energy already covers the average

cost of realization by way of charging on energy and the transmission

company charging on the transmission of energy. Hence, there could not

be any more shifting of fixed charges on the licensee to recover further on

demand charges. Then it amounts to double charging.

19.8 When the Commission itself has justified in the introduction of deemed

demand concept based on certain principles in its Order dated 15.05.2006

which was again continued by Order dated 20.03.2009, the Commission

Page 44: Correction Required Copy of Appeal

should not have taken totally a contrary decision based on certain grounds

which are totally unrealistic and unacceptable. As the retail tariff covers all

expenses and nothing is left over, there could not be any further fixation of

demand charges. Hence, the Commission was not justified in withdrawing

the deemed demand charges for the wind energy injected in to the grid.

19.9 Hence, the Impugned Order of the Commission in para 8.7.2.2 in so far as

it relates to withdrawal of deemed demand benefit for WEGs is liable to be

set aside and there should be a direction to continue the benefit of

deemed demand for all WEGs as available at present.

20 Scheduling and System Operation Charges

The Commission in Para 8.9 of the Impugned Order has fixed the

Scheduling and System Operation Charge at Rs.600 per 2 MW per day and

proportionately in accordance with the actual capacities. It is submitted that it

is well known fact that wind energy being an infirm power, could not be

scheduled at the present conditions. When the power itself could not be

scheduled due to the very infirm nature of the wind power, order to collect

the Scheduling and System Operation Charges would not be realistic and

reasonable. The Commission has greatly erred in the matter of fixing the

Scheduling and System Operation Charges which is not realistic to a power

which could not be scheduled at the present point of time. Hence, this

unrealistic charge of Scheduling and System Operation Charge should be

set aside totally.

21 Grounds raised with legal provisions

As in Para 8, 9 and 10

22. Matters not previously filed or pending with any other Court

The Appellant further declares that the Appellant had not previously filed

any writ petition or suit regarding the matter in respect of which this appeal

is preferred before any Court or any other authority nor any such writ

petition or suit is pending before any of them.

23. Specify below explaining the grounds for such relief (s) and the legal

provisions, if any, relied upon.

As set out in Paras 8 to 20 above.

Page 45: Correction Required Copy of Appeal

24. Details of Interim Application, if any, preferred along with Appeal.

(i) The Impugned Order No.6 of 2012 dated 31.07.2012 vide para 9.2

makes the order applicable to all WEGs irrespective of the date of

commissioning. However, the Regulation No.6 of the TNERC-Power

Procurement from New and Renewable Sources of Energy

Regulations, 2008 makes it clear that when the Commission revisits

the tariff and allied issues, the revision shall be applicable only to the

Generator of New and Renewable energy sources commissioned after

the date of such revised order. Therefore, the impugned order is

totally inconsistent and contrary to the provisions as contained in

Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Therefore, it is just, reasonable

and necessary that this Hon'ble Appellate Tribunal may be pleased to

pass an Order of INTERIM STAY of operation and further proceedings

of the impugned Order No.6 of 2012 dated 31.07.2012 in so far as the

members of the petitioner Association are concerned in respect of their

WEGs having commissioning dates prior to the impugned order

pending disposal of the above Appeal and thus render justice.

(ii) Further, it is respectfully prayed that this Hon’ble Appellate Tribunal

may be pleased to pass an order of INTERIM INJUNCTION,

restraining the 2nd and 3rd Respondents, their men, agents,

representatives and sub-ordinates from demanding, collecting banking

charges(para 8.2), transmission charges, wheeling charges and line

loss charges(para 8.3), grid availability charge(8.7) and Scheduling

and system operation charges(para 8.9) in so far as the members of

the Petitioner Association are concerned pending disposal of the

above Appeal and thus render justice.

(iii) Further, it is respectfully prayed that this Hon’ble Appellate Tribunal

may be pleased to pass an order of INTERIM DIRECTION, directing

the 2nd and 3rd Respondents, their men, agents, representatives and

sub-ordinates to extend the deemed demand facility as usual as per

the existing Energy Wheeling Agreements in so far as the members of

the Petitioner Association are concerned pending disposal of the

above Appeal and thus render justice.

(iv) It is further submitted that unless this Hon’ble Appellate Tribunal is

pleased to pass the above interim orders, great irreparable prejudice

Page 46: Correction Required Copy of Appeal

and heavy financial loss would be caused to the members of the

Petitioner Association who are already reeling under severe power

cuts and recession. On other hand, by passing such interims orders

as prayed for above, no prejudice would be caused to 2nd and 3rd

Respondents since they would be collecting all the usual charges as

agreed in the Energy Wheeling Agreement in force in compliance of

the earlier tariff orders passed by the 1st Respondent on 15.05.2006

and 20.03.2009.

25. Details of appeal/s, if any preferred before this Appellate Tribunal

against the same impugned order/direction, by Respondents with

numbers, dates and interim order, if any passed in that appeal (if

known).

No other appeal is filed against the same Impugned Order.

26. Details of Index

INDEX

Sl.No. Date Particulars Page

I Synopsis and List of Dates and

Events

II Appeal with Affidavit

III Application for Interim Stay with

Affidavit

IV List of Enclosures

1. 08.02.2008 TNERC-Power procurement from

New and Renewable Sources of

Energy Regulations, 2008

2. 08.04.2011 Tariff Order No.1 of 2011 of 1st

Respondent

3. 08.09.2011 Public Notice of 1st Respondent

4. 29.09.2011 Comments filed by the Appellant in

pursuance of the Public Notice

5. 15.12.2011 Tariff Order No.4 of 2011 of 1st

Respondent

6. 24.05.2012 Notice fixing the Stakeholder’s

Hearing on 8th June 2012

7. 04.06.2012 Letter of the 1st Respondent

Page 47: Correction Required Copy of Appeal

Commission sent to the Appellant

intimating no Consultative Paper

would be released

8. 08.06.2012 Written Submission filed during the

Stakeholder’s Hearing on

08.06.2012 by the Appellant

9. 30.06.2012 Order No.3 of 2012 of the 1st

Respondent

10. 31.07.2012 The Impugned Order of the 1st

Respondent Tamilnadu Regulatory

Commission in T.R.No.6 of 2012

11. . 08.2012 Working Instruction issued by the

2nd Respondent TANGEDCO

12. 30.08.2012 Memo of 2nd Respondent providing

instructions to withdraw deemed

demand concept

13. 24.09.2012 Demands raised by the SEs of 2nd

Respondent based on the working

instruction

V Vakalathnama

27. Particulars of fee payable and details of bank draft in favour of Pay

and Accounts Officer, Ministry of Power, New Delhi in respect of the

fee for appeal.

Name of the Bank _________________

Branch ________

DD No. _________ Dated. ______ payable at New Delhi.

28. List of enclosures:

INDEX

Sl.No. Date Particulars Page

I Synopsis and List of Dates and

Events

II Appeal with Affidavit

III Application for Interim Stay with

Affidavit

IV List of Enclosures

1. 08.02.2008 TNERC-Power procurement from

New and Renewable Sources of

Page 48: Correction Required Copy of Appeal

Energy Regulations, 2008

2. 08.04.2011 Tariff Order No.1 of 2011 of 1st

Respondent

3. 08.09.2011 Public Notice of 1st Respondent

4. 29.09.2011 Comments filed by the Appellant in

pursuance of the Public Notice

5. 15.12.2011 Tariff Order No.4 of 2011 of 1st

Respondent

6. 24.05.2012 Notice fixing the Stakeholder’s

Hearing on 8th June 2012

7. 04.06.2012 Letter of the 1st Respondent

Commission sent to the Appellant

intimating no Consultative Paper

would be released

8. 08.06.2012 Written Submission filed during the

Stakeholder’s Hearing on

08.06.2012 by the Appellant

9. 30.06.2012 Order No.3 of 2012 of the 1st

Respondent

10. 31.07.2012 The Impugned Order of the 1st

Respondent Tamilnadu Regulatory

Commission in T.R.No.6 of 2012

11. . 08.2012 Working Instruction issued by the

2nd Respondent TANGEDCO

12. 30.08.2012 Memo of 2nd Respondent providing

instructions to withdraw deemed

demand concept

13. 24.09.2012 Model Demand raised by the SE of

2nd Respondent based on the

working instruction

V Vakalathnama

29. Whether the order appealed as communicated in original is filed? If

not, explain the reason for not filing the same.

The Order appealed as communicated in original is filed herewith.

30. Whether the appellant/s is ready to file written submissions/

arguments before the first hearing after serving the copy of the same

on Respondents.

Page 49: Correction Required Copy of Appeal

Yes

31. Whether the copy of memorandum of appeal with all enclosures has

been forwarded to all respondents and all interested parties, if so,

enclose postal receipt/courier receipt in addition to payment of

prescribed process fee.

Yes

32. Any other relevant or material particulars/details which the Appellant

deems necessary to set out:

Nil

33. Relief (s) Sought

INTERIM PRAYERS:

For the reasons stated above, it is prayed that this Hon'ble Appellate

Tribunal may be pleased to pass an Order of INTERIM STAY of operation

and all further proceedings of the impugned Order No.6 of 2012 dated

31.07.2012 issued by the 1st Respondent in so far as para 8.2, 8.3, 8.7

and 8.9 relating to banking charges, transmission, wheeling and

transmission loss compensation charges and grid availability charges and

Scheduling and system operation charges respectively and para 8.7.2.2

relating to withdrawal of deemed demand benefits in so far as the

members of the petitioner Association are concerned in respect of their

WEGs having commissioning dates prior to the impugned order pending

disposal of the above Appeal and thus render justice.

For the reasons stated above, it is prayed that this Hon’ble Appellate

Tribunal may be pleased to pass an order of INTERIM INJUNCTION,

restraining the 2nd and 3rd Respondents, their men, agents, representatives

and sub-ordinates from demanding and collecting banking charges(para

8.2), transmission charges, wheeling charges and line loss charges(para

8.3), grid availability charges(8.7) and Scheduling and system operation

charges(para 8.9) in so far as the members of the Petitioner Association

are concerned pending disposal of the above Appeal and thus render

justice.

Page 50: Correction Required Copy of Appeal

For the reasons stated above, it is prayed that this Hon’ble Appellate

Tribunal may be pleased to pass an order of INTERIM DIRECTION,

directing the 2nd and 3rd Respondents, their men, agents, representatives

and sub-ordinates to extend the deemed demand facility as usual as per

the existing Energy Wheeling Agreements in so far as the members of the

Petitioner Association are concerned pending disposal of the above

Appeal and thus render justice.

MAIN RELIEF:

For the reasons stated above, it is prayed that this Hon’ble Appellate

Tribunal for Electricity may be pleased to call for the records of the 1st

Respondent Commission in its Order No.6 of 2012 dated 31.07.2012 in so

far as paras 8.2, 8.3, 8.7, 8.9 and 8.7.2.2 relating to banking charges,

transmission, wheeling and transmission loss compensation charges, grid

availability charges and Scheduling and system operation charges and

withdrawal of deemed demand benefit respectively, quash the same as

illegal, arbitrary, unsustainable in law and against the Regulation 6 of

TNERC Power procurement from New and Renewable Sources of Energy

Regulations, 2008 and pass such other order or orders as this Hon’ble

Appellate Tribunal for Electricity may deem fit and proper in the

circumstances of the case in so far as the members of the Petitioner

Association are concerned and thus render justice.

DATED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPELLANT APPELLANT

DECLARATION BY APPELLANT

The Appellant above named hereby solemnly declares that nothing

material has been concealed or suppressed and further declares that the

enclosures and typed set of material papers relied upon and filed herewith are

true copies of the originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPELLANT APPELLANT

Page 51: Correction Required Copy of Appeal

VERIFICATION

I, Dr.K.Venkatachalam, S/o.A.Karuppaih, Hindu aged 60 years

representing the Appellant – Tamil Nadu Spinning Mills Association as its Chief

Advisor and resident of Tamil Nadu do hereby verify that the contents of the

paras 1 to 21 are true to my personal knowledge/ derived from official record and

are believed to be true on legal advice and that I have not suppressed any

material facts.

DATE : 13-09-2012

PLACE :DELHI SIGNATURE OF THE APPELLANT

Page 52: Correction Required Copy of Appeal

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

APPELLATE JURISDICTION

APPEAL No. _____ OF 2012

BETWEEN

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 00, Tamilnadu.

represented by Dr.K.Venkatachalam, its Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents

AFFIDAVIT FILED BY THE APPELLANT

I, Dr. K.Venkatachalam, son of A.Karuppaih, Hindu, aged 60 years,

residing at Sindhu Illam, M2/27, 4th Cross, R.M.Colony, Dindigul – 624 001 Tamil

Nadu do hereby solemnly affirm and sincerely state as follows :

Page 53: Correction Required Copy of Appeal

1. I am the Chief Advisor of the Appellant Association, viz., Tamil Nadu

Spinning Mills Association and I am duly authorized by the said Appellant to

swear this Affidavit on its behalf. I have been dealing with these matters relating

to the above mentioned case and I am conversant with the facts of the case.

2. I have read the accompanying Appeal filed against the Impugned Order

dated 31.07.2012 in T.R.No.6 of 2012 passed by the Tamilnadu Electricity

Regulatory Commission and I say that the facts stated therein in paras 1 to 33

are based on the records of the Appellant maintained in the ordinary course of its

business and believed by me to be true.

APPELLANT

VERIFICATION

I, the Deponent above named do hereby verify that the contents or my

above Affidavit are true to my knowledge, no part of it is false and nothing

material has been concealed therefrom.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPELLANT

Page 54: Correction Required Copy of Appeal

FORM III

(See Rule 20)

INTERLOCUTORY APPLICATION

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

represented by Dr.K.Venkatachalam, its Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

represented by its Chairman and Managing Director,

144, Anna Salai,

CHENNAI – 600 002.

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

Page 55: Correction Required Copy of Appeal

PETITION FOR INTERIM STAY

The Applicant above named states as follows :

1. Set out the relief (s)

Pending final decision of the Appeal, the Applicant seeks the issuance of

the following Interim Stay :

For the reasons stated above, it is prayed that this Hon'ble Appellate

Tribunal may be pleased to pass an Order of INTERIM STAY of operation

and all further proceedings of the impugned Order No.6 of 2012 dated

31.07.2012 issued by the 1st Respondent in so far as para 8.2, 8.3, 8.7

and 8.9 relating to banking charges, transmission, wheeling and

transmission loss compensation charges and grid availability charges and

Scheduling and system operation charges respectively and para 8.7.2.2

relating to withdrawal of deemed demand benefits in so far as the

members of the petitioner Association are concerned in respect of their

WEGs having commissioning dates prior to the impugned order pending

disposal of the above Appeal and thus render justice.

2. Brief facts

A. The Applicant/Appellant is an Association of yarn spinning mills which

are HT electricity consumers in the State of Tamil Nadu. The Applicant

had earlier filed Petitions before various fora on issues relating to the

rights of its members in the Electricity Sector.

B. The First Respondent is the Tamil Nadu Electricity Regulatory

Commission and the second Respondent is Tamilnadu Generation and

Distribution Corporation Ltd and the Third Respondent is Tamil Nadu

Transmission Corporation Ltd

3. Basis on which Interim stay prayed for

3.1The Impugned Order in Para 9.2 makes it mandatory that all WEGs

irrespective of the commissioning dates should be brought under the

Impugned Order and accordingly, all costs have to be paid as per the

Impugned Order. But whereas, according to Regulation 6 of TNERC-

Power procurement from New and Renewable Sources of Energy

Page 56: Correction Required Copy of Appeal

Regulations, 2008, any Order of the Commission would bind the WEGs

commissioned only after the date of the said Order and therefore, the

attempt of the Impugned Order to make it applicable for all WEGs having

the commissioning date prior to the date of Impugned Order is an arbitrary

exercise of power and therefore, it is against law.

3.2 The appellants submits that after coming in to force of the Impugned

Order, there are four categories of WEGs now functioning in the State of

Tamilnadu and each are governed by a separate practice and Order and

accordingly, with separate Power Purchase Agreement or Energy

Wheeling Agreement as the case may be depending up on the date of

commissioning of the WEG.

3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA

(Power Purchase Agreement) and not interfered by the Commission’s

Order dated 15.05.2006 on wind energy in any manner. These WEGs

however, have the option to renegotiate and can come to the benefits of

the Commission’s Tariff Order on Wind Energy dated 15.05.2006 by

renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA

(Energy Wheeling Agreement) as the case may be. In order to make

applicable the Order dated 15.05.2006 of the Commission, there was a

specific provision made available in the Order itself to accommodate the

option of renegotiation under Clause 4. Further, they have the option to

continue with the existing arrangement under PPA Scheme itself if they

are not willing for a renegotiation and as such, if they are not willing, they

can continue in the old scheme itself without renegotiation towards the

EPA/EWA Scheme.

3.4 Same is the case when the next Tariff Order No.1 of 2009 dated

20.03.2009 came in to force from 19.09.2008 onwards. Accordingly,

except for the purpose of Tariff for all other terms and conditions,

renegotiation scope was provided for re-entering in to new EWA in Clause

4 of the Order dated 20.03.2009.

3.5 However, in the present impugned Order, the Respondent Commission

has issued orders totally contradicting the existing schemes by which an

existing WEG can either opt for the new scheme or to continue with the

old scheme which was under the sole option of the WEG owner. Even

though such a scheme has to be provided under the concept of

promissory estoppels and legitimate expectation, the Respondent

Commission has greatly erred in this matter and accordingly, no such

Page 57: Correction Required Copy of Appeal

option was made available in the Impugned Order. Besides to the same,

the Impugned Order is having confusing contents in Para 4 and Para 9.2.

totally contradicting with each other.

3.6 Para 4 of the Impugned Order says as follows:

“Since changes are made in various provisions of the previous Order,

the Commission considers it appropriate to give effect to all of the

provisions contained in this Tariff Order only prospectively. This Order,

therefore, shall come in to effect from 01.08.2012.”

But whereas Para 9.2 of the Impugned Order says as follows:

“Other related charges and terms and conditions specified in the Order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning”

The impugned Order therefore, mandates heavy costs on captive

consumption of wind energy with effect from 01.08.2012 and however,

the EWA already in force is not in support of the said costs to be

collectable from the executants of the EWA. Hence, any WEG owner

could opt to continue to be in the old agreement and therefore, there is

no mandatory necessity to switch over to the new system from

01.08.2012 onwards. This liberty was provided in both the earlier

orders and however, only in the Impugned Order, it has been fully

wiped out. For no reason, the existing WEG owner could be

compelled to go for the new Order which costs him heavily on various

areas and therefore, such a compulsion is against the principles of

natural justice.

3.7 Each WEG is covered by a separate Energy Wheeling Agreement and as

new charges are likely to be levied in place of old charges as per the

impugned Order, the existing WEG owners may not opt to come for the

new Order and they may like to continue to remain in the existing EWA

itself without altering their status. Based on the terms and conditions

prevailed during the time of taking investment decisions, the WEG owners

has come forward for going to the wind power. It is not therefore fair to

drive them to a new set of costs which were not even thought of, when the

investment decision was originally taken. Now asking them for a sweep

change is not fair and reasonable on the principles of promissory

Page 58: Correction Required Copy of Appeal

estoppels and legitimate expectation. All investments prior to 31.07.2012

(ie) before the issuance of the impugned Order have happened only

based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of

2009 dated 20.03.2009. Now without any rhyme or reason, to ask them

also to come for the new Order with high costs is against the principles of

the natural Justice, promissory estoppels and legitimate expectation.

3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has

made as follows:

……… This order contains many provisions not only relating to tariff but

also relating to other terms and conditions. Since charges are made in

various provisions of the previous order, the Commission considers it

appropriate to give effect to all the provisions contained in this tariff Order

only prospectively. This Order, therefore, shall come into effect from

01.08.2012.

But, very much contrary to its own Order in Para No.4, in Para No.9.2 the

1st Respondent Commission has made it as follows.

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

3.9 Hence, from the contradictory statements of the 1st Respondent

Commission, the 2nd Respondent TANGEDCO has given working

instructions to make applicable all the new charges and all other new

terms and conditions to all WEGs who are totally controlled by a different

Energy Wheeling Agreement and accordingly, the 2nd Respondent has

started raising bills for new charges even though there is no provision in

the Energy Wheeling Agreement to claim such charges. The existing

benefits like deemed demand charges were totally withdrawn even without

a notice. Hence, due to the erroneous and anomalous nature of the

impugned Order of the 1st Respondent, all WEG owners/members of the

Appellant are put in too much of financial difficulty and hardship leading to

irreparable loss during every month from 01.08.2012 onwards.

3.10 Further, under the TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008, under Regulation 6, it has been

made as follows:

6. Agreement and Control period

Page 59: Correction Required Copy of Appeal

The tariff as determined by the Commission by a general or

specific order for the purchase of power from each type of

renewable source by the distribution licensee as referred to in

clause 4(3) shall remain in force for such period as specified by the

Commission in such tariff orders. The control period may ordinarily be

two years. When the Commission revisits the tariff and allied issues,

the revision shall be applicable only to the generator of new and

renewable energy sources commissioned after the date of such

revised order.

3.11 However, much contrary to the above Regulation, the Respondent

Commission in Para 9.2 of the Impugned Order, makes it mandatory the

contents of the Order totally applicable for all the WEGs irrespective of the

date of commissioning. The Regulation mandates that When the

Commission revisits the tariff and allied issues, the revision shall be

applicable only to the generator of new and renewable energy

sources commissioned after the date of such revised order. But much

contrary to the same in Para 9.2 of the Impugned Order the Respondent

Commission states as follows:

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

Hence, the Impugned Order is totally against the very letter and spirit of

the Regulation and on this score alone, the Impugned Order needs to be

set aside.

3.12 While the 1st Respondent Commission dealing with execution of Energy

Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has

made it as follows:

8.17. Energy Wheeling Agreement (EWA)

The format for Energy Wheeling Agreement (EWA) shall be evolved as

specified in the Commission’s regulation in force. The period of agreement

and other terms and conditions shall be as per the terms of open access

regulations in force issued by the Commission.

Page 60: Correction Required Copy of Appeal

Hence, even assuming that the Order is applicable for all WEGs

irrespective of the date of commissioning, in order to enforce the various

terms and conditions stipulated in the impugned Order, it requires an

Energy Wheeling Agreement and accordingly, after getting it signed by the

parties concerned only, this Order would be given effect and whereas the

2nd Respondent has not cared to proceed to get the EWA draft vetted and

approved by the Commission after following the due process of

stakeholders’ consultation. This again makes the working instructions

invalid as no new Energy Wheeling Agreement was executed and no text

of Energy Wheeling Agreement was circulated for providing opportunity for

the stakeholders in the matter of finalization of the text of new Energy

Wheeling Agreement.

3.13 The Appellant submits that each WEG has a specific commissioning date

and according to the date of commissioning, the said WEG is governed by

an Order of the Commission and therefore, unless the WEG owner opts

for renegotiation of the existing agreement, the new Order and the various

terms and conditions stipulated in the new Order cannot become

automatically enforceable with the WEGs commissioned before the date

of issuance of the Order in any manner. All the previous orders have very

specifically made this clause under the heading of “Applicability of the

Order” under Para 4 both in Order No. 3 dated 15.05.2006 and in Order

No.1 dated 20.03.2009. Such an arrangement is required and goes in

concurrence with the Regulation 6 of TNERC-Power procurement from

New and Renewable Sources of Energy Regulations, 2008 quoted supra.

For the sake of convenience of reference the said paragraph in Order

No.3 dated 15.05.2006 is reproduced below:

4.0 APPLICABILITY OF ORDER

This order shall come in to force from the date of its issue. This order shall

be applicable to all future and renewal of existing contracts/agreements for

the Non-Conventional Energy Sources (NCES) based Generating Plants

and Non-Conventional Energy Sources based Co-Generation Plants

located within the State of Tamilnadu. It should be noted that the existing

contracts and agreements between NCES based generators and the

distribution licensee signed prior to the date of issue of this order would

continue to remain in force. However, the NCES based generators and the

distribution licensees shall have the option to mutually re-negotiate the

existing agreements or contracts if any, in line with this order even before

the expiry of the existing agreements or contracts. Any renewal of the said

Page 61: Correction Required Copy of Appeal

contracts/agreements, new contracts/agreements shall be in line with this

order.

3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the

Commissioned has made as follows:

4. Applicability of this Order

Order No.3 dated 15.05.2006 of the Commission lays down a control

period of three years for that order and therefore, normally the next order

should have taken effect from 15.05.2009. The Commission in the

Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has

ruled that the control period of three years specified in order No.3 dated

15.05.2006 is waived from the date of issue of that Order. The control

period of three years, thus, stands terminated on 19.09.2008. Therefore,

the Commission holds that all the wind energy generators commissioned

on or after 19.09.2008 shall become eligible for the benefits of the present

order, subject to the condition that the monetary benefits shall accrue from

the date of this order. The existing agreements between the wind energy

generators and the distribution licensee shall continue to be valid. The

parties to the agreement are at liberty at any time to renegotiate the

existing agreement mutually in accordance with this order. The agreement

between the wind generators and the distribution licensee in relation to all

machines commission on or after 19.09.2008 shall be in conformity with

this order.

3.15 The above two orders of the Commission perfectly fit with the Principles of

natural Justice coupled with the theory of promissory estoppels and

legitimate expectation. Further, such a provision is also in line with the

Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Each WEG has come in to being by

a large capital investment. Hence, what set of terms and conditions are

applicable at the time of making investment would continue to be in force

till the WEG promoter opts to continue with it as the investment decision

has happened only with reference to the knowledge, information, rights

and responsibilities made available at the time of making investment

decisions. The members of the Appellant having altered their status based

on certain terms and conditions prevailed at a point of time when they

invested on wind energy, cannot now be unilaterally forced to come for

new terms and conditions. Then it becomes an arbitrary exercise and the

impugned Order could only be construed to have the effect of unilateral

Page 62: Correction Required Copy of Appeal

and arbitrary exercise of power. Further it is violative of the principles set

out under Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008.

3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement

(EWA) by each of the members of the Appellant executed, it has been

made as follows:

“11. Terms and Conditions agreement period:

(4) The agreement shall be valid for a minimum period of 5 years.

(5) The parties to the agreement shall be given the option to exit for

violation of the agreement after serving a notice of three months on the

other party.

(6) The parties to the agreement are at liberty at any time to renegotiate

the existing agreement mutually in accordance with the Commission’s

order in force.”

3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is

a liberty extended to parties that either they can renegotiate the existing

agreement for going to the new agreement as per the new orders if any or

they can continue to remain as such in the existing agreement itself. The

option is therefore, vested with the party concerned and therefore, no

party could be compelled or forced to accept any new terms and

conditions for which no agreement was signed earlier. This option made

available to the WEGs is totally wiped out in the impugned Order. The

impugned Order unilaterally forces all the WEG owners irrespective of the

date of commissioning to come for the new arrangement whereby heavy

costs are involved with large civil consequences.

3.18 Due to the implementation of the working instructions of the 2nd

Respondent based on the impugned Order of the 1st Respondent, every

member of the Appellant is losing heavy money every month due to

certain new charges as leviable due to the fresh terms and conditions of

the new Order with effect from 01.08.2012 onwards. All the members of

the Appellant are totally unaware of the terms and conditions while they

made investments and altered their status to erect and commission the

WEGs for the purpose of captive consumption. All their investment plans,

RoE, etc., have been based only on the available terms and conditions as

enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009.

Hence, even though the Commission has made it clear in Para No.4 that

Page 63: Correction Required Copy of Appeal

the terms and conditions are to be applied prospectively, it has

contradicted its own versions and accordingly, in Para No.9.2 it made it to

applicable to all WEGs irrespective of the date of commissioning.

Therefore, the 1st Respondent Commission has committed a serious error

and hence it needs to be corrected and rectified by this Hon'ble Tribunal.

3.19 Therefore, the Appellant humbly prays that the members of the Appellant

having made investments and altered their status based up on certain

terms and conditions stipulated by such orders which were in force during

those points of taking investment decisions, cannot now unilaterally and

arbitrarily be directed to come for a new set of terms and conditions by the

impugned Order which has a very strong impact on their financial

workings and thereby the entire operation becomes totally unviable. The

impugned Order imposes serious civil consequences and therefore, it

could never be retrospective for any reason. Further, the impugned Order

contradicts with each other as far as Para No.4 and Para No.9.2 are

concerned. Further, Para 9.2 of the Impugned Order is in total

contradiction of Regulation 6 of TNERC-Power procurement from New

and Renewable Sources of Energy Regulations, 2008. Hence, it needs to

be set aside on this very score alone.

3.20 Further, in having ordered that all WEGs irrespective of their date of

commissioning to come for the new Order which casts serious civil

consequences to pay more charges, the 1st Respondent has clearly

violated the Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing

but arbitrary exercise of powers, against the approved cannons of law,

against the Principles of natural Justice and against the Principles of

promissory estoppels and legitimate expectation and therefore, it is

expropriatory under Article 14 of the Constitution of India and hence, the

Order needs to be struck down for this score also.

4. Balance of convenience, if any

The Appellant has made out a prima facie case in favour of the Appellant

and the balance of convenience is also in favour of the Appellant only.

Since the members of the Appellant are already paying the notified

charges as per the orders in force and also as per the Energy Wheeling

Agreement they have entered with the 2nd Respondent there is no loss of

revenue to the 2nd or the 3rd Respondent in any manner and as such, the

Interim Order prayed for may kindly be granted.

Page 64: Correction Required Copy of Appeal

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has

been concealed or suppressed and further declares that the enclosures and

typed set of material papers relied upon and filed herewith are true copies of the

originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT APPLICANT

VERIFICATION

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing

the Applicant – Tamil Nadu Spinning Mills Association as its Chief Adviser and

resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are

true to my personal knowledge/ derived from official record and are believed to

be true on legal advice and that I have not suppressed any material facts.

DATE : 13-09-2012

PLACE :

SIGNATURE OF THE APPLICANT

Page 65: Correction Required Copy of Appeal

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

BETWEEN

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

Represented by Dr.K.Venkatachalam Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

AFFIDAVIT FILED BY THE APPLICANT

I, K. Venkatachalam, son of A. Karuppaiah, Hindu, aged about 60 years,

residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil

Nadu do hereby solemnly affirm and sincerely state as follows : -

Page 66: Correction Required Copy of Appeal

1. I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear

to this Affidavit on its behalf. I have been dealing with this matters relating to the

above mentioned case and I am conversant with the facts of the case.

2. I have read the accompanying Interlocutory Application seeking Interim

stay pending the Appeal filed against the Order dated 31.07.2012 in T.R.No.6 of

2012 passed by the Tamil Nadu Electricity Regulatory Commission and I say that

the facts stated therein in paras 1 to 4 are based on the records of the Applicant

maintained in the ordinary course of its business and believed by me to be true.

APPLICANT

VERIFICATION

I, the Deponent above named do hereby verify that the contents or my above

Affidavit are true to my knowledge, no part of it is false and nothing material has

been concealed therefrom.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT

Page 67: Correction Required Copy of Appeal

FORM III

(See Rule 20)

INTERLOCUTORY APPLICATION

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

represented by Dr.K.Venkatachalam, its Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

represented by its Chairman and Managing Director,

144, Anna Salai,

CHENNAI – 600 002.

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

Page 68: Correction Required Copy of Appeal

PETITION FOR INTERIM INJUNCTION

The Applicant above named states as follows :

1. Set out the relief (s)

Pending final decision of the Appeal, the Applicant seeks the issuance of

the following Interim injunction :

For the reasons stated above, it is prayed that this Hon’ble Appellate

Tribunal may be pleased to pass an order of INTERIM INJUNCTION,

restraining the 2nd and 3rd Respondents, their men, agents, representatives

and sub-ordinates from demanding and collecting banking charges(para

8.2), transmission charges, wheeling charges and line loss charges(para

8.3), grid availability charges(8.7) and Scheduling and system operation

charges(para 8.9) in so far as the members of the Petitioner Association

are concerned pending disposal of the above Appeal and thus render

justice.

2. Brief facts

A. The Applicant/Appellant is an Association of yarn spinning mills

which are HT electricity consumers in the State of Tamil Nadu. The

Applicant had earlier filed Petitions before various fora on issues

relating to the rights of its members in the Electricity Sector.

B. The First Respondent is the Tamil Nadu Electricity Regulatory

Commission and the second Respondent is Tamilnadu Generation

and Distribution Corporation Ltd and the Third Respondent is Tamil

Nadu Transmission Corporation Ltd

3. Basis on which Interim injunction prayed for

3.1 The Impugned Order in Para 9.2 makes it mandatory that all WEGs

irrespective of the commissioning dates should be brought under the

Impugned Order and accordingly, all costs have to be paid as per the

Impugned Order. But whereas, according to Regulation 6 of TNERC-

Power procurement from New and Renewable Sources of Energy

Regulations, 2008, any Order of the Commission would bind the WEGs

Page 69: Correction Required Copy of Appeal

commissioned only after the date of the said Order and therefore, the

attempt of the Impugned Order to make it applicable for all WEGs having

the commissioning date prior to the date of Impugned Order is an arbitrary

exercise of power and therefore, it is against law.

3.2 The appellants submits that after coming in to force of the Impugned

Order, there are four categories of WEGs now functioning in the State of

Tamilnadu and each are governed by a separate practice and Order and

accordingly, with separate Power Purchase Agreement or Energy

Wheeling Agreement as the case may be depending up on the date of

commissioning of the WEG.

3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA

(Power Purchase Agreement) and not interfered by the Commission’s

Order dated 15.05.2006 on wind energy in any manner. These WEGs

however, have the option to renegotiate and can come to the benefits of

the Commission’s Tariff Order on Wind Energy dated 15.05.2006 by

renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA

(Energy Wheeling Agreement) as the case may be. In order to make

applicable the Order dated 15.05.2006 of the Commission, there was a

specific provision made available in the Order itself to accommodate the

option of renegotiation under Clause 4. Further, they have the option to

continue with the existing arrangement under PPA Scheme itself if they

are not willing for a renegotiation and as such, if they are not willing, they

can continue in the old scheme itself without renegotiation towards the

EPA/EWA Scheme.

3.4 Same is the case when the next Tariff Order No.1 of 2009 dated

20.03.2009 came in to force from 19.09.2008 onwards. Accordingly,

except for the purpose of Tariff for all other terms and conditions,

renegotiation scope was provided for re-entering in to new EWA in Clause

4 of the Order dated 20.03.2009.

3.5 However, in the present impugned Order, the Respondent Commission

has issued orders totally contradicting the existing schemes by which an

existing WEG can either opt for the new scheme or to continue with the

old scheme which was under the sole option of the WEG owner. Even

though such a scheme has to be provided under the concept of

promissory estoppels and legitimate expectation, the Respondent

Commission has greatly erred in this matter and accordingly, no such

option was made available in the Impugned Order. Besides to the same,

Page 70: Correction Required Copy of Appeal

the Impugned Order is having confusing contents in Para 4 and Para 9.2.

totally contradicting with each other.

3.6 Para 4 of the Impugned Order says as follows:

“Since changes are made in various provisions of the previous Order,

the Commission considers it appropriate to give effect to all of the

provisions contained in this Tariff Order only prospectively. This Order,

therefore, shall come in to effect from 01.08.2012.”

But whereas Para 9.2 of the Impugned Order says as follows:

“Other related charges and terms and conditions specified in the Order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning”

The impugned Order therefore, mandates heavy costs on captive

consumption of wind energy with effect from 01.08.2012 and however,

the EWA already in force is not in support of the said costs to be

collectable from the executants of the EWA. Hence, any WEG owner

could opt to continue to be in the old agreement and therefore, there is

no mandatory necessity to switch over to the new system from

01.08.2012 onwards. This liberty was provided in both the earlier

orders and however, only in the Impugned Order, it has been fully

wiped out. For no reason, the existing WEG owner could be

compelled to go for the new Order which costs him heavily on various

areas and therefore, such a compulsion is against the principles of

natural justice.

3.7 Each WEG is covered by a separate Energy Wheeling Agreement and as

new charges are likely to be levied in place of old charges as per the

impugned Order, the existing WEG owners may not opt to come for the

new Order and they may like to continue to remain in the existing EWA

itself without altering their status. Based on the terms and conditions

prevailed during the time of taking investment decisions, the WEG owners

has come forward for going to the wind power. It is not therefore fair to

drive them to a new set of costs which were not even thought of, when the

investment decision was originally taken. Now asking them for a sweep

change is not fair and reasonable on the principles of promissory

estoppels and legitimate expectation. All investments prior to 31.07.2012

Page 71: Correction Required Copy of Appeal

(ie) before the issuance of the impugned Order have happened only

based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of

2009 dated 20.03.2009. Now without any rhyme or reason, to ask them

also to come for the new Order with high costs is against the principles of

the natural Justice, promissory estoppels and legitimate expectation.

3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has

made as follows:

……… This order contains many provisions not only relating to tariff but

also relating to other terms and conditions. Since charges are made in

various provisions of the previous order, the Commission considers it

appropriate to give effect to all the provisions contained in this tariff Order

only prospectively. This Order, therefore, shall come into effect from

01.08.2012.

But, very much contrary to its own Order in Para No.4, in Para No.9.2 the

1st Respondent Commission has made it as follows.

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

3.9 Hence, from the contradictory statements of the 1st Respondent

Commission, the 2nd Respondent TANGEDCO has given working

instructions to make applicable all the new charges and all other new

terms and conditions to all WEGs who are totally controlled by a different

Energy Wheeling Agreement and accordingly, the 2nd Respondent has

started raising bills for new charges even though there is no provision in

the Energy Wheeling Agreement to claim such charges. The existing

benefits like deemed demand charges were totally withdrawn even without

a notice. Hence, due to the erroneous and anomalous nature of the

impugned Order of the 1st Respondent, all WEG owners/members of the

Appellant are put in too much of financial difficulty and hardship leading to

irreparable loss during every month from 01.08.2012 onwards.

3.10 Further, under the TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008, under Regulation 6, it has been

made as follows:

6. Agreement and Control period

Page 72: Correction Required Copy of Appeal

The tariff as determined by the Commission by a general or

specific order for the purchase of power from each type of

renewable source by the distribution licensee as referred to in

clause 4(3) shall remain in force for such period as specified by the

Commission in such tariff orders. The control period may ordinarily be

two years. When the Commission revisits the tariff and allied issues,

the revision shall be applicable only to the generator of new and

renewable energy sources commissioned after the date of such

revised order.

3.11 However, much contrary to the above Regulation, the Respondent

Commission in Para 9.2 of the Impugned Order, makes it mandatory the

contents of the Order totally applicable for all the WEGs irrespective of the

date of commissioning. The Regulation mandates that When the

Commission revisits the tariff and allied issues, the revision shall be

applicable only to the generator of new and renewable energy

sources commissioned after the date of such revised order. But much

contrary to the same in Para 9.2 of the Impugned Order the Respondent

Commission states as follows:

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

Hence, the Impugned Order is totally against the very letter and spirit of

the Regulation and on this score alone, the Impugned Order needs to be

set aside.

3.12 While the 1st Respondent Commission dealing with execution of Energy

Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has

made it as follows:

8.17. Energy Wheeling Agreement (EWA)

The format for Energy Wheeling Agreement (EWA) shall be evolved as

specified in the Commission’s regulation in force. The period of agreement

and other terms and conditions shall be as per the terms of open access

regulations in force issued by the Commission.

Page 73: Correction Required Copy of Appeal

Hence, even assuming that the Order is applicable for all WEGs

irrespective of the date of commissioning, in order to enforce the various

terms and conditions stipulated in the impugned Order, it requires an

Energy Wheeling Agreement and accordingly, after getting it signed by the

parties concerned only, this Order would be given effect and whereas the

2nd Respondent has not cared to proceed to get the EWA draft vetted and

approved by the Commission after following the due process of

stakeholders’ consultation. This again makes the working instructions

invalid as no new Energy Wheeling Agreement was executed and no text

of Energy Wheeling Agreement was circulated for providing opportunity for

the stakeholders in the matter of finalization of the text of new Energy

Wheeling Agreement.

3.13 The Appellant submits that each WEG has a specific commissioning date

and according to the date of commissioning, the said WEG is governed by

an Order of the Commission and therefore, unless the WEG owner opts

for renegotiation of the existing agreement, the new Order and the various

terms and conditions stipulated in the new Order cannot become

automatically enforceable with the WEGs commissioned before the date

of issuance of the Order in any manner. All the previous orders have very

specifically made this clause under the heading of “Applicability of the

Order” under Para 4 both in Order No. 3 dated 15.05.2006 and in Order

No.1 dated 20.03.2009. Such an arrangement is required and goes in

concurrence with the Regulation 6 of TNERC-Power procurement from

New and Renewable Sources of Energy Regulations, 2008 quoted supra.

For the sake of convenience of reference the said paragraph in Order

No.3 dated 15.05.2006 is reproduced below:

4.0 APPLICABILITY OF ORDER

This order shall come in to force from the date of its issue. This order shall

be applicable to all future and renewal of existing contracts/agreements for

the Non-Conventional Energy Sources (NCES) based Generating Plants

and Non-Conventional Energy Sources based Co-Generation Plants

located within the State of Tamilnadu. It should be noted that the existing

contracts and agreements between NCES based generators and the

distribution licensee signed prior to the date of issue of this order would

continue to remain in force. However, the NCES based generators and the

distribution licensees shall have the option to mutually re-negotiate the

existing agreements or contracts if any, in line with this order even before

the expiry of the existing agreements or contracts. Any renewal of the said

Page 74: Correction Required Copy of Appeal

contracts/agreements, new contracts/agreements shall be in line with this

order.

3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the

Commissioned has made as follows:

4. Applicability of this Order

Order No.3 dated 15.05.2006 of the Commission lays down a control

period of three years for that order and therefore, normally the next order

should have taken effect from 15.05.2009. The Commission in the

Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has

ruled that the control period of three years specified in order No.3 dated

15.05.2006 is waived from the date of issue of that Order. The control

period of three years, thus, stands terminated on 19.09.2008. Therefore,

the Commission holds that all the wind energy generators commissioned

on or after 19.09.2008 shall become eligible for the benefits of the present

order, subject to the condition that the monetary benefits shall accrue from

the date of this order. The existing agreements between the wind energy

generators and the distribution licensee shall continue to be valid. The

parties to the agreement are at liberty at any time to renegotiate the

existing agreement mutually in accordance with this order. The agreement

between the wind generators and the distribution licensee in relation to all

machines commission on or after 19.09.2008 shall be in conformity with

this order.

3.15 The above two orders of the Commission perfectly fit with the Principles of

natural Justice coupled with the theory of promissory estoppels and

legitimate expectation. Further, such a provision is also in line with the

Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Each WEG has come in to being by

a large capital investment. Hence, what set of terms and conditions are

applicable at the time of making investment would continue to be in force

till the WEG promoter opts to continue with it as the investment decision

has happened only with reference to the knowledge, information, rights

and responsibilities made available at the time of making investment

decisions. The members of the Appellant having altered their status based

on certain terms and conditions prevailed at a point of time when they

invested on wind energy, cannot now be unilaterally forced to come for

new terms and conditions. Then it becomes an arbitrary exercise and the

impugned Order could only be construed to have the effect of unilateral

Page 75: Correction Required Copy of Appeal

and arbitrary exercise of power. Further it is violative of the principles set

out under Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008.

3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement

(EWA) by each of the members of the Appellant executed, it has been

made as follows:

“11. Terms and Conditions agreement period:

(7) The agreement shall be valid for a minimum period of 5 years.

(8) The parties to the agreement shall be given the option to exit for

violation of the agreement after serving a notice of three months on the

other party.

(9) The parties to the agreement are at liberty at any time to renegotiate

the existing agreement mutually in accordance with the Commission’s

order in force.”

3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is

a liberty extended to parties that either they can renegotiate the existing

agreement for going to the new agreement as per the new orders if any or

they can continue to remain as such in the existing agreement itself. The

option is therefore, vested with the party concerned and therefore, no

party could be compelled or forced to accept any new terms and

conditions for which no agreement was signed earlier. This option made

available to the WEGs is totally wiped out in the impugned Order. The

impugned Order unilaterally forces all the WEG owners irrespective of the

date of commissioning to come for the new arrangement whereby heavy

costs are involved with large civil consequences.

3.18 Due to the implementation of the working instructions of the 2nd

Respondent based on the impugned Order of the 1st Respondent, every

member of the Appellant is losing heavy money every month due to

certain new charges as leviable due to the fresh terms and conditions of

the new Order with effect from 01.08.2012 onwards. All the members of

the Appellant are totally unaware of the terms and conditions while they

made investments and altered their status to erect and commission the

WEGs for the purpose of captive consumption. All their investment plans,

RoE, etc., have been based only on the available terms and conditions as

enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009.

Hence, even though the Commission has made it clear in Para No.4 that

Page 76: Correction Required Copy of Appeal

the terms and conditions are to be applied prospectively, it has

contradicted its own versions and accordingly, in Para No.9.2 it made it to

applicable to all WEGs irrespective of the date of commissioning.

Therefore, the 1st Respondent Commission has committed a serious error

and hence it needs to be corrected and rectified by this Hon'ble Tribunal.

3.19 Therefore, the Appellant humbly prays that the members of the Appellant

having made investments and altered their status based up on certain

terms and conditions stipulated by such orders which were in force during

those points of taking investment decisions, cannot now unilaterally and

arbitrarily be directed to come for a new set of terms and conditions by the

impugned Order which has a very strong impact on their financial

workings and thereby the entire operation becomes totally unviable. The

impugned Order imposes serious civil consequences and therefore, it

could never be retrospective for any reason. Further, the impugned Order

contradicts with each other as far as Para No.4 and Para No.9.2 are

concerned. Further, Para 9.2 of the Impugned Order is in total

contradiction of Regulation 6 of TNERC-Power procurement from New

and Renewable Sources of Energy Regulations, 2008. Hence, it needs to

be set aside on this very score alone.

3.20 Further, in having ordered that all WEGs irrespective of their date of

commissioning to come for the new Order which casts serious civil

consequences to pay more charges, the 1st Respondent has clearly

violated the Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing

but arbitrary exercise of powers, against the approved cannons of law,

against the Principles of natural Justice and against the Principles of

promissory estoppels and legitimate expectation and therefore, it is

expropriatory under Article 14 of the Constitution of India and hence, the

Order needs to be struck down for this score also.

4. Balance of convenience, if any

The Appellant has made out a prima facie case in favour of the Appellant

and the balance of convenience is also in favour of the Appellant only.

Since the members of the Appellant are already paying the notified

charges as per the orders in force and also as per the Energy Wheeling

Agreement they have entered with the 2nd Respondent there is no loss of

revenue to the 2nd or the 3rd Respondent in any manner and as such, the

Interim Order prayed for may kindly be granted.

Page 77: Correction Required Copy of Appeal

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has

been concealed or suppressed and further declares that the enclosures and

typed set of material papers relied upon and filed herewith are true copies of the

originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT APPLICANT

VERIFICATION

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing

the Applicant – Tamil Nadu Spinning Mills Association as its Chief Adviser and

resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are

true to my personal knowledge/ derived from official record and are believed to

be true on legal advice and that I have not suppressed any material facts.

DATE : 13-09-2012

PLACE : DELHI

SIGNATURE OF THE APPLICANT

Page 78: Correction Required Copy of Appeal

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

BETWEEN

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

Represented by Dr.K.Venkatachalam Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

AFFIDAVIT FILED BY THE APPLICANT

I, K. Venkatachalam, son of A. Karuppaiah, Hindu, aged about 60 years,

residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil

Nadu do hereby solemnly affirm and sincerely state as follows : -

Page 79: Correction Required Copy of Appeal

1. I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear

to this Affidavit on its behalf. I have been dealing with this matters relating to the

above mentioned case and I am conversant with the facts of the case.

2. I have read the accompanying Interlocutory Application seeking Interim

injunction pending the Appeal filed against the Order dated 31.07.2012 in

T.R.No.6 of 2012 passed by the Tamil Nadu Electricity Regulatory Commission

and I say that the facts stated therein in paras 1 to 4 are based on the records of

the Applicant maintained in the ordinary course of its business and believed by

me to be true.

APPLICANT

VERIFICATION

I, the Deponent above named do hereby verify that the contents or my above

Affidavit are true to my knowledge, no part of it is false and nothing material has

been concealed therefrom.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT

Page 80: Correction Required Copy of Appeal

FORM III

(See Rule 20)

INTERLOCUTORY APPLICATION

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

represented by Dr.K.Venkatachalam, its Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

represented by its Chairman and Managing Director,

144, Anna Salai,

CHENNAI – 600 002.

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

Page 81: Correction Required Copy of Appeal

PETITION FOR INTERIM DIRECTION

The Applicant above named states as follows :

1. Set out the relief (s)

Pending final decision of the Appeal, the Applicant seeks the issuance of

the following Interim Direction :

For the reasons stated above, it is prayed that this Hon’ble Appellate

Tribunal may be pleased to pass an order of INTERIM INJUNCTION,

restraining the 2nd and 3rd Respondents, their men, agents, representatives

and sub-ordinates from demanding and collecting banking charges(para

8.2), transmission charges, wheeling charges and line loss charges(para

8.3), grid availability charges(8.7) and Scheduling and system operation

charges(para 8.9) in so far as the members of the Petitioner Association

are concerned pending disposal of the above Appeal and thus render

justice.

2. Brief facts

A. The Applicant/Appellant is an Association of yarn spinning mills

which are HT electricity consumers in the State of Tamil Nadu.

The Applicant had earlier filed Petitions before various fora on

issues relating to the rights of its members in the Electricity

Sector.

B. The First Respondent is the Tamil Nadu Electricity Regulatory

Commission and the second Respondent is Tamilnadu

Generation and Distribution Corporation Ltd and the Third

Respondent is Tamil Nadu Transmission Corporation Ltd

3. Basis on which Interim injunction prayed for

3.1 The Impugned Order in Para 9.2 makes it mandatory that all WEGs

irrespective of the commissioning dates should be brought under the

Impugned Order and accordingly, all costs have to be paid as per the

Impugned Order. But whereas, according to Regulation 6 of TNERC-

Power procurement from New and Renewable Sources of Energy

Page 82: Correction Required Copy of Appeal

Regulations, 2008, any Order of the Commission would bind the WEGs

commissioned only after the date of the said Order and therefore, the

attempt of the Impugned Order to make it applicable for all WEGs having

the commissioning date prior to the date of Impugned Order is an arbitrary

exercise of power and therefore, it is against law.

3.2 The appellants submits that after coming in to force of the Impugned

Order, there are four categories of WEGs now functioning in the State of

Tamilnadu and each are governed by a separate practice and Order and

accordingly, with separate Power Purchase Agreement or Energy

Wheeling Agreement as the case may be depending up on the date of

commissioning of the WEG.

3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA

(Power Purchase Agreement) and not interfered by the Commission’s

Order dated 15.05.2006 on wind energy in any manner. These WEGs

however, have the option to renegotiate and can come to the benefits of

the Commission’s Tariff Order on Wind Energy dated 15.05.2006 by

renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA

(Energy Wheeling Agreement) as the case may be. In order to make

applicable the Order dated 15.05.2006 of the Commission, there was a

specific provision made available in the Order itself to accommodate the

option of renegotiation under Clause 4. Further, they have the option to

continue with the existing arrangement under PPA Scheme itself if they

are not willing for a renegotiation and as such, if they are not willing, they

can continue in the old scheme itself without renegotiation towards the

EPA/EWA Scheme.

3.4 Same is the case when the next Tariff Order No.1 of 2009 dated

20.03.2009 came in to force from 19.09.2008 onwards. Accordingly,

except for the purpose of Tariff for all other terms and conditions,

renegotiation scope was provided for re-entering in to new EWA in Clause

4 of the Order dated 20.03.2009.

3.5 However, in the present impugned Order, the Respondent Commission

has issued orders totally contradicting the existing schemes by which an

existing WEG can either opt for the new scheme or to continue with the

old scheme which was under the sole option of the WEG owner. Even

though such a scheme has to be provided under the concept of

promissory estoppels and legitimate expectation, the Respondent

Commission has greatly erred in this matter and accordingly, no such

Page 83: Correction Required Copy of Appeal

option was made available in the Impugned Order. Besides to the same,

the Impugned Order is having confusing contents in Para 4 and Para 9.2.

totally contradicting with each other.

3.6 Para 4 of the Impugned Order says as follows:

“Since changes are made in various provisions of the previous Order,

the Commission considers it appropriate to give effect to all of the

provisions contained in this Tariff Order only prospectively. This Order,

therefore, shall come in to effect from 01.08.2012.”

But whereas Para 9.2 of the Impugned Order says as follows:

“Other related charges and terms and conditions specified in the Order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning”

The impugned Order therefore, mandates heavy costs on captive

consumption of wind energy with effect from 01.08.2012 and however,

the EWA already in force is not in support of the said costs to be

collectable from the executants of the EWA. Hence, any WEG owner

could opt to continue to be in the old agreement and therefore, there is

no mandatory necessity to switch over to the new system from

01.08.2012 onwards. This liberty was provided in both the earlier

orders and however, only in the Impugned Order, it has been fully

wiped out. For no reason, the existing WEG owner could be

compelled to go for the new Order which costs him heavily on various

areas and therefore, such a compulsion is against the principles of

natural justice.

3.7 Each WEG is covered by a separate Energy Wheeling Agreement and as

new charges are likely to be levied in place of old charges as per the

impugned Order, the existing WEG owners may not opt to come for the new

Order and they may like to continue to remain in the existing EWA itself

without altering their status. Based on the terms and conditions prevailed

during the time of taking investment decisions, the WEG owners has come

forward for going to the wind power. It is not therefore fair to drive them to a

new set of costs which were not even thought of, when the investment

decision was originally taken. Now asking them for a sweep change is not

fair and reasonable on the principles of promissory estoppels and legitimate

Page 84: Correction Required Copy of Appeal

expectation. All investments prior to 31.07.2012 (ie) before the issuance of

the impugned Order have happened only based on either Order No.3 of

2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now

without any rhyme or reason, to ask them also to come for the new Order

with high costs is against the principles of the natural Justice, promissory

estoppels and legitimate expectation.

3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has

made as follows:

……… This order contains many provisions not only relating to tariff but

also relating to other terms and conditions. Since charges are made in

various provisions of the previous order, the Commission considers it

appropriate to give effect to all the provisions contained in this tariff Order

only prospectively. This Order, therefore, shall come into effect from

01.08.2012.

But, very much contrary to its own Order in Para No.4, in Para No.9.2 the

1st Respondent Commission has made it as follows.

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

3.9Hence, from the contradictory statements of the 1st Respondent Commission,

the 2nd Respondent TANGEDCO has given working instructions to make

applicable all the new charges and all other new terms and conditions to all

WEGs who are totally controlled by a different Energy Wheeling Agreement

and accordingly, the 2nd Respondent has started raising bills for new charges

even though there is no provision in the Energy Wheeling Agreement to claim

such charges. The existing benefits like deemed demand charges were totally

withdrawn even without a notice. Hence, due to the erroneous and

anomalous nature of the impugned Order of the 1st Respondent, all WEG

owners/members of the Appellant are put in too much of financial difficulty

and hardship leading to irreparable loss during every month from 01.08.2012

onwards.

3.10 Further, under the TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008, under Regulation 6, it has been made

as follows:

6. Agreement and Control period

Page 85: Correction Required Copy of Appeal

The tariff as determined by the Commission by a general or

specific order for the purchase of power from each type of

renewable source by the distribution licensee as referred to in

clause 4(3) shall remain in force for such period as specified by the

Commission in such tariff orders. The control period may ordinarily be

two years. When the Commission revisits the tariff and allied issues,

the revision shall be applicable only to the generator of new and

renewable energy sources commissioned after the date of such

revised order.

3.11 However, much contrary to the above Regulation, the Respondent

Commission in Para 9.2 of the Impugned Order, makes it mandatory the

contents of the Order totally applicable for all the WEGs irrespective of the

date of commissioning. The Regulation mandates that When the

Commission revisits the tariff and allied issues, the revision shall be

applicable only to the generator of new and renewable energy

sources commissioned after the date of such revised order. But much

contrary to the same in Para 9.2 of the Impugned Order the Respondent

Commission states as follows:

9.2. Other related charges and terms and conditions specified in the order

shall be applicable to all the wind energy generators, irrespective of the

date of commissioning.

Hence, the Impugned Order is totally against the very letter and spirit of

the Regulation and on this score alone, the Impugned Order needs to be

set aside.

3.12 While the 1st Respondent Commission dealing with execution of Energy

Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has

made it as follows:

8.17. Energy Wheeling Agreement (EWA)

The format for Energy Wheeling Agreement (EWA) shall be evolved as

specified in the Commission’s regulation in force. The period of agreement

and other terms and conditions shall be as per the terms of open access

regulations in force issued by the Commission.

Page 86: Correction Required Copy of Appeal

Hence, even assuming that the Order is applicable for all WEGs

irrespective of the date of commissioning, in order to enforce the various

terms and conditions stipulated in the impugned Order, it requires an

Energy Wheeling Agreement and accordingly, after getting it signed by the

parties concerned only, this Order would be given effect and whereas the

2nd Respondent has not cared to proceed to get the EWA draft vetted and

approved by the Commission after following the due process of

stakeholders’ consultation. This again makes the working instructions

invalid as no new Energy Wheeling Agreement was executed and no text

of Energy Wheeling Agreement was circulated for providing opportunity for

the stakeholders in the matter of finalization of the text of new Energy

Wheeling Agreement.

3.13 The Appellant submits that each WEG has a specific commissioning date

and according to the date of commissioning, the said WEG is governed by

an Order of the Commission and therefore, unless the WEG owner opts

for renegotiation of the existing agreement, the new Order and the various

terms and conditions stipulated in the new Order cannot become

automatically enforceable with the WEGs commissioned before the date

of issuance of the Order in any manner. All the previous orders have very

specifically made this clause under the heading of “Applicability of the

Order” under Para 4 both in Order No. 3 dated 15.05.2006 and in Order

No.1 dated 20.03.2009. Such an arrangement is required and goes in

concurrence with the Regulation 6 of TNERC-Power procurement from

New and Renewable Sources of Energy Regulations, 2008 quoted supra.

For the sake of convenience of reference the said paragraph in Order

No.3 dated 15.05.2006 is reproduced below:

4.0 APPLICABILITY OF ORDER

This order shall come in to force from the date of its issue. This order shall

be applicable to all future and renewal of existing contracts/agreements for

the Non-Conventional Energy Sources (NCES) based Generating Plants

and Non-Conventional Energy Sources based Co-Generation Plants

located within the State of Tamilnadu. It should be noted that the existing

contracts and agreements between NCES based generators and the

distribution licensee signed prior to the date of issue of this order would

continue to remain in force. However, the NCES based generators and the

distribution licensees shall have the option to mutually re-negotiate the

existing agreements or contracts if any, in line with this order even before

the expiry of the existing agreements or contracts. Any renewal of the said

Page 87: Correction Required Copy of Appeal

contracts/agreements, new contracts/agreements shall be in line with this

order.

3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the

Commissioned has made as follows:

4. Applicability of this Order

Order No.3 dated 15.05.2006 of the Commission lays down a control

period of three years for that order and therefore, normally the next order

should have taken effect from 15.05.2009. The Commission in the

Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has

ruled that the control period of three years specified in order No.3 dated

15.05.2006 is waived from the date of issue of that Order. The control

period of three years, thus, stands terminated on 19.09.2008. Therefore,

the Commission holds that all the wind energy generators commissioned

on or after 19.09.2008 shall become eligible for the benefits of the present

order, subject to the condition that the monetary benefits shall accrue from

the date of this order. The existing agreements between the wind energy

generators and the distribution licensee shall continue to be valid. The

parties to the agreement are at liberty at any time to renegotiate the

existing agreement mutually in accordance with this order. The agreement

between the wind generators and the distribution licensee in relation to all

machines commission on or after 19.09.2008 shall be in conformity with

this order.

3.15 The above two orders of the Commission perfectly fit with the Principles of

natural Justice coupled with the theory of promissory estoppels and

legitimate expectation. Further, such a provision is also in line with the

Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Each WEG has come in to being by

a large capital investment. Hence, what set of terms and conditions are

applicable at the time of making investment would continue to be in force

till the WEG promoter opts to continue with it as the investment decision

has happened only with reference to the knowledge, information, rights

and responsibilities made available at the time of making investment

decisions. The members of the Appellant having altered their status based

on certain terms and conditions prevailed at a point of time when they

invested on wind energy, cannot now be unilaterally forced to come for

new terms and conditions. Then it becomes an arbitrary exercise and the

impugned Order could only be construed to have the effect of unilateral

Page 88: Correction Required Copy of Appeal

and arbitrary exercise of power. Further it is violative of the principles set

out under Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008.

3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement

(EWA) by each of the members of the Appellant executed, it has been

made as follows:

“11. Terms and Conditions agreement period:

(10) The agreement shall be valid for a minimum period of 5 years.

(11) The parties to the agreement shall be given the option to exit for

violation of the agreement after serving a notice of three months on the

other party.

(12) The parties to the agreement are at liberty at any time to

renegotiate the existing agreement mutually in accordance with the

Commission’s order in force.”

3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is

a liberty extended to parties that either they can renegotiate the existing

agreement for going to the new agreement as per the new orders if any or

they can continue to remain as such in the existing agreement itself. The

option is therefore, vested with the party concerned and therefore, no

party could be compelled or forced to accept any new terms and

conditions for which no agreement was signed earlier. This option made

available to the WEGs is totally wiped out in the impugned Order. The

impugned Order unilaterally forces all the WEG owners irrespective of the

date of commissioning to come for the new arrangement whereby heavy

costs are involved with large civil consequences.

3.18 Due to the implementation of the working instructions of the 2nd

Respondent based on the impugned Order of the 1st Respondent, every

member of the Appellant is losing heavy money every month due to

certain new charges as leviable due to the fresh terms and conditions of

the new Order with effect from 01.08.2012 onwards. All the members of

the Appellant are totally unaware of the terms and conditions while they

made investments and altered their status to erect and commission the

WEGs for the purpose of captive consumption. All their investment plans,

RoE, etc., have been based only on the available terms and conditions as

enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009.

Hence, even though the Commission has made it clear in Para No.4 that

Page 89: Correction Required Copy of Appeal

the terms and conditions are to be applied prospectively, it has

contradicted its own versions and accordingly, in Para No.9.2 it made it to

applicable to all WEGs irrespective of the date of commissioning.

Therefore, the 1st Respondent Commission has committed a serious error

and hence it needs to be corrected and rectified by this Hon'ble Tribunal.

3.19 Therefore, the Appellant humbly prays that the members of the Appellant

having made investments and altered their status based up on certain

terms and conditions stipulated by such orders which were in force during

those points of taking investment decisions, cannot now unilaterally and

arbitrarily be directed to come for a new set of terms and conditions by the

impugned Order which has a very strong impact on their financial

workings and thereby the entire operation becomes totally unviable. The

impugned Order imposes serious civil consequences and therefore, it

could never be retrospective for any reason. Further, the impugned Order

contradicts with each other as far as Para No.4 and Para No.9.2 are

concerned. Further, Para 9.2 of the Impugned Order is in total

contradiction of Regulation 6 of TNERC-Power procurement from New

and Renewable Sources of Energy Regulations, 2008. Hence, it needs to

be set aside on this very score alone.

3.20 Further, in having ordered that all WEGs irrespective of their date of

commissioning to come for the new Order which casts serious civil

consequences to pay more charges, the 1st Respondent has clearly

violated the Regulation 6 of TNERC-Power procurement from New and

Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing

but arbitrary exercise of powers, against the approved cannons of law,

against the Principles of natural Justice and against the Principles of

promissory estoppels and legitimate expectation and therefore, it is

expropriatory under Article 14 of the Constitution of India and hence, the

Order needs to be struck down for this score also.

4. Balance of convenience, if any

The Appellant has made out a prima facie case in favour of the Appellant

and the balance of convenience is also in favour of the Appellant only.

Since the members of the Appellant are already paying the notified

charges as per the orders in force and also as per the Energy Wheeling

Agreement they have entered with the 2nd Respondent there is no loss of

revenue to the 2nd or the 3rd Respondent in any manner and as such, the

Interim Order prayed for may kindly be granted.

Page 90: Correction Required Copy of Appeal

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has

been concealed or suppressed and further declares that the enclosures and

typed set of material papers relied upon and filed herewith are true copies of the

originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT APPLICANT

VERIFICATION

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing

the Applicant – Tamil Nadu Spinning Mills Association as its Chief Adviser and

resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are

true to my personal knowledge/ derived from official record and are believed to

be true on legal advice and that I have not suppressed any material facts.

DATE : 13-09-2012

PLACE : DELHI

SIGNATURE OF THE APPLICANT

Page 91: Correction Required Copy of Appeal

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY

AT NEW DELHI

I.A. No. _____ OF 2012

In

APPEAL No. _____ OF 2012

BETWEEN

TAMIL NADU SPINNING MILLS ASSOCIATION

2, Karur Road, Near Beschi College,

Modern Nagar, Dindigul – 624 001, Tamilnadu.

Represented by Dr.K.Venkatachalam Chief Advisor,

…Appellant

AND

(1). TAMIL NADU ELECTRICITY

REGULATORY COMMISSION,

TIDCO Office Building,

19-A, Rukmani Lakshmipathy Salai,

Marshall Road,

CHENNAI – 600 008.

(2). TAMIL NADU GENERATION AND DISTRIBUTION

CORPORATION LTD,

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

(3). TAMIL NADU TRANSMISSION CORPORATION LTD

144, Anna Salai,

CHENNAI – 600 002.

represented by its Chairman and Managing Director,

…Respondents/Respondents.

AFFIDAVIT FILED BY THE APPLICANT

I, K. Venkatachalam, son of A. Karuppaiah, Hindu, aged about 60 years,

residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil

Nadu do hereby solemnly affirm and sincerely state as follows : -

Page 92: Correction Required Copy of Appeal

1. I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear

to this Affidavit on its behalf. I have been dealing with this matters relating to the

above mentioned case and I am conversant with the facts of the case.

2. I have read the accompanying Interlocutory Application seeking Interim

direction pending the Appeal filed against the Order dated 31.07.2012 in

T.R.No.6 of 2012 passed by the Tamil Nadu Electricity Regulatory Commission

and I say that the facts stated therein in paras 1 to 4 are based on the records of

the Applicant maintained in the ordinary course of its business and believed by

me to be true.

APPLICANT

VERIFICATION

I, the Deponent above named do hereby verify that the contents or my above

Affidavit are true to my knowledge, no part of it is false and nothing material has

been concealed therefrom.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT