PUNJAB STATE ELECTRICITY REGULATORY COMMISSION
SCO 220-221 SECTOR-34-A CHANDIGARH

Petition No.13 of 2008
Date of hearing: 16.09.2008
Date of Order: 13-10-2008

In the matter of:

Petition for approval of Project cost of 168 MW Shahpur Kandi Hydro Electric Project under Section 86 (a) & (b) read with 62(a) of the Electricity Act, 2003.

            AND

In the matter of:
Punjab State Electricity Board, The Mall, Patiala.

Present:
Sh. Jai Singh Gill, Chairman
Smt. Baljit Bains, Member
Shri Satpal Singh Pall, Member

For PSEB:
Shri Prem Sagar, C.E./HP
Shri J.P.Singh, Director/TR-II
Shri Mohinder Singh, DD/ED-III HP

ORDER

            PSEB has filed this petition under Section 86 (1) (a) & (b) read with section 62 (a) of the Electricity Act, 2003 (Act) for approval of the capital cost of 168 MW Shahpur Kandi Hydro Electric Project.

            Section 86 of the Act deals with the functions of the Commission and sub-section 1(a) empowers the State Commission to determine tariffs for generation, supply and transmission etc. Section 86 (1) (b) of the Act stipulates that the Commission shall regulate electricity purchase and procurement process of distribution licensee including the price at which the electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State. Approval of the capital cost of a Project by the Commission is not mandated either under sub-section 1(a) or 1(b) of Section 86 of the Act.

            Section 62 (1) (a) of the Act specifically deals with the determination of tariff for supply of electricity by a generating company to a distribution licensee. The Commission has framed PSERC (Terms & Conditions of Determination of Tariff) Regulations 2005 under section 61 of the Act. According to Regulation 20 of the said Regulations, while determining cost of generation, the Commission shall be guided, as far as feasible by the principles and methodologies laid down by the CERC as amended from time to time. The Hydro-Electric Generating Stations are dealt with in Chapter 3 of the CERC Regulations. There is no requirement of “in principle” approval of the capital cost of a Hydro Electric Generating Station by the Commission in this Chapter whereas in Chapter 2, dealing with Thermal Generating Stations, Regulation 17 specifically provides for “in principle” acceptance of the capital cost of a Project and financing plan before the start of the Project. The Commission also notes that Section 8 of the Act lays down that any generating company intending to set up a Hydro Generating Station is required to submit its scheme to the CEA for its concurrence and in this section also there is no mention of any approval of the capital cost of the Project by the Commission.

             PSEB has not pointed out any other provision of the Act or Regulations under which the Commission is required to grant approval of projected capital cost of 168 MW Shahpur Kandi Hydro Electric Project. This petition is, therefore, not maintainable and is dismissed as such.

Sd/-Sd/-Sd/-
(Satpal Singh Pall)(Baljit Bains)(Jai Singh Gill)
MemberMemberChairman



Place: Chandigarh
Date: October 13, 2008