Appellate Tribunal for Electricity: In an appeal filed by Solar Energy Corporation of India Limited (‘SECI’) challenging the order dated 19-03-2021 passed by the Uttar Pradesh Electricity Regulatory Commission (‘UPERC’), wherein UPERC gave approval for procurement of power, subject to protection of pooled tariff by making adjustment in the trading margin of SECI, the two-member bench of Ramesh Ranganathan, J. (Chairperson) and Sandesh Kumar Sharma* (Technical Member) held that the Trading margin shall be Rs. 0.07/ kWh as mutually agreed between SECI and Uttar Pradesh Power Corporation Limited (‘UPPCL’) under the Power Sale Agreement (‘PSA’). Further, it set aside the order dated 19-03-2021 of the UPERC, to this extent, accordingly.
The Tribunal took note of the guidelines notified by the Government of India under Section 63 of the Electricity Act, 2003 and the CERC (Procedure, Terms and Conditions for grant of trading licence and other regulated matters), Regulations, 2020, and said that the Appropriate Commission, the trading margin shall be as decided / agreed mutually by the SECI, the trading licensee and the Wind Power Projects (‘WPPs’) and in turn by the distribution licensees.
The Tribunal noted that the Request for Selection document for the selection of the Wind Power Developers (‘WPDs’) defines trading margin as, the trading margin mutually agreed between buying entities and the SECI or as decided by Central Electricity Regulatory Commission for long-term power purchase, whichever is less, whereas the PSA signed between the SECI and the UPPCL, also approved by the State Commission.
The Tribunal said that the mutually agreed trading margin between SECI and UPPCL is Rs. 0.07/kWh and thus is the trading margin in accordance with the Guidelines and the relevant Regulations notified by the Appropriate Commission (CERC in the present case).
The Tribunal held that UPERC has no jurisdiction in reviewing or modifying the tariff adopted by the Central Commission and have no jurisdiction over the trading margin, which is to be mutually decided by the SECI and UPPCL in accordance with the relevant CERC Regulations and the PSA signed between SECI and UPPCL, which was already agreed to Rs. 0.07/kWh.
The Tribunal found the UPERC’s observations to be unjust and unreasonable that the parties have agreed to weighted average tariff and not individual tariff and therefore, the pooled tariff agreed in the PSA should be protected by making suitable adjustment to the trading margin by SECI, as the tariff at which power is to be supplied by SECI to UPPCL under the back to back arrangement is the tariff determined/ adopted by the Central Commission, which has determined the tariff on individual WPP basis.
Further, it held that the buying entity shall pay the tariff in accordance with the average tariff determined by considering the tariff of individual WPP commissioned and the cumulative capacity as awarded/ accepted by SECI, which is subject to change. However, the maximum tariff which buyers are required to pay is capped at Rs. 2.83/ kWh and the trading margin shall remain constant at Rs. 0.07/kWh irrespective of the pooled tariff.
[Solar Energy Corporation of India Limited v. Uttar Pradesh Electricity Regulatory Commission, 2023 SCC OnLine APTEL 21, decided on 06-07-2023]
*Judgment Authored by: Sandesh Kumar Sharma (Technical Member)
Advocates who appeared in this case :
Counsel for the Appellant(s): Senior Advocate M.G. Ramachandran, Advocate Anushree Bardhan, Advocate Tanya Sareen, Advocate Srishti Khindaria, Advocate Shikha Sood, Advocate Aneesh Bajaj, Advocate Surbhi Kapoor, Advocate Anshu Bajaj;
Counsel for the Respondent(s): Advocate C.K. Rai, Advocate Sumit Panwar, Advocate Ankit Bhandari, Advocate Aditya K. Singh, Advocate Anukriti Jain, Advocate Pratiksha Chaturvedi, Advocate Vineet Kumar.
