2020 [4] advocatemmmohan apex court cases 3
whether Tata Power Company LimitedDistribution (hereinafter, ‘TPC-D’) is entitled to levy wheeling charges for the power supplied to Hindustan Petroleum Corporation Limited (hereinafter, ‘HPCL’) and wheeling charges for the power sourced from Sai Wardha Power Generation Limited (hereinafter, ‘SWPGL’) through open access. ?
19. We are of the opinion that the judgment of the Tribunal is required to be set aside and that the matter should be remanded back for fresh consideration. Therefore, we are not expressing any opinion on the findings recorded by the Tribunal on interpretation of the provisions of the Electricity Act, 2003. As a matter of fact, the transmission licence issued to TPC-T includes 2x110 kV as part of the transmission system. Therefore, it is not open to TPC-T to contend that 2x110 kV line is a part of the distribution system of TPC-D till the transmission licence is modified. It is essential that the application filed by TPC-T for amendment of its transmission licence is decided first. If the application filed for amendment by TPC-T is allowed and reaches finality, the 2x110 kV lines will not form part of the transmission network. On the other hand, if the application of TPC-T for amendment of its licence is rejected, TPC-D cannot have a case for seeking inclusion of 2x110 kV lines in its distribution system for imposing wheeling charges on HPCL.
20. Therefore, we direct the Commission to decide the application filed by TPC-T for amendment of the transmission licence issued in the year 2014 expeditiously and not later than a period of two months from the date of resumption of work after the lockdown due to Corona Virus is lifted.
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.2228/2020
(@ Diary No .24669 of2019)
SAI WARDHA POWER GENERATION LIMITED.
.... Appellant(s)
Versus
THE TATA POWER COMPANY LIMITED DISTRIBUTION & ORS.
…. Respondent (s)
W I T H
Civil Appeal No .5049 of2019
J U D G M E N T
L. NAGESWARA RAO, J.
1. The question that arises for our consideration in these
Appeals is whether Tata Power Company LimitedDistribution (hereinafter, ‘TPC-D’) is entitled to levy
wheeling charges for the power supplied to Hindustan
Petroleum Corporation Limited (hereinafter, ‘HPCL’) and
wheeling charges for the power sourced from Sai Wardha
Power Generation Limited (hereinafter, ‘SWPGL’) through
open access. The Maharashtra Electricity Regulation
Commission (hereinafter, ‘the Commission’) allowed the
petition filed by HPCL and held that TPC-D is not entitled to
1 | P a g e
levy wheeling charges. Consequently, the Commission
directed TPC-D to refund the amounts collected from HPCL,
in the form of wheeling charges. The Appellate Tribunal for
Electricity allowed the appeal filed by TPC-D and set aside
the order of the Commission. Aggrieved thereby, the
SWPGL and HPCL have filed the above Appeals.
2. Tata Power Company Limited (TPC) was granted an
integrated licence for supply of electricity under the
provisions of the Indian Electricity Act, 1910. HPCL has
been receiving electricity from TPC on its 22 kV distribution
network since 1955. In 2005, HPCL augmented its oil
refining facility by installing additional units. HPCL
requested TPC to supply additional power to feed its load
requirement of 70 MW on 100 per cent redundancy basis.
The supply was required to be enhanced to extra high
voltage (EHV) level. A power supply agreement was
executed between TPC and HPCL on 20th October, 2005 for
providing power supply of 110 kV to HPCL’s expansion
project at Chembur. The actual supply of 70 MW power
started in the year 2008 after the construction of 2x110 kV
facility and the requisite regulatory approvals.
2 | P a g e
3. In the meanwhile, as per the directions of the
Commission, TPC trifurcated its assets and segregated
them into different entities for generation, transmission
and distribution for the purpose of accounting and tariff
determination in the year 2006. The Commission
determined separate tariffs for Tata Power Company
Limited-Generation, Tata Power Company LimitedTransmission and Tata Power Company Limited-Distribution
businesses for the first time on 03.10.2006. Thereafter,
separate tariffs were determined by the Commission for
Tata Power Company Limited-Generation, Tata Power
Company Limited-Transmission and Tata Power Company
Limited-Distribution. While approving the request for
construction of 2x110 kV lines for power supply of 70 MW
to HPCL on 16.10.2007, the Commission directed TPC that
the other consumers in the vicinity may also be supplied
power from the 2x110 kV distribution lines. By the tariff
order dated 04.06.2008, the Commission permitted the
capitalization of the 2x110 kV distribution lines in the
books of accounts of TPC-D. Undisputedly, HPCL has been
3 | P a g e
paying wheeling charges i.e. charges for the right to use of
the distribution network since 2008.
4. In the year 2014, TPC filed applications before the
Commission for grant of transmission licence and
distribution licence under the Electricity Act, 2003. On
17.04.2014, a representation was made by TPC classifying
2x110 kV lines as part of the transmission system and 33
kV and lower lines as part of the distribution system. The
Commission granted Transmission Licence No. 1 of 2014 to
Tata Power Company-Transmission (TPC-T) on 14.08.2014.
HPCL applied to TPC-D on 04.11.2015 for availing 21.02
MW short term open access for getting power as a group
active user from SWPGL which was approved by TPC-D.
HPCL executed a power purchase agreement with SWPGL
on 08.07.2016 with partial supply of electricity on open
access. HPCL sought approval of TPC-D for the use of its
distribution network.
5. On 10.10.2016, TPC-T filed an application before the
Commission for amendment of the transmission licence
No.1 of 2014. TPC-T stated in the said application that
inclusion of the 2x110 kV lines in its network is an
4 | P a g e
inadvertent error as the lines were always part of the
distribution system. Thereafter, HPCL filed a petition on
13.04.2017 before the Commission for a declaration that
TPC-D was not entitled to levy and collect wheeling charges
and wheeling losses on the supply of electricity through
open access on the 110 kV Trombay - HPCL lines 1 and 2
including the feeder lines. The Commission passed an
order on 12.03.2018 allowing the petition filed by HPCL
holding that TPC-D is not entitled to levy wheeling charges.
The said order was set aside by the Tribunal on 22.03.2018.
In the meanwhile, the Commission disallowed the
application filed by the TPC Transmission for modification of
Transmission Licence No. 1 of 2014 by an order dated
01.08.2018. The Appellate Tribunal set aside the order of
the Commission dated 01.08.2018, disallowing the
application for modification of the transmission license, and
remanded the matter back for fresh consideration.
6. The petition filed by HPCL was allowed by the
Commission by holding that 2x110 kV Trombay - HPCL lines
are part of the transmission system of TPC-T as per the
transmission licence issued on 14th August, 2014. As long
5 | P a g e
as the lines remained part of the transmission licence, the
TPC-D cannot claim wheeling charges as a distribution
licensee. The submission on behalf of the TPC-D that
2x110 kV lines should be considered as its distribution
assets was rejected by the Commission on the ground that
extra high voltage network of 66 kV and above have to be
treated as part of the transmission network. The
Commission held that the wheeling charges of TPC-D was
determined only for 11/22/33 kV lines. On the basis of the
principle of segregation between HT and EHT levels in
Maharashtra, the Commission held that EHV feeders
emanating from the Trombay generating station squarely
fall within the definition of transmission lines under Section
2 (72) of the Electricity Act, 2003. The Commission relied
upon the Central Electricity Authority (Technical Standards
for Construction of Electrical Plants and Electric Lines)
Regulations, 2010 (hereafter referred to as the ‘CEA
Regulations, 2010’) which demarcate distribution and
transmission boundaries on the basis of voltage levels. As
per the CEA Regulations 2010, voltage levels from 0.415 kV
to 33 kV are included under the distribution head and 66
6 | P a g e
kV to 765 kV AC and 500 kV DC voltage levels are included
under transmission head. On the basis of the above
findings, the Commission allowed the petition filed by HPCL
and directed TPC-D to refund the amounts collected from
HPCL on the said count.
7. The Appellate Tribunal framed two principal issues for
consideration which are as follows:
“Issue No.1: Whether the 110 kV HPCL feeders
are part of the Distribution system of TPC-D or can
qualify as transmission lines in terms of the
statutory framework and in the facts of the
present case?
Issue No.2: Whether the erroneous
submission of TPC-T regarding 110 kV HPCL
feeders in the transmission licence No.1 exempt
HPCL from payment of wheeling charges?”
8. By placing reliance on an earlier judgment of the
Tribunal dated 14.12.2012 in Orissa Power Transmission
Corporation Limited vs. Orissa Electricity Regulatory
Commission in Appeal No.30 of 2012, the Tribunal held that
7 | P a g e
the 110 kV HPCL feeders from Trombay Generation Station
Bus-Bar to HPCL installation at its premises for use of
electricity are an essential part of the TPC Distribution
system. The Tribunal observed that these feeders from
their inception were being used for supplying electricity to
HPCL. The Tribunal was also of the view that an
arrangement for stepping down electricity at consumers
installation cannot be treated as a ‘sub-station’ as defined
in Section 2 (69) of the Electricity Act. Following the
judgment in OPTCL, the Tribunal observed that there is no
embargo that the distribution network of a distribution
licensee cannot include a line of 110 kV voltage level.
Issue No.2 was also answered in favour of TPC-D. The
Tribunal declared that 110 kV feeders are integral part of
the distribution network of TPC-D and that on the basis of
voltage defined in the CEA Regulations 2010, the status of
the licence cannot be changed from distribution to
transmission. The Tribunal directed the Commission to redetermine the wheeling charges at EHT level 110 kV by
accepting the submission of HPCL that it was made to pay
higher wheeling charges.
8 | P a g e
9. We have heard Mr. Anand K. Ganesan, learned
counsel for SWPGL, Mr. Varun Pathak, learned counsel for
HPCL and Mr. Maninder Singh, learned Senior Counsel for
TPC-D.
10. TPC-D raised a preliminary objection relating to the
maintainability of the appeal filed by SWPGL on the ground
that it lacks locus standi. According to TPC-D, the dispute
essentially is between HPCL and TPC-D. SWPGL which has
stopped supplying power to HPCL on 30.09.2017 cannot be
permitted to challenge the order passed by the
Commission. HPCL has filed an appeal against the
judgment of the Tribunal which has to be adjudicated on
merits. Therefore, we have heard the learned counsel for
SWPGL as well.
11. It was contended on behalf of HPCL that 110 kV HPCL
line is a transmission line. The metering for HPCL is done
at TPC-D sub-station which is admittedly a transmission
asset. As a matter of fact, the sale of electricity is
completed at the TPC-D sub-station. It was argued that on
9 | P a g e
behalf of HPCL that a consumer can be connected directly
to a transmission network. HPCL submitted that the
judgment of the Tribunal in OPTCL is erroneous. Inclusion of
2x110 kV lines in the transmission assets by TPC-D is a
factor that cannot be ignored while deciding the
entitlement of TPC-D to impose wheeling charges by
treating the 2x110 kV lines as part of the distribution
system.
12. It was submitted on behalf of the SWPGL that there is
no prohibition or bar in the Electricity Act preventing a
consumer from being directly connected to the network of
a transmission licensee. Undisputedly, 2x110 kV Trombay -
HPCL lines have been declared to be part of transmission
assets by TPC-T. The plea of inadvertence taken by TPC-D
has to be rejected in view of availability of abundant
material. SWPGL referred to the roll out plan of the
distribution network made by TPC which deals only with
lines upto 33 kV. According to SWPGL, the capital
investment plans of distribution network also include only
11 kV and 33 kV voltage level lines. The learned counsel
10 | P a g e
appearing for SWPGL submitted that the order of the APTEL
is liable to be set aside.
13. On behalf of the TPC-D, it was argued that trifurcation
took place in the year 2005 and since then, tariff was being
determined separately for transmission and distribution.
HPCL has been paying wheeling charges till 2018. There is
no doubt that HPCL was receiving electricity from TPC-D’s
distribution network since 1955. Reliance was placed on
the tariff order dated 04.06.2008, wherein the Commission
permitted capitalization of 2x110 kV distribution lines in
books of accounts of TPC-D. It was argued on behalf of
TPC-D that no transmission charges have ever been
demanded or recovered for 110 kV assets. It was
contended that the application filed for amendment of the
transmission licence ought to have been decided by the
Commission before taking up the instant dispute. A
detailed submission was made on the network roll out plan
to submit that the plan was qua a broad basis of
consumers who are connected at 11kV/22kV/33kV and
lower voltage levels. It was submitted that the network
rolls out plan was only towards development of network
11 | P a g e
backbone which is generally at levels below 33 kV. It was
further urged on behalf of the TPC-D that the 110 kV lines
were always treated as a distribution asset and it was only
due to inadvertence that they were included in the
transmission license in 2014.
14. The basis for the order of the Commission dated
12.03.2018, allowing the petition filed by the HPCL is twofold. Firstly, the Commission held that transmission
licence was granted to TPC-T on 14.08.2014, in which the
two110 kV Trombay - HPCL lines were shown as a part of
TPC-T. The Commission observed that as long as the lines
remained part of the transmission licence, TPC-D cannot
claim wheeling charges. The Commission further observed
that HPCL is directly connected to 110 kV transmission
system in terms of TPC-T’s transmission licence and not to
the distribution network of TPC-D. The Commission
remarked that mere filing of a petition by TPC-T for
amendment of its transmission licence does not entitle
TPC-D to levy wheeling charges. The Commission further
referred to the submission of TPC-D in case No.47 of 2016
that the assets of TPC-D do not include any part of TPC’s
12 | P a g e
transmission network. The submission of TPC-D relating
to the inadvertent error in showing 2x110 kV lines in the
transmission network was rejected.
15. Secondly, the Commission relied upon an E-mail of
the Maharashtra State Load Despatch Centre (MSLDC)
dated 11.12.2015 addressed to SWPGL in which it was
stated that no wheeling charges can be levied on HPCL as
it was connected at 110 kV level. The Commission referred
to the CEA Regulations, 2010 and Central Electricity
Authority’s Manual on Transmission Planning Criteria) 2013
and Maharashtra Electricity Regulatory Commission
(Transmission Open Access) Regulations, 2016 to hold that
all lines up to 33 kV shall be part of the distribution system
and those above 33 kV form part of transmission lines.
16. The order of the Commission was set aside by the
Tribunal. The Tribunal observed that 2x110 kV HPCL feeder
was being used for supplying electricity since inception and
hence it is an integral part of TPC-D system. By placing
reliance on a judgment in OPTCL, the Tribunal held that
HPCL cannot receive power supply directly from TPC-T.
13 | P a g e
The Tribunal further held that there is no embargo on the
inclusion of the 2x110 kV lines in the distribution network
and distribution can be undertaken at high voltage levels
forming high voltage distribution system. While answering
the second point, the Tribunal held that a consumer can
directly be connected to the works of a transmission
licensee. However, in the instant case, HPCL was paying
wheeling charges from a long time to TPC-D. Hence, the
2x110 kV lines are part of the distribution system of TPC-D.
Further, the Technical Regulations framed by the CEA
defining level of voltage for distribution and transmission
heads were held to be generic in nature by the Tribunal.
17. Admittedly, separate licenses for transmission and
distribution to TPC-T and TPC-D respectively were granted
in 2014. There is no dispute that TPC-T included the 2x110
kV lines in its transmission assets. The network roll out
plan submitted by TPC-D included lines upto 33 kV in its
distribution network. An application was filed by TPC-T for
amendment of the licence which is pending before the
Commission, following the remand by the Tribunal. The
Tribunal did not advert to the application filed by TPC-T for
14 | P a g e
amendment of the transmission licence. The Tribunal also
did not refer to its order by which it set aside the order of
the Commission disallowing the application for amendment
of the transmission license and remanded the matter back
to the Commission. The Tribunal committed an error in
ignoring the existing transmission licence of TPC-T before
coming to a conclusion that 2x110 kV lines are part of the
distribution network. The Tribunal ought to have directed
the Commission to adjudicate the application filed by TPC-T
for amendment of the transmission licence. Thereafter, the
Tribunal should have decided an appeal, if any, filed
against the decision of the Commission on the application
for amendment before taking up the appeal filed by TPC-T
against the order of Commission dated 12.03.2018. The
Tribunal stressed on the fact that HPCL was receiving
power from TPC-D from a very long time for which reason,
the 2x110 kV lines should form part of the distribution
system of the TPC-D. The Tribunal was wrong in not taking
note of the application filed by TPC-T for amendment of its
transmission licence in which the 2x110 kV lines were
included in the transmission network. Till the transmission
15 | P a g e
licence of TPC-T is not modified, the 2x110 kV lines form
part of the transmission network of TPC-T. The Tribunal
could not have held that 2x110 kV lines should be included
in the distribution system of TPC-D.
18. The CEA Regulations 2010, the Maharashtra
Electricity Regulatory Commission (Transmission Open
Access) Regulations, 2016 and the Maharashtra Electricity
Regulatory Commission (Distribution Open Access)
Regulations, 2016 provide for demarcation between the
transmission and distribution boundaries on the basis of
voltage. The Tribunal erred in ignoring the said Regulations
while holding that 2x110 kV lines are part of the
distribution system.
19. We are of the opinion that the judgment of the
Tribunal is required to be set aside and that the matter
should be remanded back for fresh consideration.
Therefore, we are not expressing any opinion on the
findings recorded by the Tribunal on interpretation of the
provisions of the Electricity Act, 2003. As a matter of fact,
the transmission licence issued to TPC-T includes 2x110 kV
16 | P a g e
lines as part of the transmission system. Therefore, it is not
open to TPC-T to contend that 2x110 kV line is a part of the
distribution system of TPC-D till the transmission licence is
modified. It is essential that the application filed by TPC-T
for amendment of its transmission licence is decided first.
If the application filed for amendment by TPC-T is allowed
and reaches finality, the 2x110 kV lines will not form part
of the transmission network. On the other hand, if the
application of TPC-T for amendment of its licence is
rejected, TPC-D cannot have a case for seeking inclusion of
2x110 kV lines in its distribution system for imposing
wheeling charges on HPCL.
20. Therefore, we direct the Commission to decide the
application filed by TPC-T for amendment of the
transmission licence issued in the year 2014 expeditiously
and not later than a period of two months from the date of
resumption of work after the lockdown due to Corona Virus
is lifted. The appeal, if any, filed by the aggrieved party
shall be decided by the Tribunal within a period of three
months from the date of filing. Thereafter, the Tribunal
shall take up Appeal No.84 of 2018.
17 | P a g e
21. For the aforementioned reasons, we set aside the
judgment of the Tribunal and remit Appeal No.84 of 2018 to
the Tribunal for fresh adjudication.
................................J.
[L. NAGESWARA RAO]
................................J.
[DEEPAK GUPTA]
New Delhi,
April 03, 2020.
18 | P a g e
whether Tata Power Company LimitedDistribution (hereinafter, ‘TPC-D’) is entitled to levy wheeling charges for the power supplied to Hindustan Petroleum Corporation Limited (hereinafter, ‘HPCL’) and wheeling charges for the power sourced from Sai Wardha Power Generation Limited (hereinafter, ‘SWPGL’) through open access. ?
19. We are of the opinion that the judgment of the Tribunal is required to be set aside and that the matter should be remanded back for fresh consideration. Therefore, we are not expressing any opinion on the findings recorded by the Tribunal on interpretation of the provisions of the Electricity Act, 2003. As a matter of fact, the transmission licence issued to TPC-T includes 2x110 kV as part of the transmission system. Therefore, it is not open to TPC-T to contend that 2x110 kV line is a part of the distribution system of TPC-D till the transmission licence is modified. It is essential that the application filed by TPC-T for amendment of its transmission licence is decided first. If the application filed for amendment by TPC-T is allowed and reaches finality, the 2x110 kV lines will not form part of the transmission network. On the other hand, if the application of TPC-T for amendment of its licence is rejected, TPC-D cannot have a case for seeking inclusion of 2x110 kV lines in its distribution system for imposing wheeling charges on HPCL.
20. Therefore, we direct the Commission to decide the application filed by TPC-T for amendment of the transmission licence issued in the year 2014 expeditiously and not later than a period of two months from the date of resumption of work after the lockdown due to Corona Virus is lifted.
Non-Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
Civil Appeal No.2228/2020
(@ Diary No .24669 of2019)
SAI WARDHA POWER GENERATION LIMITED.
.... Appellant(s)
Versus
THE TATA POWER COMPANY LIMITED DISTRIBUTION & ORS.
…. Respondent (s)
W I T H
Civil Appeal No .5049 of2019
J U D G M E N T
L. NAGESWARA RAO, J.
1. The question that arises for our consideration in these
Appeals is whether Tata Power Company LimitedDistribution (hereinafter, ‘TPC-D’) is entitled to levy
wheeling charges for the power supplied to Hindustan
Petroleum Corporation Limited (hereinafter, ‘HPCL’) and
wheeling charges for the power sourced from Sai Wardha
Power Generation Limited (hereinafter, ‘SWPGL’) through
open access. The Maharashtra Electricity Regulation
Commission (hereinafter, ‘the Commission’) allowed the
petition filed by HPCL and held that TPC-D is not entitled to
1 | P a g e
levy wheeling charges. Consequently, the Commission
directed TPC-D to refund the amounts collected from HPCL,
in the form of wheeling charges. The Appellate Tribunal for
Electricity allowed the appeal filed by TPC-D and set aside
the order of the Commission. Aggrieved thereby, the
SWPGL and HPCL have filed the above Appeals.
2. Tata Power Company Limited (TPC) was granted an
integrated licence for supply of electricity under the
provisions of the Indian Electricity Act, 1910. HPCL has
been receiving electricity from TPC on its 22 kV distribution
network since 1955. In 2005, HPCL augmented its oil
refining facility by installing additional units. HPCL
requested TPC to supply additional power to feed its load
requirement of 70 MW on 100 per cent redundancy basis.
The supply was required to be enhanced to extra high
voltage (EHV) level. A power supply agreement was
executed between TPC and HPCL on 20th October, 2005 for
providing power supply of 110 kV to HPCL’s expansion
project at Chembur. The actual supply of 70 MW power
started in the year 2008 after the construction of 2x110 kV
facility and the requisite regulatory approvals.
2 | P a g e
3. In the meanwhile, as per the directions of the
Commission, TPC trifurcated its assets and segregated
them into different entities for generation, transmission
and distribution for the purpose of accounting and tariff
determination in the year 2006. The Commission
determined separate tariffs for Tata Power Company
Limited-Generation, Tata Power Company LimitedTransmission and Tata Power Company Limited-Distribution
businesses for the first time on 03.10.2006. Thereafter,
separate tariffs were determined by the Commission for
Tata Power Company Limited-Generation, Tata Power
Company Limited-Transmission and Tata Power Company
Limited-Distribution. While approving the request for
construction of 2x110 kV lines for power supply of 70 MW
to HPCL on 16.10.2007, the Commission directed TPC that
the other consumers in the vicinity may also be supplied
power from the 2x110 kV distribution lines. By the tariff
order dated 04.06.2008, the Commission permitted the
capitalization of the 2x110 kV distribution lines in the
books of accounts of TPC-D. Undisputedly, HPCL has been
3 | P a g e
paying wheeling charges i.e. charges for the right to use of
the distribution network since 2008.
4. In the year 2014, TPC filed applications before the
Commission for grant of transmission licence and
distribution licence under the Electricity Act, 2003. On
17.04.2014, a representation was made by TPC classifying
2x110 kV lines as part of the transmission system and 33
kV and lower lines as part of the distribution system. The
Commission granted Transmission Licence No. 1 of 2014 to
Tata Power Company-Transmission (TPC-T) on 14.08.2014.
HPCL applied to TPC-D on 04.11.2015 for availing 21.02
MW short term open access for getting power as a group
active user from SWPGL which was approved by TPC-D.
HPCL executed a power purchase agreement with SWPGL
on 08.07.2016 with partial supply of electricity on open
access. HPCL sought approval of TPC-D for the use of its
distribution network.
5. On 10.10.2016, TPC-T filed an application before the
Commission for amendment of the transmission licence
No.1 of 2014. TPC-T stated in the said application that
inclusion of the 2x110 kV lines in its network is an
4 | P a g e
inadvertent error as the lines were always part of the
distribution system. Thereafter, HPCL filed a petition on
13.04.2017 before the Commission for a declaration that
TPC-D was not entitled to levy and collect wheeling charges
and wheeling losses on the supply of electricity through
open access on the 110 kV Trombay - HPCL lines 1 and 2
including the feeder lines. The Commission passed an
order on 12.03.2018 allowing the petition filed by HPCL
holding that TPC-D is not entitled to levy wheeling charges.
The said order was set aside by the Tribunal on 22.03.2018.
In the meanwhile, the Commission disallowed the
application filed by the TPC Transmission for modification of
Transmission Licence No. 1 of 2014 by an order dated
01.08.2018. The Appellate Tribunal set aside the order of
the Commission dated 01.08.2018, disallowing the
application for modification of the transmission license, and
remanded the matter back for fresh consideration.
6. The petition filed by HPCL was allowed by the
Commission by holding that 2x110 kV Trombay - HPCL lines
are part of the transmission system of TPC-T as per the
transmission licence issued on 14th August, 2014. As long
5 | P a g e
as the lines remained part of the transmission licence, the
TPC-D cannot claim wheeling charges as a distribution
licensee. The submission on behalf of the TPC-D that
2x110 kV lines should be considered as its distribution
assets was rejected by the Commission on the ground that
extra high voltage network of 66 kV and above have to be
treated as part of the transmission network. The
Commission held that the wheeling charges of TPC-D was
determined only for 11/22/33 kV lines. On the basis of the
principle of segregation between HT and EHT levels in
Maharashtra, the Commission held that EHV feeders
emanating from the Trombay generating station squarely
fall within the definition of transmission lines under Section
2 (72) of the Electricity Act, 2003. The Commission relied
upon the Central Electricity Authority (Technical Standards
for Construction of Electrical Plants and Electric Lines)
Regulations, 2010 (hereafter referred to as the ‘CEA
Regulations, 2010’) which demarcate distribution and
transmission boundaries on the basis of voltage levels. As
per the CEA Regulations 2010, voltage levels from 0.415 kV
to 33 kV are included under the distribution head and 66
6 | P a g e
kV to 765 kV AC and 500 kV DC voltage levels are included
under transmission head. On the basis of the above
findings, the Commission allowed the petition filed by HPCL
and directed TPC-D to refund the amounts collected from
HPCL on the said count.
7. The Appellate Tribunal framed two principal issues for
consideration which are as follows:
“Issue No.1: Whether the 110 kV HPCL feeders
are part of the Distribution system of TPC-D or can
qualify as transmission lines in terms of the
statutory framework and in the facts of the
present case?
Issue No.2: Whether the erroneous
submission of TPC-T regarding 110 kV HPCL
feeders in the transmission licence No.1 exempt
HPCL from payment of wheeling charges?”
8. By placing reliance on an earlier judgment of the
Tribunal dated 14.12.2012 in Orissa Power Transmission
Corporation Limited vs. Orissa Electricity Regulatory
Commission in Appeal No.30 of 2012, the Tribunal held that
7 | P a g e
the 110 kV HPCL feeders from Trombay Generation Station
Bus-Bar to HPCL installation at its premises for use of
electricity are an essential part of the TPC Distribution
system. The Tribunal observed that these feeders from
their inception were being used for supplying electricity to
HPCL. The Tribunal was also of the view that an
arrangement for stepping down electricity at consumers
installation cannot be treated as a ‘sub-station’ as defined
in Section 2 (69) of the Electricity Act. Following the
judgment in OPTCL, the Tribunal observed that there is no
embargo that the distribution network of a distribution
licensee cannot include a line of 110 kV voltage level.
Issue No.2 was also answered in favour of TPC-D. The
Tribunal declared that 110 kV feeders are integral part of
the distribution network of TPC-D and that on the basis of
voltage defined in the CEA Regulations 2010, the status of
the licence cannot be changed from distribution to
transmission. The Tribunal directed the Commission to redetermine the wheeling charges at EHT level 110 kV by
accepting the submission of HPCL that it was made to pay
higher wheeling charges.
8 | P a g e
9. We have heard Mr. Anand K. Ganesan, learned
counsel for SWPGL, Mr. Varun Pathak, learned counsel for
HPCL and Mr. Maninder Singh, learned Senior Counsel for
TPC-D.
10. TPC-D raised a preliminary objection relating to the
maintainability of the appeal filed by SWPGL on the ground
that it lacks locus standi. According to TPC-D, the dispute
essentially is between HPCL and TPC-D. SWPGL which has
stopped supplying power to HPCL on 30.09.2017 cannot be
permitted to challenge the order passed by the
Commission. HPCL has filed an appeal against the
judgment of the Tribunal which has to be adjudicated on
merits. Therefore, we have heard the learned counsel for
SWPGL as well.
11. It was contended on behalf of HPCL that 110 kV HPCL
line is a transmission line. The metering for HPCL is done
at TPC-D sub-station which is admittedly a transmission
asset. As a matter of fact, the sale of electricity is
completed at the TPC-D sub-station. It was argued that on
9 | P a g e
behalf of HPCL that a consumer can be connected directly
to a transmission network. HPCL submitted that the
judgment of the Tribunal in OPTCL is erroneous. Inclusion of
2x110 kV lines in the transmission assets by TPC-D is a
factor that cannot be ignored while deciding the
entitlement of TPC-D to impose wheeling charges by
treating the 2x110 kV lines as part of the distribution
system.
12. It was submitted on behalf of the SWPGL that there is
no prohibition or bar in the Electricity Act preventing a
consumer from being directly connected to the network of
a transmission licensee. Undisputedly, 2x110 kV Trombay -
HPCL lines have been declared to be part of transmission
assets by TPC-T. The plea of inadvertence taken by TPC-D
has to be rejected in view of availability of abundant
material. SWPGL referred to the roll out plan of the
distribution network made by TPC which deals only with
lines upto 33 kV. According to SWPGL, the capital
investment plans of distribution network also include only
11 kV and 33 kV voltage level lines. The learned counsel
10 | P a g e
appearing for SWPGL submitted that the order of the APTEL
is liable to be set aside.
13. On behalf of the TPC-D, it was argued that trifurcation
took place in the year 2005 and since then, tariff was being
determined separately for transmission and distribution.
HPCL has been paying wheeling charges till 2018. There is
no doubt that HPCL was receiving electricity from TPC-D’s
distribution network since 1955. Reliance was placed on
the tariff order dated 04.06.2008, wherein the Commission
permitted capitalization of 2x110 kV distribution lines in
books of accounts of TPC-D. It was argued on behalf of
TPC-D that no transmission charges have ever been
demanded or recovered for 110 kV assets. It was
contended that the application filed for amendment of the
transmission licence ought to have been decided by the
Commission before taking up the instant dispute. A
detailed submission was made on the network roll out plan
to submit that the plan was qua a broad basis of
consumers who are connected at 11kV/22kV/33kV and
lower voltage levels. It was submitted that the network
rolls out plan was only towards development of network
11 | P a g e
backbone which is generally at levels below 33 kV. It was
further urged on behalf of the TPC-D that the 110 kV lines
were always treated as a distribution asset and it was only
due to inadvertence that they were included in the
transmission license in 2014.
14. The basis for the order of the Commission dated
12.03.2018, allowing the petition filed by the HPCL is twofold. Firstly, the Commission held that transmission
licence was granted to TPC-T on 14.08.2014, in which the
two110 kV Trombay - HPCL lines were shown as a part of
TPC-T. The Commission observed that as long as the lines
remained part of the transmission licence, TPC-D cannot
claim wheeling charges. The Commission further observed
that HPCL is directly connected to 110 kV transmission
system in terms of TPC-T’s transmission licence and not to
the distribution network of TPC-D. The Commission
remarked that mere filing of a petition by TPC-T for
amendment of its transmission licence does not entitle
TPC-D to levy wheeling charges. The Commission further
referred to the submission of TPC-D in case No.47 of 2016
that the assets of TPC-D do not include any part of TPC’s
12 | P a g e
transmission network. The submission of TPC-D relating
to the inadvertent error in showing 2x110 kV lines in the
transmission network was rejected.
15. Secondly, the Commission relied upon an E-mail of
the Maharashtra State Load Despatch Centre (MSLDC)
dated 11.12.2015 addressed to SWPGL in which it was
stated that no wheeling charges can be levied on HPCL as
it was connected at 110 kV level. The Commission referred
to the CEA Regulations, 2010 and Central Electricity
Authority’s Manual on Transmission Planning Criteria) 2013
and Maharashtra Electricity Regulatory Commission
(Transmission Open Access) Regulations, 2016 to hold that
all lines up to 33 kV shall be part of the distribution system
and those above 33 kV form part of transmission lines.
16. The order of the Commission was set aside by the
Tribunal. The Tribunal observed that 2x110 kV HPCL feeder
was being used for supplying electricity since inception and
hence it is an integral part of TPC-D system. By placing
reliance on a judgment in OPTCL, the Tribunal held that
HPCL cannot receive power supply directly from TPC-T.
13 | P a g e
The Tribunal further held that there is no embargo on the
inclusion of the 2x110 kV lines in the distribution network
and distribution can be undertaken at high voltage levels
forming high voltage distribution system. While answering
the second point, the Tribunal held that a consumer can
directly be connected to the works of a transmission
licensee. However, in the instant case, HPCL was paying
wheeling charges from a long time to TPC-D. Hence, the
2x110 kV lines are part of the distribution system of TPC-D.
Further, the Technical Regulations framed by the CEA
defining level of voltage for distribution and transmission
heads were held to be generic in nature by the Tribunal.
17. Admittedly, separate licenses for transmission and
distribution to TPC-T and TPC-D respectively were granted
in 2014. There is no dispute that TPC-T included the 2x110
kV lines in its transmission assets. The network roll out
plan submitted by TPC-D included lines upto 33 kV in its
distribution network. An application was filed by TPC-T for
amendment of the licence which is pending before the
Commission, following the remand by the Tribunal. The
Tribunal did not advert to the application filed by TPC-T for
14 | P a g e
amendment of the transmission licence. The Tribunal also
did not refer to its order by which it set aside the order of
the Commission disallowing the application for amendment
of the transmission license and remanded the matter back
to the Commission. The Tribunal committed an error in
ignoring the existing transmission licence of TPC-T before
coming to a conclusion that 2x110 kV lines are part of the
distribution network. The Tribunal ought to have directed
the Commission to adjudicate the application filed by TPC-T
for amendment of the transmission licence. Thereafter, the
Tribunal should have decided an appeal, if any, filed
against the decision of the Commission on the application
for amendment before taking up the appeal filed by TPC-T
against the order of Commission dated 12.03.2018. The
Tribunal stressed on the fact that HPCL was receiving
power from TPC-D from a very long time for which reason,
the 2x110 kV lines should form part of the distribution
system of the TPC-D. The Tribunal was wrong in not taking
note of the application filed by TPC-T for amendment of its
transmission licence in which the 2x110 kV lines were
included in the transmission network. Till the transmission
15 | P a g e
licence of TPC-T is not modified, the 2x110 kV lines form
part of the transmission network of TPC-T. The Tribunal
could not have held that 2x110 kV lines should be included
in the distribution system of TPC-D.
18. The CEA Regulations 2010, the Maharashtra
Electricity Regulatory Commission (Transmission Open
Access) Regulations, 2016 and the Maharashtra Electricity
Regulatory Commission (Distribution Open Access)
Regulations, 2016 provide for demarcation between the
transmission and distribution boundaries on the basis of
voltage. The Tribunal erred in ignoring the said Regulations
while holding that 2x110 kV lines are part of the
distribution system.
19. We are of the opinion that the judgment of the
Tribunal is required to be set aside and that the matter
should be remanded back for fresh consideration.
Therefore, we are not expressing any opinion on the
findings recorded by the Tribunal on interpretation of the
provisions of the Electricity Act, 2003. As a matter of fact,
the transmission licence issued to TPC-T includes 2x110 kV
16 | P a g e
lines as part of the transmission system. Therefore, it is not
open to TPC-T to contend that 2x110 kV line is a part of the
distribution system of TPC-D till the transmission licence is
modified. It is essential that the application filed by TPC-T
for amendment of its transmission licence is decided first.
If the application filed for amendment by TPC-T is allowed
and reaches finality, the 2x110 kV lines will not form part
of the transmission network. On the other hand, if the
application of TPC-T for amendment of its licence is
rejected, TPC-D cannot have a case for seeking inclusion of
2x110 kV lines in its distribution system for imposing
wheeling charges on HPCL.
20. Therefore, we direct the Commission to decide the
application filed by TPC-T for amendment of the
transmission licence issued in the year 2014 expeditiously
and not later than a period of two months from the date of
resumption of work after the lockdown due to Corona Virus
is lifted. The appeal, if any, filed by the aggrieved party
shall be decided by the Tribunal within a period of three
months from the date of filing. Thereafter, the Tribunal
shall take up Appeal No.84 of 2018.
17 | P a g e
21. For the aforementioned reasons, we set aside the
judgment of the Tribunal and remit Appeal No.84 of 2018 to
the Tribunal for fresh adjudication.
................................J.
[L. NAGESWARA RAO]
................................J.
[DEEPAK GUPTA]
New Delhi,
April 03, 2020.
18 | P a g e
