APTEL | Rejection of claim by the CERC under Regulation 14  of Tariff Regulations set aside for lack of justification

Appellate Tribunal for Electricity (APTEL): A Coram of Justice Manjula Chellur (Chairperson) and S.D. Dubey (Technical Member) allowed an appeal filed against an impugned order passed by the Central Electricity Regulatory Commission pertaining to Vindhyachal Super Thermal Power Station Stage-II of the appellant.

The appeal raises an objection as to whether the additional capital expenditure incurred towards installation of Continuous Emission Monitoring System (for short referred to as “CEMS”) and installation of CCTV Surveillance System should fall within the purport and import of Regulation 14 of the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations 2014 (hereinafter referred to as “Tariff Regulations of 2014/2014 Regulations”). CERC had disallowed the expenditure made towards installations. Thus, the instant appeal. The admitted facts were that Unit – I of Vindhyachal Stage –II achieved its Commercial Operation Date (COD) on 01-07-2000 and Unit –II of Vindhyachal Stage – II achieved its COD on 01-10-2000. On 06-04-2011, Ministry of Environment, Forest and Climate Change (MoEF&CC) had issued a Circular directing that the stack emission, as well as ambient air quality, had to be continuously monitored in respect of all thermal power plants in terms of notified standards. The 1st Respondent-CERC, in Petition No. 258 of 2009, the determined tariff for the Stage – II Vindhyachal on 26-12-2011 in terms of Tariff Regulations of 2009. CERC disallowed expenditure pertaining to monitoring system on the ground that no reference for installation of such system was indicated in the Environment Clearance/Consent issued by the concerned authority. However, on 02-02-2013 Central Industrial Security Force (CISF) issued a letter mandating that NTPC has to install CCTV in Stage – II unit and so also in Cable Gallery. According to the Appellant, the said expenditure was warranted on account of letter from MoEF&CC, which was obligatory in nature, therefore, the Appellant had to comply with the same.

The Tribunal while allowing the appeal set aside the impugned order stating that according to the joint inspections installation was a must and if the Commission was not satisfied with the information provided by the Appellant, they ought to have sought for further information which could have been provided thus there was no justification to reject the claim under Regulation 14 since the additional capital expenditure was incurred after cut-off date of the plant in question. [NTPC Ltd. v. CERC, 2020 SCC OnLine APTEL 1 , decided on 29-01-2020]

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