THE CENTRAL ELECTRICITY REGULATORY COMMISSION
in Petition No.19/2000
Shri S.L. Rao, Chairman
Shri D.P. Sinha, Member
Shri G.S. Rajamani, Member
Shri A.R. Ramanathan, Member
the matter of :
for Transmission Tariff for Kaiga Transmission System in Southern Region.
the matter of :
Power Grid Corporation of India Ltd.,
B-9, Qutab Institutional Area,
New Delhi-110 016.
Power Transmission Corporation and Others
following were present :-
Shri S.K. Dube, ED-Comm., PGCIL
Shri S. S. Sharma, AGM( Comm), PGCIL
Shri V.V. Sharma, DGM (C), PGCIL
Shri K.S. Upadhyay , CE , KPTCL
Shri N.Sundaresan, Resident Manager, TNEB
Shri A. Muthunarayanan S.E, Ele.Deptt., Pondicherry
(Date of Hearing 26.04.2000)
petition has been filed by Power Grid Corporation of India Ltd. (PGCIL)
seeking approval of the Commission for Transmission Tariff for Kaiga
Transmission System in Southern Region, in commercial operation since
1/12/1999. The petitioner has
also filed an interlocutory application (IA No.11/2000) for interim order
in its favour till determination of final tariff by the Commission and
disposal of the main petition.
It has been stated that construction of Kaiga Transmission system
for evacuation of central sector power from Kaiga Atomic Power Project,
Stage-I (Karnataka) was approved at the instance of Nuclear Power
Corporation Ltd., in 1994.
The system envisaged construction of 400 kV D/C Kaiga-Sirsi
transmission line connecting NPC’s switchyard at Kaiga APP and KPTCL’s
switchyard at Sirsi and PLCC substation equipment at Kaiga end.
The Board of Directors of PGCIL approved the capital cost of the
project of Rs.5365 lakhs including IDC of Rs.1109 lakhs in exercise of its
delegated powers. The
completion cost of the project has, however, been revised to
Rs.5752.73 lakhs . It
has also been stated that the estimated completion cost does not include
liability on account of compensatory afforestation cost, which if demanded
by the claimant would increase the capital cost of the project and
consequent liability of the respondents to pay higher tariff.
The project was to be commissioned in March 1999.
The representative of the petitioner submitted that the line was
ready by the end of May 1999 and was charge tested on 5/6/99, but was put
into commercial operation on 1/12/99.
He explained that KEB and NPC did not complete the works at the two
ends. The petitioner is
responsible for delay of about 2 months only.
As per the certificate dated 10/12/99, the total cost includes an
expenditure of Rs. 174.00 lakhs anticipated
up to 31.3.2000. The
representative of the petitioner informed that out of this, a further sum
of Rs.74 lakhs has also been spent since 10/12/99 and a sum of Rs.100
lakhs only is yet to be spent on the project.
He however did not produce any audited figures in support of his
claim. He submitted that all necessary works to put the system to
commercial use, excepting some minor civil works have been completed.
The petitioner discussed the tariff proposal for the said assets
with the respondents. It has been observed from the minutes of the meeting held on
28/2/2000 that representatives of KPTC,
TRANSCO and TNEB had participated in the meeting. It was decided in the meeting that in order to avoid
accumulation of arrears, SEBs would pay on provisional basis 80% of the
tariff calculated by the petitioner in respect of 400 kV D/C Kaiga-Sirsi
Transmission line and ICT-III at Nagarjunsagar.
KSEB did not participate in the meeting but had separately
communicated its consent to the proposal regarding payment of 80% of the
tariff on provisional basis.
Today the application for interim relief was listed for a hearing.
It was strenuously argued on behalf of the petitioner that it is entitled for
100% tariff on provisional basis. Even
at the meeting with the beneficiaries, petitioner had insisted for 100%
payment but had subsequently offered to accept 90% of the tariff on
provisional basis, subject to final determination of tariff by the
After considering the facts on record and submissions made by the
representatives of the parties present at the hearing, we find that it
would be just and fair to
allow the petitioner to raise bills for the system which is already under
commercial operation and is being utilised by the beneficiaries.
However, the claim of the petitioner to 100% of the tariff does not
seem to be justified because the entire project cost has not yet been
spent and according to petitioner’s own admission a sum of Rs.100 lakhs
is yet to be spent by 31.3.2001. Similarly, the contention of some of the
respondents that only 80% charges be allowed for the time being is not
justified. It has been stated
that payment over and above 80% will cause undue financial hardship to the
respondent. We are not
convinced by this argument advanced
on behalf of the respondents for the reason that they are making full use
of the system which is already in commercial operation.
Even otherwise, it would add to huge arrears that would be against
the interests of the beneficiaries themselves as also the petitioner.
Therefore we direct that the respondents shall pay 90% of the tariff
claimed by the petitioner in this petition on provisional basis subject to
adjustments of tariff, as may be finally determined by the Commission,
though the petitioner is at liberty to raise the bills for the full amount
calculated and claimed by it.
With the above directions IA No.11/2000 is disposed of.
We have found that the project was initially sanctioned at a cost
of Rs.5356 lakhs by the Board of Directors of the petitioner company under
its delegated powers. The estimated cost was subsequently revised to Rs.5753 lakhs
by the Board. We have been
informed that the respondents were not consulted while revising the cost
of the project. A number of
such other projects have come to our notice during the course of hearing
of the petitions for fixation of transmission tariff where the Board of
Directors of the petitioner company have unilaterally increased the cost
of the project without involving the beneficiaries.
We therefore direct the petitioner that it should evolve a
mechanism for consultation with the beneficiaries in case of upward
revision of the cost of the project since they have to bear the extra
burden on account of such an increase.