Case Note & Summary
The appeals arose from an Appellate Tribunal for Electricity (APTEL) order dated 23.03.2012, which upheld the Haryana Electricity Regulatory Commission (HERC) order dated 23.03.2010. The dispute involved a Power Purchase Agreement (PPA) dated 12.08.1998 between Haryana Power Purchase Centre (appellant) and Magnum Power Generation Limited (respondent). The PPA provided for a tariff of Rs. 2.40 per kWh, with a fixed component of Rs. 1.29 per unit and a variable component. The HERC, in a tariff order dated 12.08.2003, allowed fixed costs to be paid to the generator irrespective of whether any energy was purchased. This order was not challenged by either party. Subsequently, the appellant filed a petition under Section 86(1)(f) of the Electricity Act, 2003, seeking recovery of dues. The HERC, in its order dated 23.03.2010, dismissed the appellant's claim and directed that any excess recovery from consumers be refunded. APTEL upheld this order. The Supreme Court allowed the appeals, holding that the HERC's tariff order dated 12.08.2003 was final and binding, and the Commission could not disregard it in subsequent proceedings. The court set aside the orders of HERC and APTEL and directed that the fixed costs be paid as per the tariff order.
Headnote
A) Electricity Law - Power Purchase Agreement - Fixed Cost - Tariff Order Binding - The HERC's final tariff order dated 12.08.2003, which allowed fixed costs to the generator irrespective of energy purchase, was binding on the parties and could not be overridden in subsequent proceedings under Section 86(1)(f) of the Electricity Act, 2003. The court held that the Commission's earlier order was final and not challenged, thus the fixed cost component had to be paid. (Paras 1-8) B) Electricity Law - Section 86(1)(f) - Dispute Resolution - Scope - The jurisdiction under Section 86(1)(f) does not permit reopening of a final tariff order that has attained finality. The court held that the HERC's order dated 23.03.2010, which effectively denied fixed costs, was contrary to its own earlier order and was set aside. (Paras 7-8) C) Contract Law - Power Purchase Agreement - Interpretation - Clause 8.2 and Schedule 4 - The PPA provided for payment of fixed cost (Rs. 1.29 per unit) as part of tariff up to 75% PLF, and the tariff order recognized that fixed cost must be paid even if no energy is purchased. The court upheld this interpretation. (Paras 4-6)
Issue of Consideration
Whether the Haryana Electricity Regulatory Commission (HERC) could, in proceedings under Section 86(1)(f) of the Electricity Act, 2003, disregard its own final tariff order dated 12.08.2003 which mandated payment of fixed costs to the generator irrespective of energy purchase, and whether the Appellate Tribunal for Electricity (APTEL) erred in upholding such disregard.
Final Decision
The Supreme Court allowed the appeals, set aside the orders of APTEL dated 23.03.2012 and HERC dated 23.03.2010, and directed that the fixed costs be paid to the appellant as per the tariff order dated 12.08.2003.
Law Points
- Fixed cost payable irrespective of energy purchase
- Tariff order binding on parties
- Section 86(1)(f) Electricity Act
- 2003
- Power Purchase Agreement interpretation
- Plant Load Factor
- Availability Declaration
- Generation Schedule
