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MAR 30 2015

APTEL: APTEL delivers a favorable verdict for DB Power

  • Economic Times, ET Bureau / Hyderabad
  • Created: Mon 30th MAR 2015

DB Power had executed a long term Power Purchase Agreement (PPA) dated 19/8/13 with TANGEDCO for supply of a quantum of 208 MW from 01/2/14 to 30/9/2028. The PPA was signed pursuant to a competitive bidding process through issue of RFP for procurement of power for long term under case I bidding procedure issued by TANGEDCO. DB Power was selected by TANGEDCO as a successful bidder for supply of 208 MW of power as required by TANGEDCO.


DB Power had originally been granted Long Term Access (LTA) to the Western Region & Northern Region Grid from PGCIL for 705 MW in 2009. However, subsequently the Appellant wanted to shift 208 MW to Southern Region Grid because it had entered into PPA with TANGEDCO for supply of 208 MW of power from its 600 MW X 2 power plant in Chhattisgarh starting from 01/2/14. Accordingly DB Power submitted a copy of the PPA to PGCIL in August 2013 thereby requesting for allocation of LTA of 208 MW.


In November 2013, DB Power was informed by PGCIL that a fresh application for LTA would have to be filed. Accordingly, the Appellant submitted its LT A application on 25/11/2003 in the prescribed form as per the “Detailed Procedure for Making Application for Grant of Connectivity in ISTS” (Detailed Procedure) along with a cheque dated 24/11/2013 for Rs 3 lakhs towards the application fee, which w as accepted by PGCIL but later DB Power was informed that the cheque was not accepted by the bank.


In furtherance of the application for grant of LTA made by the Appellant PGCIL vide letter dated 20/12/13 granted LTA for 208 MW in favour of the Appellant. Additionally vide letter dated 20/12/2013 PGCIL granted LTA to three more applicants i.e.(i) Jindal Power, (ii) BALCO & (iii) Ind - Bharat Energy which had applied for energy in November 2013 on a pro rat a basis, subject to signing of formal LTA agreements vide letter dated 20/12/13. The Appellant was granted LTA for 36 MW from 01/6/14 to 31/7/14. Further the Appellant was granted LTA for 208 MW from 01/8/14 to 30/9/28. The LTA was granted for the full quantum of 208 MW from 01/8/14 to the Appellant on the ground that CTU was commissioning the newly built 765 KV Solapur - Raichur D/c line as a result of which there was an additional Available Transmission Capacity(ATC) of 1250 MW from the NEW Grid.


On 22/9/14 PGCIL issued a letter to the Appellant treating the LTA application of the Appellant as having been filed in January 2014 as against that of November 2013 on the sole ground that the cheque submitted by the Appellant along with application dated 29/11/13 had been returned for technical reason. PGCIL by that letter cancelled LTA granted to the Appellant on 20/12/13. The decision of PGCIL deferring the Appellant’s LTA application to January 2014 taken vide letter dated 22/9/2014 has serious civil consequences. The Appellant is suffering a huge financial loss of Rs 40 crores per month arising out of stranding of its generation capacity. The Appellant therefore challenged the validity of the decision.


APTEL after a detailed hearing set aside the impugned order to the extent it holds that cheque is not an acceptable mode of payment of application fee while applying for LTA under the Connectivity Regulations & Detailed Procedure. “We set aside the finding of the CERC that the application of the Appellant has been correctly considered by PGCIL as an application made in January 2014. We are of the opinion that the Appellant, in the peculiar facts of this case is entitled to be treated as November 2013 applicant.”


This order would reflect positively on DB power.



Tamil Nadu Generation and Distribution Corporation Ltd Northern Region Western Region Southern Region Bharat Aluminium Company Ltd Grid Central Electricity Regulatory Commission Power Purchase Agreement Energy Power Plant Appellate Tribunal for Electricity Power

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