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Case No.WO387717

Electricity Consumer Grievances Redressal Forum

Indore & Ujjain region

G.P.H. Campus Polo ground, Indore

Order No.355/ECGRF/Indore/17 Case No.WO387717

Sub. :- Rebate for Captive Power Plant.

M/s Spentex Industries -------Petitioner

51-A Industrial Area, Sector III,

Pithampur, Distt. Dhar

V/s. The Executive Director (IR) M.P.P.K.V.V.C.L.,Indore -------Respondent

The Superintending Engineer, (O&M) circle M.P.P.K.V.V.C.L., Indore

ORDER

(Passed on the this day of 07st Dec.2017)

Statement of Petitioner:- Fact of the Case :-

01. That, we are having HT connections on 132 KV supply voltage having

contract demand of 7000 KVA in the name of SPENTEX INDUSTRIES LTD

for its Plant situated at 51-A Industrial Area, Sector III, Pithampur, Distt. Dhar

(M. P.).

02. That we are having the H.T. connection for the purpose of Industrial use,

vide consumer No. 5176904000. The copy of bill is enclosed as Annexure-1.

03. That we have availed E.H.T. Connection since long back and our present

contract demand is 7000 KVA.

04. That the Petitioner Company, is a widely held public listed textile

company, duly registered under the Companies Act, 1956, and is engaged in the

business of manufacturing and export of “Cotton Yarn/Synthetic Blended

Yarns” .

It’s Madhya Pradesh based unit at Pithampur and has been providing

employment opportunities to around 2000-employees. The Company has not

only been earning valuable foreign exchange by way of exports of

manufactured yarns, but also has been paying substantial revenues to the state in

the form of various taxes for the development of State of Madhya Pradesh. It

has also been the recipient of accredited prestigious, Government of India

awards viz The Cotton Textile Export

Promotion Council (TEXPROCIL), Ministry of Textiles, Govt. of India/ITID

Quality Excellence Awards/Bronze-Silver-Gold Trophies for export

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Case No.WO387717

performances and also has been instrumental in increasing the prestige of India

globally. However, due to global adverse economic conditions and slowdown

since 2010, off late petitioner has been incurring losses and has been driven to

financial difficulties.

05. It is submitted that due to aforesaid reasons, being beyond its control, the

net worth of the Company had completely eroded and it had filed a statutory

reference before Hon’ble BIFR under Section 15(1) of Sick Industrial

Companies (Special Provisions) Act ‘1985 (SICA), for restructuring of its debts

and as per order dated 23.05.2013 of the Secretary, BIFR had registered its

reference as Case No. 33/2013 and confirmed the same vide BIFR’s letter dated

05.6.2013. After said registration by BIFR, till any Debt Restructuring Scheme

(DRS) could be worked out for the Company, SICA was repealed in Dec’2016

and BIFR stopped functioning. Resultantly, no DRS, being in place, Company

continued to face working capital shortage and other financial constraints, due

to which it had been forced to operate plants at 60-70% of its capacity. In the

meantime, after SICA was repealed, Company was left with no option but to

take up restructuring issue with the Banks/Lenders directly for early resolution

of their debt. As such till the appropriate financial restructuring or Debt

Restructuring Scheme (DRS) is approved by the lenders banks, it has been

struggling with financial difficulties, however realising its social-economic

responsibilities it has been continuing its operations, in the interest of, it’s

around 5000 employees/families of which in Pitampur alone has 2000

employees and state revenue, among others and has been meeting its other fixed

expenses, however delayed. In such circumstances, Company has been on the

look In such circumstances, Company has been on the lookout for saving its

expenses, wherever possible. Owing to such an exercise for some time, it had

been availing power through Captive Generation Route as well. A copy of the

said letter dated 05.6.2013, along with the Order dated 23.05.2013 is annexed

hereto as Annexure-2&3.

06. That Hon’ble MPERC has issued the tariff order on dated 31.03.2017 for

the year 2017-18 in which the following provisions have been made –

xii). Rebate for Captive power plant consumers: A Rebate of Rs 2 per Unit on

incremental consumption is allowed to consumers presently meeting their

demand through Captive power plants (CPP) and would be switching their

consumption from CPP to Licensee. The rebate is applicable for a period of five

years from the date of issue of this Order on total incremental consumption

from Discoms, which the captive consumers have reduced from their captive

consumption and has instead taken from the Licensee .with the following

parameters-

(f) Rebate for Captive power plant consumers:

Applicability: The rebate shall be applicable to consumers

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Case No.WO387717

i. Who have been meeting their demand either fully or partially through

their captive power plants during the last financial year.

ii. Who have recorded an incremental consumption i.e. an increase in the

units consumed from the Petitioners in any month of the current year (FY 2017-

18) compared to the same month in last year (FY 2016-17).

iii. The rebate shall be applicable for a period of five years from the date of

request submitted by the consumer to the Licensee during FY 2017-18

iv. The consumer shall be required to apply with the Licensee for the rebate

indicating that he would be willing to avail supply from Licensee by switching

consumption from his existing captive power plant.

07. That as per above provisions, we requested to Director (Commercial)

vide our letter dated 16.05.2017 to allow the rebate of Rs. 2 per unit in terms of

condition of clause (f) iv. Accordingly, we have already applied to the

MPPKVV CO. LTD. Indore for rebate and have also given an undertaking that

we will reduce the captive consumption to the extent of Nil, and total power

will be drawn from Licensee by switching the captive consumption from M/s

OPGS Power Gujrat Ltd to Licensee only.

08. That in reply of our request, the Chief Engineer (Commercial) vide his

letter No. 10101 dated 19.05.2017 has refused our aforesaid request, unjustly,

contrary to applicable provisions in this regard. A copy of the letter dated

19.05.2017 is enclosed herewith as Annexure- 4.

09. That we had been drawing power through CPP rout from our CPP source

situated at Kutch Gujrat and we were consuming CPP power to the extent of

more than 70 % of our requirement. But now, we have stopped to draw the

power from CPP rout due to new provisions of rebate, in place, with respect to

captive consumption given in the tariff order FY 2017-18 by the Commission.

10. That the Chief Engineer commercial informed us vide his letter no 12051

dated 17.07.2017as under-

“You have availed power from150 MW II Unit of your captive generator

M/S OPGS Power Gujrat Pvt. Ltd. during the month of July 2016, Aug’16,

Oct’16 and Nov’16. Data/documents have been sought from you to satisfy the

terms and conditions of Rule 3 of Indian Electricity Rule 2005 so as to

established M/S OPGS Power Gujrat Pvt. Ltd. as Captive Generator, presently,

the data/documents furnished by your generator does not establishes the captive

status and clarification has been sought from them under the intimation to M/S

Spentex Industries Ltd. vide t.o.i. no. 11496 Dtd 7/06/2017. Only after

satisfying the terms and conditions of Rule 3 of IE Rule 2005 as captive

generator the matter of rebate would be considered in light of provision of

Tariff Order 2017-18.”

A copy of letter no 12051 dated 17.07.2017 , is attached herewith as

Annexure-5.

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Case No.WO387717

11. That MPPKVV CO. LTD has been all through aware that Spentex

Industries unit, situated at Pithampur, had been drawing power under Captive

Route, from Captive generator, OPGS Power Gujrat P. Ltd, for which it has

granted permission before commencement of such supply. Further it has been

furnished all the information sought by it by OPGS Power Gujrat P. Ltd.

Therefore refusal on behalf of MPPKVV CO. LTD, to allow the rebate of Rs. 2

per unit in terms of condition of clause (f) iv, is wrong, unjustified and

unsustainable in law. A copy of documents forward to MPPKVV CO. LTD, in

this regard are attached herewith as Annexure-6. (Colly)

12. That, relying on aforesaid Tariff Order, we have already stopped to draw

the power from CPP units, hence rebate of Rs 2 per unit on our incremental

consumption, becomes applicable and the same should be allowed forthwith, in

letter and spirit of the said Order. But, despite complying with the conditions

applicable for rebate, we have not been allowed any rebate till date,

unjustifiably and the same deserves to be looked into.

Being aggrieved by the refusal made by the Chief Engineer (Commercial)

MPPKVV Co. Ltd., Indore for allowing the rebate of Rs 2 per unit, this petition

has been filed seeking approval of the Hon’ble Forum on the following grounds

inter-alia:-

Ground urged-

01. That the unit is extremely under financial distress. We were also

registered with BIFR as sick company. Further that on account of present

recessionary tendencies globally, the company had to cut down its production

substantially to cut losses and had taken all steps to reduce its expenses,

including expenses on procuring power for its Pithampur Unit and has availed

cheaper power through captive generation route, of which MPPKVV Co. Ltd.

had been throughout aware.

02. That subsequent to Tariff Order passed by MPERC dated 31.03.2017 for

the year 2017-18, allowing the rebate of Rs. 2 per unit on our incremental

consumption, we have stopped drawing power through CPP route from our CPP

source situated at Kutch Gujrat, to avail said benefit. We have since been

consuming total power from MPPKVV CO LTD to avail the rebate of Rs 2 per

unit and to reduce our expenses, in the interest of all the stake holders, i.e.

employees, state revenue and lenders among others. Non allowance of rebate

by the respondents, in such a situation, amounts to contravention of the

Commission’s Tariff order announced for the FY 17-18.

03. That in the event, rebate by the respondents is not allowed, Applicant is

bound to suffer huge financial loss unjustifiably, as we are selling the yarn after

taking into consideration the rebate of Rs.2 per unit in power cost while

calculating the manufacturing cost .

04. That it can be verified from the bills issued by the company that we are

not drawing any power through CPP rout from our CPP source situated at Kutch

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Case No.WO387717

Gujrat, any longer. The copies of bills of May16,June,16 July 16, August 16 and

May17,June,17 July 17, August 17 showing the units drawn from CPP as well

as MPPKVVC sources is attached herewith as Annexure-7

Details, of power drawn through both the sources, is given hereunder, for ready

reference:

SR

NO MONTH

Units drawn from

CPP Sources

Unit drawn

MPPKVVC LTD TOTAL UNIT

1 16-Apr

4646000

2 16-May

4460000

3 16-Jun

4539000

4 16-Jul 2032496 2361504 4394000

5 16-Aug 3841108 642892 4484000

6 16-Sep 3513009 843991 4357000

7 16-Oct 3028782 665218 3694000

8 16-Nov 3889788 1268212 5158000

9 16-Dec

4210000 4210000

10 17-Jan

4139000 4139000

11 17-Feb

3879000 3879000

12 17-Mar

4471000 4471000

Total 16305183 22480817 52431000

OUR PRAYER

It is therefore respectfully prayed, that the Hon’ble Forum, in

consideration of the submission in foregoing paras grant permission for-

01. To allow the rebate of Rs 2 per unit in terms of the direction of the

Commission given in tariff order FY 17-18 and direct the Licensee to give the

credit of incremental consumption due to non drawing of power from our CPP

source.

02. Any other relief as may be given by Hon’ble Forum.

The applicant M/S SPINTEX INDUSTRIES LTD respectfully

submits the reply on submission made by non applicant M P Paschim

Kshetra VV Co. Ltd as under-

MOST RESPECTFULLY SUBMITTED-

01. That the non applicant has submitted the reply before the forum in which

they mention the issue which are not related to case.

02. The Hon’ble Commission passed the tariff order for FY 2016-17 in which

Rebate for captive power plant consumers who have been meeting their demand

either fully or partially from captive power plant and now they meet their

demand from the licensee will get rebate of Rs 2 per unit on incremental units

of the consumer.

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03. The Hon’ble Commission neither provides any restriction and to increase

sale of Discom this rebate has been given as per request made by the Discom in

ARR and tariff proposals which is as under-

A rebate of INR 2 per unit shall be applicable only on those units which

the captive consumers have reduced from their captive consumption and has

instead taken from the distribution licensees. The proposed rebate is applicable

to only such consumers in the license area of the distribution licensees,

a) Who have been captive consumers in the last financial year.

b) Who have recorded an incremental consumption i.e. an increase in the

units consumed from the distribution licensee in any month of the current fiscal

(FY 18) compared to the same month in last year (FY17).

On the request of the licensee Hon’ble Commission allow the rebate in

the tariff order 2017-18 and as per tariff order of Hon’ble Commission we have

decided to meet our demand fully through licensee and not to drawn the power

from captive power plants.

In this respect Pl see following provision of Elect. Act 2003 as under-

Sub-Section 3 of Section 62 of the Electricity Act, 2003 provides that the

Appropriate Commission shall not while determining the tariff, shown undue

preference to any consumer but may differentiate according to consumer’s load

factor, power factor, voltage, total consumption of electricity during any

specified period of time at which the supply is required or the geographical

position of any area, the nature of supply and purpose for which supply is

required. Thus, one of the factors on which the tariffs can be differentiated is

purpose for which supply is required.

Above provision clearly says that the Commission is fully empowered

for the determination of tariff and its condition rebate and penalty.

Being aggrieved by instance taken by the Non-Applicant in not only

denying such rebate, but also denying the right of the Consumer, despite the

above facts, this petition has been filed before this Hon’ble Forum, in the

interest of justice

Our humble submission is to draw your attention towards the

technicalities and legality involved in this case. Superficially, it looks a very

easy to refuse the our request but in other hand the licensee wants to increase

the sale and given the proposal before Hon’ble Commission for various rebate

to encourage the consumer to avail energy from the Distribution licensee and

being a good consumer we switchover totally on licensee supply and not to

drawn the power from captive power plants and the same is being discouraged

contrary to its objective, meaning thereby through its actions licensee does not

want to increase its sale, which is difficult to comprehend.

If the Hon’ble forum permits us, we would like to ask a very few simple

questions to my respected non applicant, who is the most experienced and

expertise in this Act and representing the Company:-

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01. Were there any instruction from the commission and any direction given

in tariff order to not give rebate when the consumer totally stops to draw the

power from CPP sources?

It is surprised and we would be emphasized to note you hon’ble forum

here that “The Commission Has Given The Direction To Give The Rebate If

The Consumer Stop To Draw The Power From The Cpp Sources.” The Hon’ble

Forum can very well go through the consumption of our connection that we

totally switch over on licensee supply.

02. The relevant provision of the tariff order 2017-18 is amply clear and there

is no ambiguity in interpretation of the conditions hence the plea of the non

applicant to clarify the matter as per clause 1.24 from the commission is

devoid of any merit.

03. The case is regarding billing as per tariff order hence it is come under the

jurisdiction of the Hon’ble forum.

04. That MPPKVV CO. LTD has been all through aware that Spentex

Industries unit, situated at Pithampur, had been drawing power under Captive

Route, from Captive generator, OPGS Power Gujrat P. Ltd, for which it has

granted permission before commencement of such supply. Further it has been

furnished all the information sought by it by OPGS Power Gujrat P. Ltd.

Therefore refusal on behalf of MPPKVV CO. LTD, to not allow the rebate of

Rs. 2 per unit in terms of condition of clause (f) iv, is wrong, unjustified and

unsustainable in law.

05. That the Non applicant have been acting arbitrary and unreasonable to the

extent that the non applicant have themselves demanded /requested before the

commission to give the rebate if the consumer shift the total/partially power

from CPP sources, to enhance its sale of power.

06. That anything contrary to above facts and submissions made hereunder,

in the reply by the non-applicant is vehemently denied, as irrelevant to subject

matter of the case or incorrect or being matter of record or doesn’t merit any

response, thereto.

Ground urged-

01. That the unit is extremely under financial distress. We were also

registered with BIFR as sick company. Further that on account of present

recessionary tendencies globally, the company had to cut down its production

substantially to cut losses and had taken all steps to reduce its expenses,

including expenses on procuring power for its Pithampur Unit and has availed

cheaper power through captive generation route, of which MPPKVV Co. Ltd.

had been throughout aware.

02. That subsequent to Tariff Order passed by MPERC dated 31.03.2017 for

the year 2017-18, allowing the rebate of Rs. 2 per unit on our incremental

consumption, we have stopped drawing power through CPP route from our CPP

source situated at Kutch Gujrat, to avail said benefit. We have since been

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Case No.WO387717

consuming total power from MPPKVV CO LTD to avail the rebate of Rs 2 per

unit and to reduce our expenses, in the interest of all the stake holders, i.e

employees, state revenue and lenders among others. Non allowance of rebate

by the respondents, in such a situation, amounts to contravention of the

Commission’s Tariff order announced for the FY 17-18, but also deficiency of

service and in the process has been causing recurring financial losses.

03. That in the event, rebate by the respondents is not allowed, Applicant is

bound to suffer huge financial loss unjustifiably, as we are selling the yarn after

taking into consideration the rebate of Rs.2 per unit in power cost while

calculating the manufacturing cost and pricing our product in the competitive

market.

04. That it can be verified from the bills issued by the company that we are

not drawing any power through CPP rout from our CPP source situated at Kutch

Gujrat, any longer. The copies of bills of May16, June, 16 July 16, August 16

and May17,June,17 July 17, August 17 showing the units drawn from CPP as

well as MPPKVVC sources are attached in main petition.

It is pertinent to note that under section 181 of the Electricity Act,

MPERC has been constituted and the objective of the Commission among

others has been to formulate the rules, to determine the tariff, load, to regulate

the tariff orders, to determine the electric rates and making rules, their

amendments and issuing necessary guidelines from time to time and Licensee as

well as consumer are bound to obey the commission order. Accordingly it is

humbly submitted that said rebate shall be allowed and the same shall be

refunded along with interest amount @12% per annum till the date of payment,

on non refunded rebate amount to the application as per section 62 (6) of EA

2003.

The applicant M/S SPENTEX INDUSTRIES LTD respectfully

submits its reply on submission made by non applicant M P Paschim

Kshetra VV Co. Ltd as under-

MOST RESPECTFULLY SUBMITTED-

The non applicant has submitted the reply on 01.12.2017 before the

forum the point wise reply as under-

Point No-1 The Hon’ble Commission not given any such condition in tariff

order 17-18.

A. Consumption is required to increase from the Discom.

Our consumption has increase due to not drawn power from CPP which

can be seen from the bill issued by the Discom.

B. Captive Generation required to reduce to the extent consumption

increased from the Discom,

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01. We have drawn the total requirement from the Discom . Our consumption

has increase due to not drawn power from CPP which can be seen from the bill

issued by the Discom.

C. Consumer is to avail supply from License by switching consumption

from his existing CPP. In other words CPP should belong to or owned by the

consumer himself.

1. The Hon’ble Commission neither provided any restriction regarding

ownership of the plant. We are the share holder in the company M/s OPGS

Gujrat Power Pvt Ltd and being the shareholder we are one of the owner this

facts can be seen from the letter issued by the Director (commercial) vide letter

no 10416 dated 10.06.2016 .The copy of the letter is enclosed for kind

information and consideration to Hon’ble forum. In the letter the Director

Commercial Indore, vide Para two has clearly accorded its approval,

acknowledging the Applicant, as captive consumer which reads as under-

“Relying upon the documents submitted by you regarding shareholding pattern

of various group CPP users, the competent authority has accorded approval to

acknowledge m/s spentex industries ltd situated at 51 a industrial area sector iii

pithampur ,distt. dhar as CPP consumer”

Point No 2-

01. The Hon’ble Commission passed the tariff order for FY 2017-18 in which

Rebate is to be given for CPP consumers who have been meeting their demand

either fully or partially from captive power plant and now they meet their

demand from the licensee will get rebate of Rs 2 per unit on incremental units

of the consumer.

02. It is well Known facts that the consumption has been increased only due

to switching the consumption from the captive power plant .As such we are

eligible for rebate given in tariff order 2017-18 by the commission.

03. It is also brought in to knowledge to Hon’ble forum that Central Discom

(MPMVVCO LTD Bhopal) has already approved the compliance our group

consumers.

Point No -3

The Hon’ble Commission not provided any such condition in the tariff

order M/s OPGS Gujrat Power Pvt Ltd is a group captive generating plant i.e.

plant is owned by all captive users on share holding basis .M/s Spentex one of

them. This fact has been considered by the Director (commercial) vide letter no

10416 dated 10.06.2016

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Case No.WO387717

Point No-4

Kindly refer the ANX-1 submitted by the non applicant in which %of

captive consumption shown i.e. 64.10% and non captive supply is 35.90%

further kindly see ANX -2 submitted by the non applicant in which share capital

is 28.36% which fulfill the condition of Regulation 2009 in which 26%

ownership & 51% consumption required .

OUR PRAYER

01. It is Prayed that Hon’ble Forum may kindly allow the rebate of Rs 2 per

unit in terms of the direction of the Commission given in tariff order FY 17-18

and direct the Licensee to give the credit of incremental consumption due to non

drawing of power from our CPP source.

02. Other such further relief, as it may deem fit under the facts and

circumstances of the case.

Statement of Respondents:-

In the matter of granting permission under rebate for captive power plants

consumers as per tariff order fy 2017-18 clause (f) tariff schedule hv-3

consumers issued by the mperc on dated 31.03.2017

The Non applicant, Madhya Pradesh paschim Khetra Vidyut Vitaran Co.

Ltd respectfully submits as under: -

01. Through the tariff order FY 2016-17 two new rebates were introduced

for the HT consumers, one for the new green field consumers and other for

existing consumers in respect of incremental consumption. These rebates

provides rebate of Rs 1/Unit. It is observed that some consumers have their own

captive generating plant and they are availing power from their such plant

instead of Discom. These consumers have made investment for setting up their

captive generating plants, further at present state of Madhya Pradesh has surplus

power capacity. Hence it was decided that to encourage such consumers to avail

power from the Discom, therefore high amount of rebate need to offer so as to

compensate the investment of the consumers in the setting up of power plant.

Accordingly vide Tariff order 2017-18 a new rebate of Rs. 2 per unit , for the

consumers owning a captive generating plant and availing power from such

plant has been introduced. To summaries, this rebate set to achieve following

objective:

1.1 To reduce surplus power from the state

1.2 To increase sales of the Discom

1.3 To compensate investment of the consumers in the setting up of captive

generating plant.

02. Clause (f) of specific terms and condition of HV-3 tariff schedule provide

for the methodology and conditions to avail such tariff. The relevant condition

prescribed in the said clause are reproduced as under:

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Case No.WO387717

“(f) Rebate for Captive power plant consumers:




ii. Who have recorded an incremental consumption i.e an increase in the








v. A rebate of Rs 2 per unit shall be applicable on incremental units of the

consumer subject to reduction in captive consumption as per the methodology

given below.

FY 2016-17 FY 2017-18 Incremental

Consumption

from Discom

Reduction

in Captive

Generated

10%

rebate in

energy

charges as

per Para (d)

of specific

terms &

conditions

Rs 2/ Unit

rebate on

incremental

unit

Unit Units

Consumption

from Discom

(Units)

Captive

Generation

Units

Consumption

from Discom

(Units)

Captive

Generation

(Units)

X= A2-A1

Y = B1-B2

(A1) (B1) (A2) (B2)

Scenario 1

100 90 110 90 10 0 10 0

Scenario 2 100 90 110 80 10 10 0 10

Scenario 3 100 90 110 70 10 20 0 10

Scenario 4 100 90 100 80 0 10 0 0

Scenario 5 100 90 120 80 20 10 10 10

From the bare reading of the aforesaid condition and methodology

prescribed in the above table, following facts emerges:

i. Consumer has to avail supply from Licensee by switching consumption

from his existing captive power plant i.e captive power plant should belong to

or owned by consumer himself.

ii. Captive Generation is required to be reduced to avail the benefit of this

rebate.

iii. Tariff order neither provide definition of captive generating plant nor

provide any mechanism to ensure that power plant is captive particularly where

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Case No.WO387717

power plant setup by many person collectively. Further Tariff order also not

referred any other rule or regulation in this regard.

03. Now before imparting on the contention made by the applicant in its

representation, it is necessary to state the complete factual position regarding

applicant before Hon’ble Forum, because it seems applicant has not disclosed

complete facts of the matter in its representation. The same is narrated as under:

3.1 M/s OPGS Power Gujrat Pvt. Ltd, is a conventional fuel based generating

company having Head office at No 6, Sardar Patel Road, Guindy, Chennai and

plant office at village Bhadreshwar, Taluka-Mundra, Dist-Kutch, Gujrat. The

share capital of M/s OPGS is held by many different entities, which are

consumer/ user of electricity in different parts of the country. One such entity is

M/s Spentex Industries Limited (present applicant) which is a HT consumer of

the Discom, having contract demand of 7400 KVA.

3.2 Generator M/s OPGS is a Pvt. Ltd company and as per certificate of CA

submitted from time to time by the M/s OPGS, it is observed that shareholding

of M/s Spentex Industries Ltd. Pithampur in this generating company during

the FY 2016-17 has remains follows:

Period from / To % Shareholding

01/04/2016 to 07/10/2016 2.50%

08/10/2016 to 27/02/2017 1.70%

28/02/2017 to 31/03/2017 1.22%

3.3 M/s OPGS vide letter no OPGS/SIL/001/OA/15-16 dated 19th

March

2016 (Copy enclosed as Annexure-1). informed Discom that it has submitted

open access application for 6.29 MW RTC power for power plant to M/s

Spentex Industries Limited. Madhya Pradesh Electricity Regulatory

Commission (Power Purchase and other matters with respect to conventional

fuel based captive power plants) Regulations, (Revision-I) 2009 (hereinafter

referred to as “Captive Regulation”) read with section 42 (2) of the Electricity

Act 2003, exempts the captive consumers from the levy of cross subsidy

surcharge, hence M/s OPGS requested Discom to acknowledge M/s Spentex as

Group Captive User of electricity generated from their power plant, and thus not

levy ‘Cross Subsidy Surcharge.’ Further OPGS stated that the details of

consumption by M/s Spentex from the Generating Plant shall be submitted at

the end of the financial year.

3.4 As per criteria laid down in the above quoted clauses of the regulation,

status of any power plant as captive or otherwise, can be ascertained only at the

end of the year. Therefore relying upon the certificate of chartered accountant

and undertaking submitted by M/s OPGS, exemption from levy of cross-subsidy

surcharge was provisionally granted to M/s Spentex, subject to final

ascertainment of eligibility for grant of Captive User Status, at the end of the

year.

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Case No.WO387717

3.5 After completion of FY 2016-17, the Discom vide letter No 7418 dated

15/04/2017 asked M/s Spentex to submit the details as per provision of the

‘Captive Regulation’ .(Annexure-2)

3.6 M/s OPGS vide its letter dated 29/05/2017 ( Annexure-3) submitted the

certificate of CA certifying the shareholding and consumption by consumers/

users drawing power from its power plant. On perusal of the certificate, Discom

observe shortcoming in the submission of OPGS and according asked vide its

letter dated MD/WZ/05/Com-HT/11496 Indore dated 07.06.2017 (Annexure-4),

to submit the information as per the provision of the regulation.

3.7 M/s OPGS vide its letter dated 24/06/2017 (Annexure-5) submitted the

reply of the letter of the Discom. On perusal of the reply submitted by M/s

OPGS, the same is again found deficient with respect to prevailing statutory

provisions. Therefore Non applicant Discom vide letter MD/WZ/05/Comm-

HT/15552 dated 01/08/2017 (Annexure-6) & reminder letter

MD/WZ/05/Comm-HT/17322 dated 29/08/2017 (Annexure-7),again asked to

submit information as per the provision of the regulation.

3.8 M/s OPGS vide letter dated 22/09/2017( Annexure-8) has asked the four

week time to submit the desired information and not submitted required

information till date. Further M/s OPGS again vide letter dated 31/10/2017 has

asked for two week time extension for submission of reply (Annexure-9).

04. As already stated that tariff order does not provide the mechanism to

determine status of any generating plant as captive.Captive regulation although

provides condition for determination of captive power plant it is not clear that

such condition shall be applicable for the purpose of rebate prescribed in the

tariff order.

4.1 Here it is noteworthy to reproduced the relevant provision of the captive

regulation:

“Definition of a CPP with respect to own consumption versus sales mix

1.5 A power plant shall be identified as a Captive Power Plant only if it

satisfies the conditions contained in clause 3 (1) (a) and (b) of the Electricity

Rules, 2005 notified by the Ministry of Power, Government of India, on 8th

June 2005, reproduced here for ready reference:

3(1) No power plant shall qualify as a ‘captive generating plant’ under section

9 read with clause (8) of section 2 of the Act unless-

(a) in case of a power plant-

(i) not less than twenty six percent of the ownership is held by the captive

User(s), and

(ii) not less than fifty one percent of the aggregate electricity generated in

such plant, determined on an annual basis, is consumed for the captive use

Provided that in case of power plant set up by registered cooperative

society, the conditions mentioned under paragraphs at (i) and (ii) above shall be

satisfied collectively by the members of the cooperative society:

14

Case No.WO387717

Provided further that in case of association of persons, the captive User(s)

shall hold not less than twenty six percent of the ownership of the plant in

aggregate and such captive User(s) shall consume not less than fifty one percent

of the electricity generated, determined on an annual basis, in proportion to their

shares in ownership of the power plant within a variation not exceeding ten

percent;

(b) in case of a generating station owned by a company formed as special

purpose vehicle for such generating station, a unit or units of such generating

station identified for captive use and not the entire generating station satisfy(s)

the conditions contained in paragraphs (i) and (ii) of sub-clause (a) above

including-

Explanation: -

(1) The electricity required to be consumed by captive Users shall be

determined with reference to such generating unit or units in aggregate

identified for captive use and not with reference to generating station as a

whole; and

(2) The equity shares to be held by the captive User (s) in the generating

station shall not be less than twenty six percent of the proportionate of the

equity of the company related to the generating unit or units identified as the

captive generating plant.

1.6 If in any financial year, the conditions contained in the above mentioned

Electricity Rules, 2005 are not satisfied by the Captive User(s), then as per

clause 3 (2) of the Electricity Rules, 2005 (reproduced below), the entire

electricity (generated from the captive power plant) consumed by Captive Users

in the year shall be treated as if it is supply of electricity by a generating

company and shall be liable to all the charges as recoverable from an Open

Access User. In such an eventuality, the Captive User shall have the right to

represent before the Commission if he is not satisfied with the claim made by

the Distribution Licensee.

3(2) It shall be the obligation of the Captive Users to ensure that the

consumption by the Captive Users at the percentages mentioned in sub-clauses

(a) and (b) of sub-rule (1) above is maintained and in case the minimum

percentage of captive use is not complied with in any year, the entire electricity

generated shall be treated as if it is a supply of electricity by a generating

company.

Explanation: (1) For the purpose of this rule-

(a) “Annual Basis” shall be determined based on a financial year;

(b) “Captive User” shall mean the end User of the electricity generated in a

Captive Generating Plant and the term “Captive Use” shall be construed

accordingly;

(c) “Ownership” in relation to a generating station or power plant set up by a

15

Case No.WO387717

company or any other body corporate shall mean the equity share capital with

voting rights. In other cases ownership shall mean proprietary interest and

control over the generating station or power plant;

(d) “Special Purpose Vehicle” shall mean a legal entity owning, operating

and maintaining a generating station and with no other business or activity to be

engaged in by the legal entity.

4.2 Above quoted clauses of the captive regulation, lays down the criteria to

classify a generating plant as ‘captive generating plant’. In essence, the rule

prescribes that the generating plant needs to fulfill following conditions-

First: At least 26% of Equity share capital must be held by the captive user (s) .

Second: At least 51% energy generated by plant on annual basis, must be

consumed by captive user(s).

Third: The proportion of consumption for each of the ‘group captive user’ must

be in proportion of ownership ( equity share capital in case of company) of such

user in the Group Captive Power Plant.This third condition is applicable only in

case of group captive plants.

4.3 It is submitted that as per above criteria there are two distinct categories

of "captive generating plant". The first category is the case of a power plant set

up by any person to generate electricity primarily for his own use. The person

himself is the only captive user in such a case. In this case first two condition

mentioned in para 5 shall be applicable. The second category, is the case of a

power plant set up by a more than one persons collectively for generating

electricity for their use. In common parlance this second category called as

‘group captive power plant’. In the case of second category, it may be set up as

a special purpose vehicle for generating electricity as setup by M/s OPGS. In

such cases, Special Purpose Vehicle is itself not a consumer, and it is only the

members/shareholders consuming electricity from such plant who would be

"captive users" in relation to such plant. In the case of second category; on the

one hand first two conditions are required to fulfill by the all members/captive

users collectively’ on the other hand the third condition mentioned in para 5

required to fulfill by the each member/captive user individually.

05. Jurisdiction of the Hon’ble Forum

5.1 In this regard it is submitted that case of present applicant M/s Spentax

Ltd is not merely a billing dispute between consumer and non applicant

Discom, so as to adjudicate by the Hon’ble ECGRF. Before becoming eligible

for the rebate provided in the tariff order of FY 2017-18, it is required to

establish that Power Plant setup by M/s OPGS is a captive power plant, then

only it may be ascertained that M/s Spentex is a captive user or not. The power

plant setup by M/s OPGS falls in the second category as mentioned in the para

4.3 above i.e power plant is setup by many users collectively to generate

electricity for their use. Since power plant is a group captive plant it requires to

fulfill all three condition mentioned in para 4.2 above. It is the responsibility of

M/s OPGS to establish as per applicable legal provision, that it is a captive

16

Case No.WO387717

generating plant. It is also noteworthy to mention that in the present case open

access is availed by the Generator M/s OPGS and not the consumer M/s

Spentex. All correspondence with the non applicant Discom regarding captive

status, is also being done by the generator only. Therefore primarily dispute is

between generator and licensee.

5.2 As per provision of the electricity act 2003 the power to resolve the

dispute between generator and licensee is vested with the Hon’ble Commission

and Hon’ble ECGRF is competent to adjudicate the dispute between Discom

and consumers only. The relevant provision of the Electricity Act, 2003 are

reproduced as under:

42 (5) Every distribution licensee shall, within six months from the appointed

date or date of grant of licence, whichever is earlier, establish a forum for

redressal of grievances of the consumers in accordance with the guidelines as

may be specified by the State Commission.

86. (1) The State Commission shall discharge the following functions, namely:

(f) Adjudicate upon the disputes between the licensees, and generating

companies and to refer any dispute for arbitration;

From the bare perusal of the underlying portion of the above provisions

of the Electricity Act 2003 it is clear that Hon’ble ECGRF has no jurisdiction in

the dispute between licensee and generator. It seems that generator M/s OPGS

is not able to submit a satisfactory reply on the observations of the Discom,

therefore trying to hide behind the consumer and wants to adjudicate the dispute

from the Hon’ble ECGRF indirectly. It is settled legal position of the law that

what cannot be done directly cannot be permitted to be done indirectly.The

Hon’ble Supreme Court in the case of State of TN vs. Shyam Sunder (2011) 8

SCC 737 has held as follows:-

“VI. What cannot be done directly – cannot be done indirectly

43. “21. It is a settled proposition of law that what cannot be done directly, is

not permissible to be done obliquely, meaning thereby, whatever is prohibited

under law to be done, cannot legally be effected by an indirect and circuitous

contrivance on the principle of quando aliquid prohibetur, prohibetur et omne

per quod devenitur ad illud …”

In view of above Hon’ble ECGRF is not competent to adjudicate the

present matter which also involves a dispute between generator and the non

applicant distribution licensee.

5.3 Tariff order 2017-18 does not provide any mechanism to ascertain the

power plant as captive or otherwise in case of group captive power plant.

MPERC (Power Purchase and other matters with respect to conventional fuel

based captive power plants) Regulations, (Revision-I) 2009 prescribed the

qualifying criteria to become as captive generating plant. However Hon’ble

MPERC has not referred this regulation in the tariff order. Therefore it is the

matter which is required to decide by the Hon’ble MPERC only, whether the

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Case No.WO387717

rebate is applicable for group captive power plant or not. Even if it is assumed

that such regulation applicable in the present case also, M/s Spentex is required

to approach Hon’ble MPERC as per provision of clause 1.6 of the ‘Captive

regulation’. The said clause is again reproduced as under:










[Emphasis supplied ]

From the bare perusal of the emphasized portion of above quoted clause

1.6 of the ‘Captive Regulation’, it is clear that, if M/s Spentex being ‘captive

user’ is not satisfied with any action of the non applicant Discom, it is required

to approach Hon’ble MPERC and Hon’ble ECGRF is not appropriate forum to

ascertain the status of consumer/generator as captive or otherwise.

5.4 Kind attention is also drawn towards the clause 1.24 of the other terms

and condition of HT tariff. The same is reproduced as under:

1.24 In case any dispute arises regarding interpretation of this tariff order

and/or applicability of this tariff, the decision of the Commission will be final

and binding.

The above clause clearly stipulated that matter pertains to the

applicability of the tariff shall be decided by the Hon’ble Commission. Recently

in the case no 28/2017 in the matter of M/s J K White Vs MP Poorv Khetra

Vidyut Vitaran Co. Ltd dispute regarding applicability of rebate of incremental

consumption is decided by the Hon’ble MPERC as per clause 1.24 of the tariff

order. Copy of the said decision of Hon’ble MPERC is enclosed as Annexure-

10.Since the present also pertains to the interpretation of tariff order, only

Hon’ble MPERC can clarify the correct legal position and not the Hon’ble

ECGRF.

5.5 In view of above submission non applicant submits that Hon’ble ECGRF

has no jurisdiction to decide the dispute regarding determination of status of

consumer as captive or otherwise as well as dispute purely involves

interpretation of tariff order. Accordingly present dispute cannot be decided by

Hon’ble ECGRF.

06. Submission on merits of the case:

Without prejudice to the submission made in the para 5 regarding

jurisdiction of the Hon’ble ECGRF, the submission of non applicant on the

merits of the case is as under:

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Case No.WO387717

6.1 Applicant in its representation has submitted that its production unit is

under financial distress and due to this it had to cut down its production. It also

submits that it has already taken into account the rebate while selling its product

hence incurring huge loss. Applicant also submits that it has started consuming

power from the non applicant Discom in the interest of all stake holder i.e

employees, state revenue, lenders e.t.c. In other words applicant has sought

relief based on the principles of equity. In this regard it is submitted that it is

established principle that, law cannot be a case-specific, it is generic and the law

makers while making the law do not fail to notice of the welfare of the people.

Therefore, by distraction from the law welfare of the people is not achieved. To

repeat, justice, equity and good conscience is inherent in the law itself and apart

from the law, there is no need to search for justice, equity and good conscience.

In view of above submission since applicant not fulfils the terms and

condition stipulated in the tariff order, it is not within the purview of the non

applicant Discom to provide the rebate to the applicant consumer, despite the

fact that applicant consumer is in the financial distress.

6.2 Applicant submits that subsequent to Tariff order by MPERC on dated

31/03/2017 allowing rebate of Rs. 2/unit, it has stopped procuring power from

CPP route. The submission of applicant not seems correct, as table submitted by

applicant on page 6 of its representation clearly shown that it has not availed

power from CPP route since Nov-16.

6.3 Applicant vide para 11 of its representation submitted that it has

submitted all detail to ensure its captive status. This submission of applicant is

totally false as generating company OPGS vide its letter No

OPGS/MP/2017/22917 dated 22.09.2017 & 31/10/2017 (kindly refer Annexure

8 & 9), at first sought at least four week time to submit its reply thereafter again

sought two week time for submission of reply. It is noteworthy to mention that

applicant has submiited in its representation that it has submitted all information

to M/s OPGS , on contrary M/s OPGS vide its letter dated 31/10/2017 (ref

Annexure-9) submitted that it has not received detail from applicant M/s

Spentex. Based on this false submission of applicant it seems that applicant is

abusing the process of law for the undue advantage.

6.4 The condition to get benefit of captive rebate is already mentioned in the

para-2 above. From the bare reading of these conditions, following two primary

conditions emerges:

a. Consumer is to avail supply from Licensee by switching consumption

from his existing captive power plant i.e captive power plant should belong to

or owned by consumer himself.

b. Captive Generation required to reduce to avail the benefit of rebate.

6.4.1 Tariff order 2017-18 provides that consumer who have been meeting their

demand either fully or partially through their captive power plants, is eligible

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Case No.WO387717

for the rebate of Rs 2/Unit. Therefore to get benefit, captive power plant must

be owned by the M/s Spentex Industries Ltd. As stated in para 4 above there are

two category of captive power plant, one is power plant setup by a single person

and another is power plant setup by more than one person. From the language

employed by the Hon’ble Commission in the tariff order specially the term “by

switching consumption from his existing captive power plant”, it emerges that

Hon’ble Commission has extended this rebate only to the first category of

captive power plants i.e power plant setup by the consumer itself and not by the

many group captive users. In the present case power plant belongs to many

captive users and M/s Spentex individually only holds 1.22% equity share

capital of M/S OPGS. M/s Spentex individually cannot claim that power plant is

his captive power plant. Accordingly M/s Spentex is not eligible for the rebate

under dispute.

6.4.2 Even if, it is assumed that rebate is available to the both category of

captive power plant, in case of group captive it cannot be said that power plant

is owned by/belongs to any one “Captive user” it belongs to all captive users

collectively. As stated in para 3.2 above M/s Spentax individually only holds

1.22% equity share capital of M/S OPGS. Even by virtue of imagination no one

can claim that merely by holding 1.22% shares of a company power plant is

owned by him. Since in the present case, only M/s Spentex has applied

individually hence it is not eligible for the rebate.

6.4.3 As per the condition of the tariff order along with increase in

consumption, commensurate Captive Generation required to reduce to avail the

benefit of rebate. Here neither in the representation nor before the Discom, any

detail submitted by the applicant which shows that Generating company M/s

OPGS Gujrat Power Pvt. Ltd shall reduce Generation to the extent of

consumption increase by M/s Spentex from non applicant Discom. Generator

M/s OPGS Gujrat power Pvt Ltd has not been made a party in the

representation, without the consent of M/s OPGS regarding reduction of

generation from its power plant request of allowing rebate to M/s Spentex

cannot be considered. Here it is submitted that Hon’ble commission has made a

conscious decision by stipulating condition of reduction of generation. The

Madhya Pradesh is a power surplus state therefore rebate shall only be provided

where overall surplus power of state get reduced. If this condition not followed,

generator M/s OPGS may transfer its share from M/s Spentex to any other

consumer of the non applicant Discom, thereafter that other consumer may

procure power from M/s OPGS instead from Discom keeping surplus power of

state same. Since no commitment regarding reduction of generation submitted

hence M/s Spentex is not eligible for the rebate. It is also noteworthy to mention

that rebate is prescribed by the Hon’ble Commission considering the investment

done by the consumer in setting up of power plant. In the present case power

plant is not wholly owned by the M/s Spentex and accordingly no investment

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Case No.WO387717

done by it. M/s Spentex only hold 1.22% share capital in M/s OPGS. Therefore

although M/s Spentex may be eligible for other rebate regarding incremental

consumption as per tariff order, it is not eligible for rebate prescribed for captive

consumers.

6.4.4 As stated earlier in para 4, that in case of group captive plant, the

proportion of consumption for each of the ‘group captive user’ must be in

proportion of ownership ( equity share capital in case of company) of such user

in the Group Captive Power Plant. In the present case it is observed that

although the share holding of M/s Spentex varied from 2.5% to 1.22% during

the year, the calculation of proportionate consumption (in reference to equity) as

shown in the certificate submitted by M/s OPGS (ref annexure-3), is based on

the shareholding of user entities as at the end of the year (i.e. 31/3/2017). This

methodology is not according to the provision of the ‘captive regulation’

therefore Spentex not fulfills the condition of ‘captive user’ even according to

the captive regulation; accordingly it is not eligible for the rebate under dispute.

PRAYER

In view of above submission non applicant Discom submits that

representation made by applicant consumer is devoid of merit and is based on

the incorrect factual matrix, accordingly liable to reject.

Without prejudice the submission made on dated 02/11/2017, Discom

submits as under:

1. Clause (f) of specific terms and condition of HV-3 tariff schedule provide

for the methodology and conditions to avail such rebate. As per this clause

following are primary conditions:

a. Consumption is required to increase from the Discom.

b. Captive Generation required to reduce to the extent consumption

increased form the Discom.

c. Consumer is to avail supply from Licensee by switching consumption

from his existing captive power plant. In other words captive power plant

should belong to or owned by consumer himself.

02. In the present case no detail have been submitted by M/s Spentex which

shows that Generating company M/s OPGS Gujrat Power Pvt. Ltd has reduced

Generation to the extent of consumption increased by M/s Spentex from

Discom. As such provision of rebate not applicable to consumer.

03. As per condition of tariff order captive power plant should belongs to or

owned by the consumer himself. In the present case M/s OPGS is a group

captive generating plant i.e plant is owned by all captive users collectively. It is

to inform that M/s Spentex has owned only 1.22% equity share capital in the

generator company M/s OPGS. Therefore on the basis of 1.22% holding M/s

Spentex cannot claim that plant is owned by or belongs to him as required by

the tariff order. Therefore Consumer is not eligible for rebate in question.

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Case No.WO387717

04. Consumer along with M/s OPGS also not fulfils the condition mentioned

in the Madhya Madhya Pradesh Electricity Regulatory Commission (Power

Purchase and other matters with respect to conventional fuel based captive

power plants) Regulations, (Revision-I) 2009 read with Rule 3 of Electricity

Rules 2005, regarding 26% ownership & 51% consumption in proportion of

equity share capital, therefore Consumer not eligible for rebate in question.

PRAYER

In view of above submission non applicant Discom submits that

representation made by applicant consumer is devoid of merit and is based on

the incorrect factual matrix, accordingly liable to reject.

Statutory Provision:-

Madhya pradesh electricity regulatory commission (power purchase

and other matters with respect to conventional fuel based captive power

plants) regulations, (revision-i) 2009

Definition of a CPP with respect to own consumption versus sales

mix 1.5 A power plant shall be identified as a Captive Power Plant only if it

satisfies the conditions contained in clause 3 (1) (a) and (b) of the Electricity

Rules, 2005 notified by the Ministry of Power, Government of India, on 8th

June 2005, reproduced here for ready reference:

3(1) No power plant shall qualify as a ‘captive generating plant’ under section

9 read with clause (8) of section 2 of the Act unless-

(a) in case of a power plant

(i) Not less than twenty six percent of the ownership is held by the captive

User(s), and

(ii) Not less than fifty one percent of the aggregate electricity generated in

such plant, determined on an annual basis, is consumed for the captive use

Provided that in case of power plant set up by registered cooperative

society, the conditions mentioned under paragraphs at (i) and (ii) above shall be

satisfied collectively by the members of the cooperative society:

Provided further that in case of association of persons, the captive User(s)

shall hold not less than twenty six percent of the ownership of the plant in

aggregate and such captive User(s) shall consume not less than fifty one percent

of the electricity generated, determined on an annual basis, in proportion to their

shares in ownership of the power plant within a variation not exceeding ten

percent;

(b) in case of a generating station owned by a company formed as special

purpose vehicle for such generating station, a unit or units of such generating

station identified for captive use and not the entire generating station satisfy(s)

the conditions contained in paragraphs (i) and (ii) of sub-clause (a) above

including

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Case No.WO387717

Explanation: -

(1) The electricity required to be consumed by captive Users shall be

determined with reference to such generating unit or units in aggregate

identified for captive use and not with reference to generating station as a

whole; and

(2) The equity shares to be held by the captive User (s) in the generating

station shall not be less than twenty six percent of the proportionate of the

equity of the company related to the generating unit or units identified as the

captive generating plant.










3(2) It shall be the obligation of the Captive Users to ensure that the

consumption by the Captive Users at the percentages mentioned in sub-clauses

(a) and (b) of sub-rule (1) above is maintained and in case the minimum

percentage of captive use is not complied with in any year, the entire electricity

generated shall be treated as if it is a supply of electricity by a generating

company.

Explanation:

(1) For the purpose of this rule

(a) “Annual Basis” shall be determined based on a financial year;

(b) “Captive User” shall mean the end User of the electricity generated in a

Captive Generating Plant and the term “Captive Use” shall be construed

accordingly;

(c) “Ownership” in relation to a generating station or power plant set up by a

company or any other body corporate shall mean the equity share capital with

voting rights. In other cases ownership shall mean proprietary interest and

control over the generating station or power plant;

(d) “Special Purpose Vehicle” shall mean a legal entity owning, operating

and maintaining a generating station and with no other business or activity to be

engaged in by the legal entity.

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Case No.WO387717

Tariff Schedule – HV - 3

INDUSTRIAL, NON-INDUSTRIAL AND SHOPPING MALLS Specific Terms and Conditions:

(f) Rebate for Captive power plant consumers:




ii. Who have recorded an incremental consumption i.e an increase in the








v. A rebate of Rs 2 per unit shall be applicable on incremental units of the

consumer subject to reduction in captive consumption as per the methodology

given below.

FY 2016-17 FY 2017-18 Incremental

Consumptio

n from

Discom

Reduction in

Captive

Generated

10%

rebate in

energy

charges as

per Para

(d)

of specific

terms &

conditions

Rs 2/ Unit

rebate on

incremental

unit

Unit Units

Consumption

from Discom

(Units)

Captive

Generation

Units

Consumption

from Discom

(Units)

Captive

Generation

(Units)

X= A2-A1

Y = B1-B2

(A1) (B1) (A2) (B2)

Scenario 1

100 90 110 90 10 0 10 0

Scenario 2 100 90 110 80 10 10 0 10

Scenario 3 100 90 110 70 10 20 0 10

Scenario 4 100 90 100 80 0 10 0 0

Scenario 5 100 90 120 80 20 10 10 10

X = the incremental consumption recorded by the captive consumer in any

month of the current year compared to the same month of previous year. And

Y = the quantum of reduction in units consumed from captive plant

(selfconsumption) achieved by the captive consumer in any month of the year

compared to the same month in the last year.

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Case No.WO387717

For all other cases of incremental consumption i.e when X>Y, the

existing rebate of 10% in energy charges per unit will be applicable on X-Y

units (as per the rebate for incremental consumption given in para d in the

Specific Terms & Conditions for HV-3).

Scenario 1: There seems to be no reduction in Captive Generation but only

incremental consumption from Discom, hence a rebate of 10% in energy

charges per unit is applicable on incremental consumption from Discom (as per

the rebate for incremental consumption given in para d in the Specific Terms &

Conditions for HV-3).

Scenario 2: The incremental consumption from Discom is due to the reduction

of captive consumption by same quantum of units hence it will attract a rebate

of Rs 2 per unit on incremental units.

Scenario 3: There is higher reduction in Captive Generation as compared to

incremental Consumption from Discom hence difference of units as shown in

the table, shall qualify for a Rebate of Rs 2.00 per unit.

Scenario 4: There shall not be any rebate due to absence of incremental

Consumption from Discom irrespective of reduction in Captive Generation.

Scenario 5: This scenario depicts incremental consumption from Discom (X)

and reduction in Captive Generation (Y) hence units corresponding to (X-Y)

shall qualify for rebate of 10% in energy charges per unit (as per the rebate for

incremental consumption given in para d in the Specific Terms & Conditions

for HV-3) while units Y shall qualify for Rebate of Rs 2.00 per unit.

Observations and Opinion of the Forum:-

It is observed in the matter that M/s. Spentex Industries Ltd. is a EHV

consumer on 132 KV with CD 7000 KVA located in Sector III, Pithampur.

As per petitioner being captive power user, drawing power from 150MW

II unit of captive generator M/s OPGS Power Gujrat Pvt. Ltd. the rebate of Rs. 2

per unit in terms of the direction of commission given in Tariff Order 2017-18

Clause (f)Tariff schedule, applicable to HV3 consumer be allowed and licence

be directed to give the credit of incremental consumption due to non drawing of

power from our CPP source. Further the petitioner intimated to Forum that the

competent authority vide L.No. 10416 dtd. 10.06.2016 had accorded approval to

acknowledge M/s Spetex Industries Ltd. Pithampur as CPP user drawing power

from 150MW II unit of captive generator M/s OPGS Power Gujrat Pvt. Ltd. and

they have furnished all the information sought by M/s OPGS Power Pvt. Ltd.

Therefore they are entitled to get the rebate of Rs. 2 per unit in terms of the

direction of the commission given in the Tariff Order 2017-18. Accordingly the

credit of incremental consumption due to non drawing of power from our CPP

source may be given.

The non Applicant submitted that they have accorded approval to

acknowledge M/s Spentex Industries Ltd. situated at 51 A Industrial area sector

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Case No.WO387717

No. III Pithampur, Distt. Dhar as captive consumer of unit II (150 MW) Power

Plant of OPGS Power situated at Bhadreshwar, Mundra , kutchh Gujrat. The

above acknowledgment is subject to fulfilment of following terms and

condition:-

I. M/s OPGS Power Gujrat Pvt. Ltd. shall be required to furnish an affidavit

to the effect that in case of the shareholding pattern of the company changes,

they shall duly inform to the MPPKVVCL whenever the change in shareholding

pattern takes place.

II. M/s OPGS Power Gujrat Pvt. Ltd. is required to submit audited statement

of generation of unit II, share of M/s Spentex Industries Ltd. in the generation

and energy units wheeled to the consumer M/s Spentex Industries Ltd.

Pithampur at the end of each financial year.

III. If the consumer M/s SIL Pithampur fails to comply the obligation as per

the captive user in line with the clause 1.5 of MPERC (Power Purchaseand

other matters with respect to conventional fuel based captive power

plant)regulation (Revision-I), 2009 and Rule 3.1 (a) of the electricity rules 2005,

the generator/consumer would be liable to pay all the charges treating the

captive generator as any other generating plant.

After completion of 2016-17 vide l.No. 7418 dtd. 15.04.2017 they have

asked applicant to submit details as per the provision of captive regulation and

further pointed out shortcomings in their replies. The applicant since then had

requested to extend the time period for submitting their reply but even after

expiry of time sought, the reply from the applicant has not been submitted. In

view of Non-compliance of captive Regulation the applicant is not entitled to

get Rs. 2 per unit rebate on incremental unit.

It is observed from various documents/statements submitted by Applicant

and Non-applicant that although M/s OPGS power Gujrat Pvt. Ltd. was granted

permission to acknowledge M/s. Spentex Industries Ltd. as a captive consumer

of unit II (150 MW) of OPGS Power Gujrat relying upon the documents

submitted regarding shareholding pattern of group captive user but it was a

conditional approval subject to fulfilment of followings terms and condition :-

I. M/s OPGS Power Gutrat Pvt. Ltd. shall be required to furnish an

affidavit to the effect that in case of the shareholding pattern of the company

changes, you shall duly inform to the MPPKVVCL whenever the change in

shareholding pattern takes place.

II. M/s OPGS Power Gujrat Pvt. Ltd. is required to submit audited statement

of generation of unit II, share of M/s Spentex Industries Ltd. in the generation

and energy units wheeled to the consumer M/s Spentex Industries Ltd.

Pithampur at the end of each financial year.

III. If the consumer M/s SIL Pithampur fails to comply the obligation as per

the captive user in line with the clause 1.5 of MPERC (Power Purchase and

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Case No.WO387717

other matters with respect to conventional fuel based captive power

plant)regulation (Revision-I), 2009 and Rule 3.1 (a) of the electricity rules 2005,

the generator/consumer would be liable to pay all the charges treating the

captive generator as any other generating plant.

Further it is worthwhile to appreciate following relavent points in the

disputed matter :-

i. M/s OPGS vide L.No. OPGS/SIL/001/OA/15-16 dated 19th

March 2016

requested non applicant to acknowledge M/s. Spentex as Group captive user of

electricity generated from their Power Plant. Further OPGS stated that the

details of consumption of M/s. Spentex from the generating plant shall be

submitted at the end of financial year.

ii. Accordingly Respondent vide L.No. 10416 dtd 10.06.2016 had accorded

provisional approval to treat M/s. Spentex Industries Ltd. as a captive user of

unit II (150 MW) Power Plant of OPGS Power subject to fulfilment of certain

condition.

iii. After completion of 2016-17 Non-applicant vide l.no. 7418 dtd.

15.04.2017 asked M/s Spentex to submit the details of generation in respect of

captive power plant duly certified by Generator Company and relevant

competent authority as per provision of captive regulation.

iv. On reviewing the reply of M/s. OPGS vide their letter dated 29.05.2017

regarding certificate of certifying the shareholding consumption by

consumer/users drawing power from its power plant M/s OPGS Gujrat Ltd. was

asked vide L.No. MD/WZ/05/Com-HT/11496 Indore dated 07.06.2017 to

submit the information as per the provision of the regulation pointing out

shortcomings in their reply.

v. M/s OPGS vide its letter dated 24/06/2017 submitted the reply to Non-

applicant Discom. On perusal of the reply submitted by M/s OPGS, the same

was again found deficient with respect to prevailing statutory provisions.

Therefore Non applicant Discom vide letter MD/WZ/05/Comm-HT/15552

dated 01/08/2017 & reminder letter MD/WZ/05/Comm-HT/17322 dated

29/08/2017 again asked to submit desired information as per the provision of

the regulation.

vi. M/s OPGS vide letter dated 22/09/2017 has asked the four week time to

submit the desired information. Further M/s OPGS again vide letter dated

31/10/2017 has asked for two week time extension for submission of reply,

which is still awaited.

M/s. OPGS also mentioned that they have not received details from

applicant M/s. Spentex Industries.

As per condition of tariff order captive power plant should belong to or

owned by the consumer himself. In the present case M/s OPGS is a group

captive generating plant i.e plant is owned by all captive users collectively. It is

to inform that M/s Spentex has owned only 1.22% equity share capital in the

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Case No.WO387717

generator company M/s OPGS. Therefore on the basis of 1.22% holding M/s

Spentex cannot claim that plant is owned by or belongs to him as required by

the tariff order. Therefore Consumer is not eligible for rebate in question, as it

has not been granted captive status by competent authority.

Consumer along with M/s OPGS also not fulfilled the condition

mentioned in the Madhya Madhya Pradesh Electricity Regulatory Commission

(Power Purchase and other matters with respect to conventional fuel based

captive power plants) Regulations, (Revision-I) 2009 read with Rule 3 of

Electricity Rules 2005, regarding 26% ownership & 51% consumption in

proportion of equity share capital, therefore Consumer not eligible for rebate in

question.

Thus the Forum is of the view that applicant has failed to prove its status

as captive user as per Captive Regulation. It is worthwhile to mention here that

the Tariff Order does not provide the mechanisms to determine status of any

generating plant as captive. The Tariff order is applicable for the purpose of

rebate prescribed for captive user. Therefore applicant may not be entitled for a

rebate of Rs. 2 per unit on incremental units as M/s OPGS has not fulfilled the

condition for M/s Spentex India Ltd. as captive user according to captive

regulations detailed out in statutory provision.

Decision of the Forum:-

01. The petition of Applicant is rejected.

02. As elaborated in the opinion the applicant as per captive

Regulation, mentioned in statutory provision is not entitled to get the rebate of

Rs. 2 per unit on incremental unit mentioned in Tariff Order for the year 2017-

18.

The case is hereby dismissed and order is passed as above.

(D.K.Purohit) (R.K.Tiwari)

Member Chairman

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