The Hindu Business Line : HC restrains TNERC from reopening power pacts issue

THE Tamil Nadu Electricity Regulatory Commission's order directing the Tamil Nadu Electricity Board to fix "fair price" for the power purchased by it from independent power producers has been stayed by the Madras High Court.

The interim stay has been granted by Mr Justice N. Balasubramanian on a writ petition preferred by PPN Power Generating Co Ltd, Chennai, challenging, inter alia, the jurisdiction of the first respondent (TN Electricity Regulatory Commission) in entertaining the representation of the second respondent, former Tamil Nadu DMK MLA Mr Nellikuppam V. Krishnamurthy pleading for fixing the fair price for power purchased from independent power producers (IPP).

Contending that the commission had erred in passing an order dated July 21, 2004, asking the TNEB to fix the fair price for the power purchased from the IPPs, including the present writ petitioner, the petitioner questioned the jurisdiction of the commission to entertain the application filed by the second respondent when the second respondent was not a party to the power purchase agreement between the petitioner and the TNEB.

The petitioner company was generating electricity and had entered into a power purchase agreement on January 3, 1997, with the TNEB (third respondent). It went into commercial operation on April 26, 2001, and had been supplying power to the board.

According to the petitioner, the TNEB had filed a Tariff Revision Petition (TRP No 1 of 2002) before the commission for revision of tariff, and in pursuance of the same, the commission called for objections, if any, from the public. There were 478 applications from the public, including one from the second respondent. After public hearings, the commission passed an order dated March 15, 2003, to the TNEB for implementation.

When the TRP No 1 of 2002 was pending, the second respondent filed the Miscellaneous Petition (MP No 1 of 2003) seeking relief by way of fixing the fair price for the power purchased from the IPPs.

The petitioner said that the first respondent, before hearing the arguments of all the respondents, passed an order on July 21, 2004, rejecting the contentions of the petitioner and others on the preliminary issue of jurisdiction and locus standi of the second respondent and upheld the argument of the second respondent.

Arguing the case of the petitioner, Mr Aravind M. Subramaniam, counsel, pointed out that the commission had exceeded its jurisdiction in deciding the issues that had been decided in TRP No 1, which covered the tariff to be charged to the consumers of the TNEB and the issue of purchase of power from various sources, including the petitioner, and had merely used this miscellaneous petition as a ruse to include issues which had never been pleaded nor raised before the commission.

The commission had erred in coming to the conclusion that under the Commission's New Business Conduct Regulations, 2004, it had the power to entertain petitions from interested persons, when no such power was conferred under the Electricity Act, 2003.

Hence, the powers assumed under the Business Conduct Regulations, 2004 were ultra vires the Act. The second respondent was not procuring electricity from the petitioner directly and could not have any grievance against the petitioner.

The second respondent had, therefore, no locus standi except that he had to take up the matter of fair price with the TNEB from whom he was procuring electricity.

The petitioner further submitted that unless it was established that the power purchase agreement had been executed in violation of the provisions of statute or opposed to public policy, the Commission could not re-determine the cost of purchase of electricity by the TNEB from the petitioner.

The petitioner prayed for stay of all further proceedings pursuant to the orders passed on July 21, 2004 in MP No 1 of 2003 pending disposal of the writ petition.

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