The matter came up for hearing on May 27,2002.

R .S.Mann, CHAIRMAN
S.K.Sharma, MEMBER
L.S.Deol, MEMBER

The Commission heard both the petitioner and the Board in view of the Petition and the reply dated May 10,2002 filed by the Board.

2. The Petitioner pleaded that the Power Purchase Agreement in question is exactly similar to number of other such PPAs which have already been signed by the Punjab State Electricity Board, and the concerned private parties in these cases are already going ahead with financial closure and even construction works. The petitioner also pleaded that even though he has invested substantial money of about Rs. 2 Crores in the project, he is not able to go ahead with the in view of the known availability of PPA. In absence of the PPA,the petitioner is not able to obtain the requisite loan for the project consequently delaying financial closure of the project.This delay has put undue burden on the petitioner and has also put him at a disadvantageous position viz-a-viz other private parties whose PPAs have been signed by the Board on exactly similar terms and conditions. The petitioner has done nothing to attract such discrimination and has pleaded that he should be placed at par with other parties whose PPAs have been signed by the Board.The petitioner has also undertaken to abide by the decision of the commission on the tariff and other terms and conditions of the PPA as and when taken by the commission.The petitioner has also given an undertaking to this effect on an affidavit as desired by the Commission.

3. The Board’s representative, on its part confirmed that it has already signed PPAs with private parties in 14 other cases for purchase of power from small Hydel projects, the details of which are already given in its reply.The Board’s representative also confirmed that PPAs already signed by it and PPA under finalization with the petitioner are exactly the same as regards tariff and other terms and conditions,the only differerence being that of generating capacity.The Board’s representative indicated that the only reason for not signing the PPA with the petitioner was the Gazette notification issued by the commission and published in the Punjab government gazette dated Feb 15,2002 wherein it has been stipulated that any generating company located within the state of Punjab proposing to enter into any agreement for supply of electricity within the state of Punjab with any buying party was to get the approval of the commission for tariff before entering into such contract.The Board’s representative explained the in view of the above clear cut provision,approval of the commission was a must and as such PPA was not signed by the Board in the instant case as yet.The Board’s representative further pleaded that the order 14 PPAs signed by the Board in the circumstances explained in the reply of the Board may also be reviewed by the commission and the suitable orders passed with regard to tariff and other terms and conditions.

4. The representative of the Board also indicated that the Board had reservation about the tariff proposed in the PPAs but had signed keeping in view the directions of the govt. of Punjab.The Board’s representative stated that in total 25 such small micro Hydel projects of 27.2 MW capacity were identified out of which in 14 cases , the Board has already signed the PPAs.He also made clear that some of the projects where the Board has signed the PPAs are going ahead with reference to contract terms and in atleast 3 cases, the construction work has reached advance stage.In remaining cases, the project are in the process of obtaining financial closure.

5. The commission noted that the project of the petitioner is in the small Hydel segment which is environment friendly and should be promoted in public interest. It is also the policy of govt. of Punjab to promote such projects by allowing number of incentives.The commission further noted that the PPAs already signed by the Board and the PPA in question are in keeping with the policy of govt. of Punjab on the matter.

6. The commission observed that even though the Board had certain reservations about the tariff an terms and conditions contained in the PPAs,it had already signed 14 such PPAs with other private parties and the process in these cases is already on with reference to the terms of the PPAs. The sole reason for the Board not to sign the PPA,in instant case of the petioner is the govt. notification dated Feb 15,2002 of the commission cited.However ,the provision contained the notificatin had already come into effect from the date of constitution of the commission and the appointment of its chairman and members that is w.e.f. April 18,2001.More so,the provisions for approval of PPA by the commission are already contained in the Electricity Regulatory Commission Act,1998 under section 22 and 29 of the said act .Punjab govt. notification dated Feb 15,2002 does not add or change anything in the above provisions and the provisions of the ERC Act,1998 on the matter were already abundantly clear.The commission also noted that tariff for power purchase can be approved by the commission only after following due procedure including public hearing which will take atleast 3 months.The commission feels that mean while there is no reason to deny the petitioner the same status which has already been awarded by the Board to number of other similarly placed private companies.This is more so in view of the facts already indicated in preceding paras and the fact that total capacity involved is 27.2 MW only.Furher,the Board has already proposed that even the 14 PPAs already signed by it are open to review and passing of orders by the commission on all matters including tariff and other terms and conditions.The petitioner has only prayed for equal treatment as given to other parties in which cases the PPAs have already been signed by the Board.The petitioner has further undertaken to abide by the decision of the commission in respect of PPAs as and when the matter is decided by the commission.The fact that other projects,where the Board has signed PPAs , are going ahead with their works and no stay has been imposed on such projects,has been confirmed by the Board representatives.

7. In view of all above ,the commission does not see any justification for treating the project of the petitioner at a different footing that the 14 other projects where PPAs have already been signed by the Board.The commission,therefore,directs the Board to sign the PPA with the petitioner on the same lines as done by it in other 14 cases.The PPA so signed should be on exactly same terms and conditions as already signed in the 14 cases by the Board.In case,the Board has any reservation about tariff and other terms and conditions of the PPAs, it is open for the Board to move separate petition before the commission on the issue where upon the commission will take suitable decision after public hearing.

Place : Chandigarh
Dated : June 3, 2002