Petition No.8 of 2003
(on remand by the Appellate Tribunal)
Date of Order: 01-04-2008

The facts of the case are that PSEB while permitting the petitioner to install two TG sets (6 MW & 3 MW) for cogeneration as per CE/Commercial’s letter dated Sept 12, 2002, had also d1irected the petitioner to deposit Advance Consumption Deposit (ACD), Parallel Operation and other charges as per Commercial Circular No. 26/02 dated June 10, 2002. Aggrieved by the proposed recovery of such charges, this petition was filed on July 01, 2003 stating therein that 9 MW TG Set(s) had been installed based on agricultural waste [bagasse] after obtaining approval of the PSEB and the petitioner proposed to install another TG Set of 9 MW and to supply surplus power therefrom to its group companies. The prayer of the petitioner was that he may be allowed to wheel power being/to be generated to its group companies at Ludhiana/Lalru by using the PSEB grid and that the petitioner be exempted from levy of Parallel Operation Charges and ACD on load run on TG sets. Directions were also sought to the PSEB to refund ACD and higher one time permission fee already deposited.

Subsequently, the petition was modified on Sept 15, 2003 stating that the petitioner will not go in for an additional TG Set and as such will not have any surplus power that could be sold/wheeled to a third party/sister concerns and that the total power generated from the existing TG Set will be consumed internally. The modified petition inter alia urged the following:-

1. No ACD is payable on the load connected to the T.G. Set(s) running in isolation of the PSEB system as no interflow of PSEB supply with generation from T.G. Set is taking place. Even no changeover switch/arrangement has been provided for any interflow as per the sanction granted in CE (Comm) memo no.108124/27/94 dated 22.12.94.
2. No Paralleling Charges are payable whether monthly or one time because the T.G. Set will not be connected in parallel with the PSEB system. As such there is no technical or other logic for recovery of such charges nor does the Electricity Act 2003 provide for the same. Even where sale/wheeling of power is envisaged, only wheeling charges and surcharge corresponding to element of cross subsidy are payable u/s 86(a).
3. No Additional Permission Charges are payable for installation of T.G. Set as the requisite charges as admissible at the time of installation already stand paid.
4. Amount already deposited in respect of ACD, Permission and paralleling charges may be refunded.

   As the Board had during the course of these proceedings alleged that the petitioner had installed interchangeable switches allowing flow of power from the PSEB system to the TG load of the petitioner which the latter denied, the Commission in its order dated April 23, 2004 issued directions for inspection of the premises by the Enforcement staff of the PSEB. The inspection was carried out on May 6, 2004 but as the petitioner had only disputed the validity of the PSEB Regulations, the Commission did not refer to this report in its order of July 23, 2004. In that order, the Commission dismissed the petition upholding the validity of PSEB’s Sales Regulations. Aggrieved thereby, the petitioner filed an appeal before the Punjab and Haryana High Court which in its order dated November 8, 2004 directed the Commission to decide the matter afresh after looking into all aspects of the case. This was challenged by PSEB in the Supreme Court where on October 9, 2006, the order of the High Court was set aside and the parties were directed to approach the Appellate Tribunal with an appropriate application. The petitioner submitted Appeal No.7 of 2007 before the Appellate Tribunal which was disposed of on July 26, 2007 directing the Commission to take a fresh view after hearing the parties. Relevant paras of the Tribunal’s order are reproduced below:-

   12. The foremost issue which requires examination is whether the appellant was not using supply from the PSEB for the sugar plant, as contended by it. In case answer to the question is in the affirmative, the next issue for determination will be whether the appellant is still liable to deposit ACD under the circulars. The second issue relates to the applicability of the circulars. This is a question of law. Any concession on a question of law does not bind the party making it.
   13. As already pointed out it was brought to our notice that the plant of the appellant was inspected on May 6,2004 by Sr. XEN Enf.-2, Ludhiana and Sr. XEN MMTS, Patiala. The report is revealing. The report to the extent relevant reads as under:

       “While checking RPR in the presence of PSEB team the observations as noted below. When PSEB supply was switched on and by providing special loop to change over switch (TG & PSEB supply ) the supply reached the control panel inter connecting the TG Bus and the auxiliary bus on putting the load on TG bus the reverse power relay existing on the inter connecting panel operated and switched off the supply then the supply could not reached the TG load. Inter connecting breaker could be switched on when it was tried to inject supply from TG side but the said breaker could not be closed and supply was available from PSEB side.”

       The existence of the report has not been disputed by the learned counsel for the respondents. The impact of the report, which was on record, was not considered by the PSERC. The principles of fair play and justice demand that the report, dated May 6,2004 ought to have been considered by the PSERC, with reference to the relevant circulars. The PSERC ought to have decided whether or not the appellant was using PSEB supply for running its sugar plant. It is only after the question is answered, the impact of the same with reference to the circulars can be determined.

   14. In the circumstances, therefore, we remit the matter to the PSERC to determine the questions detailed in para-12 above and to consider the ‘Report’ and its impact, with reference to the relevant circulars. For this purpose, it will also be open to the PSERC to consider other relevant material as on record. The PSERC shall take a view after hearing the parties.”

2. In compliance of the Appellate Tribunal’s order, this petition was taken up for hearing on 25.9.2007 and arguments heard after the parties had filed their written submissions. The petitioner has largely reiterated the plea made in the modified petition. Referring to the continuance of PSEB’s Sales Regulations in the Commission’s Tariff Order for the year 2003-04, it was submitted that this could not be done unless specific objections had been sought from the consumers and findings given thereon. The petitioner has further urged that as the Board had itself stopped the recovery of ACD in Commercial Circular No.51/2006 dated 4.10.2006 while the levy of Parallel Operation Charges has been discontinued w.e.f. 1.9.2007 by the Commission in its Tariff Order for 2007-08, the amount already deposited in respect of these charges needs to be refunded. The petitioner has also taken the additional plea that the levy of load surcharge amounting to Rs.8263298 is totally unsustainable and can not be allowed to stand. On behalf of PSEB it has been contended that the petitioner is not entitled to any relief as levy of different charges is strictly in accordance with its Sales Regulations, the validity of which has already been upheld by the Commission.
3. The Commission notes that the petitioner had earlier been granted permission on December 23, 1994 to install two TG Sets (3125 KVA each) and two DG Sets of 320 KVA & 300 KVA capacity. The petitioner also has an electric connection from PSEB for its colony, auxiliary load, workshop etc. with a sanctioned contract demand of 750 KVA with a transformer capacity also of 750 KVA. The auxiliary load of the TG sets could be fed from the Board or DG/TG sets. The Commission further observes that keeping in view the limited transformer capacity of the consumer (750 KVA) and capacity of metering equipment, the load of the Sugar Mill and other industries of the petitioner normally fed from TG sets, could not be fed from PSEB supply. This fact can also be inferred from the Inspection Report of 6th May 2004 and substantiated by the down loaded data from the metering equipment of the consumer furnished by the Board.
4. The main issue now to be decided is whether the petitioner is still liable to deposit ACD and other charges leviable as per Sales Regulations. The Commission observes that relevant Circular No.26/2002 under which charges were levied was effective from 10.6.2002. Permission to install 2 T.G. Sets of 9 MW for co-generation was granted by the Board through letter No.46932/33 dated 12.9.2002 subject to the conditions of Circular No.26/2002 and deposit of the following charges:
   1. Permission fee @ Rs.50/- per KVA
   2. ACD charges for the load connected to TG over and above the load already sanctioned and released from PSEB system.
   3. Parallel Operation Charges @ Rs.200/- per KVA of 7.5% of the installed capacity of TG Set in KVA.

   As submitted by the Board, the petitioner deposited the permission fee and when asked to deposit ACD and other charges, obtained a stay order on 14.6.2003 from the Local Civil Court on the condition that the matter may be decided by the Commission and till that time Bank Guarantee equivalent to 50% of these charges shall be rendered by the petitioner. Thereafter, this petition was filed on July 01, 2003.

   The petitioner has now argued that since PSEB supply was not being used as per the Inspection Report, ACD and other charges could not be levied by the Board. To support this contention, petitioner had referred to letter dated December 23, 1994 through which PSEB allowed the petitioner to install two TG Sets (3125 KVA each) and two DG Sets of 320 KVA & 300 KVA capacity. The Commission observes that the present petition is regarding charges etc. pertaining to TG Sets permitted to be installed by the Board in letter dated September 12, 2002. This permission was granted by the Board subject to the conditions of Circular No. 26/2002 and deposit of the charges specified in the permission letter. There is no dispute that the charges have been levied according to the said circular and its subsequent amendments. There is no impact of the Inspection Report on the levy/deposit of ACD, parallel operation charges and permission fees because these are as per the then prevailing Sales Regulations of the Board which were made a pre-condition while granting permission. Hence, even after considering the Inspection Report, the petitioner was still liable to deposit ACD etc. under the then Sales Regulations. It is also relevant to reiterate that all existing Sales Regulations were ordered to be continued by the Commission for 2003-04 and thereafter. In respect of the argument that the charges were continued without obtaining objections from the public, it is observed that no appeal was filed against their continuance. For all these reasons, the Commission reiterates its earlier conclusions that PSEB’s Sales Regulations/Commercial Circulars remain legally valid until they are revised. As these charges were payable, the question of their refund does not arise and the petitioner can not take retrospective advantage of the Commercial Circular No. 51/2006 in respect of discontinuation of ACD and the subsequent Order of the Commission regarding Parallel Operation Charges which are both applicable only with prospective effect.

5. In so far as the payment of load surcharge is concerned, the Commission observes that it was not part of the petition. The petitioner for the first time, in the submissions dated June 15, 2004 filed with reference to the inspection dated May 6, 2004, prayed that the Board may be debarred from levying load surcharge. As the load surcharge had not been levied till that time, the Commission did not pass any order in this respect in its order dated July 23, 2004 as cause of grievance on this account did not exist. The Commission, further, observes that the load surcharge has been levied after the decision of the petition and is in the nature of a grievance. There is a special mechanism for the redressal of grievances in respect of charges levied by the Board and the petitioner is free to seek redress through this specifically laid down procedure. In these circumstances the Commission refrains from passing any order in respect of the levy of load surcharge.