Case Note & Summary
The case involves a dispute between Sai Wardha Power Generation Limited (SWPGL) and Hindustan Petroleum Corporation Limited (HPCL) on one side, and Tata Power Company Limited-Distribution (TPC-D) on the other, regarding the levy of wheeling charges for power supplied to HPCL through 110 kV feeders. HPCL had been receiving electricity from TPC since 1955, and in 2005, a power supply agreement was executed for additional 70 MW supply at 110 kV. In 2006, TPC trifurcated its assets into generation, transmission, and distribution entities. The 2x110 kV lines were capitalized in TPC-D's books in 2008, and HPCL paid wheeling charges since then. In 2014, TPC obtained a transmission licence that inadvertently included these lines. HPCL later sought open access to purchase power from SWPGL, and TPC-D levied wheeling charges. HPCL filed a petition before the Maharashtra Electricity Regulation Commission (MERC) seeking a declaration that TPC-D was not entitled to levy wheeling charges, arguing that the 110 kV lines were transmission assets. MERC allowed HPCL's petition, holding that the lines were part of the transmission system based on voltage classification under CEA Regulations, 2010, and directed refund of wheeling charges. The Appellate Tribunal for Electricity (APTEL) reversed MERC's order, holding that the 110 kV feeders were integral to TPC-D's distribution network and that TPC-D was entitled to levy wheeling charges. The Supreme Court upheld APTEL's decision, dismissing the appeals filed by SWPGL and HPCL. The Court held that the 110 kV feeders were always used for distribution to HPCL, a single consumer, and their inclusion in the transmission licence was an error. The Court emphasized that the functional use of the lines, not merely voltage level, determines whether they are distribution or transmission assets. The Court also noted that HPCL had paid wheeling charges for years without objection, and that the CEA Regulations' voltage classification is not absolute. The Court directed MERC to re-determine the wheeling charges at EHT level 110 kV, as HPCL had been paying higher charges. The judgment clarifies that a distribution licensee can own and operate lines at extra high voltage if they are used for distribution to consumers, and that a consumer cannot avoid wheeling charges by relying on voltage-based classification alone.
Headnote
A) Electricity Law - Wheeling Charges - Classification of 110 kV Feeders - Distribution vs Transmission - The core issue was whether 110 kV feeders from Trombay Generation Station to HPCL's premises are part of the distribution system or transmission system. The Supreme Court held that the 110 kV feeders are integral part of TPC-D's distribution network, and TPC-D is entitled to levy wheeling charges. The Court relied on the functional use of the feeders and the fact that they were always used for distribution to a single consumer, HPCL. (Paras 1-13) B) Electricity Law - Open Access - Wheeling Charges - Consumer's Liability - HPCL, a consumer, sought to avoid wheeling charges by arguing that the 110 kV lines were transmission assets. The Court rejected this, holding that the consumer's connection to a distribution licensee's network, even at EHV level, does not convert the line into a transmission line. The Court emphasized that the classification depends on the function and not merely voltage level. (Paras 6-8) C) Electricity Law - Regulatory Framework - CEA Regulations, 2010 - Voltage Classification - The CEA Regulations, 2010 classify voltage levels up to 33 kV as distribution and 66 kV and above as transmission. However, the Court held that this classification is not absolute and that a distribution licensee can own and operate lines at higher voltages if they are used for distribution to consumers. The Court distinguished the facts from the general voltage-based demarcation. (Paras 6-8) D) Electricity Law - Licence - Erroneous Inclusion in Transmission Licence - Effect - TPC-T had inadvertently included the 110 kV feeders in its transmission licence. The Court held that this erroneous inclusion does not change the character of the feeders as distribution assets. The Commission had already rejected the amendment application, and the Tribunal had remanded it. The Court noted that the factual use and regulatory treatment of the feeders as distribution assets override the licence entry. (Paras 4-5)
Issue of Consideration
Whether Tata Power Company Limited-Distribution (TPC-D) is entitled to levy wheeling charges for power supplied to HPCL through 110 kV feeders, and whether those feeders are part of the distribution system or transmission system.
Final Decision
The Supreme Court dismissed the appeals, upholding the APTEL judgment. The Court held that the 110 kV feeders are integral part of TPC-D's distribution network, and TPC-D is entitled to levy wheeling charges. The Court directed MERC to re-determine the wheeling charges at EHT level 110 kV.
Law Points
- Wheeling charges
- Distribution network
- Transmission network
- Voltage classification
- Open access
- Electricity Act
- 2003
- CEA Regulations
- 2010
