IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A.No. APPEAL No.

Between TAMILNADU SPINNING MILLS ASSOCIATION #2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001 Tamilnadu, Represented by Dr.K.Venkatachalam Chief Advisor, Versus 1.TAMIL NADU ELECTRICITY REGULATORY COMMISSION, 19-A, Rukumini Lakshmipathy Salai, Egmore, Chennai 600 008. 2. TAMILNADU GENERATION AND DISTRIBUTION CORPORATION LTD 144, Anna Salai, Chennai 600 002. represented by its Chairman and Managing Director, 3.TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, RESPONDENTS PAPER BOOK ADVOCATE FOR THE APPELLANT: Mr.R.S.PANDIYARAJ APPELLANT of 2012 OF 2012

INDEX Sl.No. I II III IV 1. Date Particulars Synopsis and List of Dates and Events Appeal with Affidavit Application for Interim Stay with Affidavit List of Enclosures TNERC-Power procurement from New and Renewable Sources of 2. 3. 4. 5. 6. 7. 08.04.2011 08.09.2011 29.09.2011 15.12.2011 24.05.2012 04.06.2012 Energy Regulations, 2008 Tariff Order No.1 of 2011 of 1st Respondent Public Notice of 1st Respondent Comments filed by the Appellant in pursuance of the Public Notice Tariff Order No.4 of 2011 of 1st Respondent Notice fixing the Stakeholders Hearing on 8th June 2012 Letter of the 1st Respondent Commission sent to the Appellant intimating no Consultative Paper 8. 08.06.2012 would be released Written Submission filed during the Stakeholders Hearing on 9. 10. 30.06.2012 31.07.2012 08.06.2012 by the Appellant Order No.3 of 2012 of the 1st Respondent The Impugned Order of the 1st Respondent Tamilnadu Regulatory 11. 12. . 08.2012 30.08.2012 Commission in T.R.No.6 of 2012 Working Instruction issued by the 2nd Respondent TANGEDCO Memo of 2nd Respondent providing instructions to withdraw deemed 13. 24.09.2012 demand concept Model Demand raised by the SE of 2nd Respondent based on the V working instruction Vakalathnama Page

08.02.2008

OPENING SHEET

Relief sought briefly & accurately Appeal/A F R.No. of 2012 for Date of Filing/201 2 Appellant Respondent s Counsel of Appellant DD Detail s permanent record purpose with provisions of law involved Tamilnadu Spinning 13.09.2012 Mills Associatio n 1)Tamilnadu Electricity Regulatory Commission and others R.S.Pandiyar aj

SYNOPSIS A. The Appellant is an Association of yarn spinning mills having member strength of 501 spinning mills and all of them are HT electricity consumers in the State of Tamil Nadu. The Appellant had earlier filed Petitions before various fora on issues relating to the rights of its members in the Electricity Sector including the Hon'ble Tribunal.

B. The First Respondent is the Tamil Nadu Electricity Regulatory Commission (Commission) who has issued the impugned Order. C. The Second Respondent is Tamilandu Generation and Distribution Corporation Ltd. (TANGEDCO) who has issued subsequent working instructions based on the impugned Order. D. The 3rd Respondent is the Tamilnadu Transmission Corporation Ltd (TANTRANSCO) who has strong interests in the appealed matters. E. The First Respondent issued the impugned Comprehensive Tariff Order on Wind Energy in TR No. 6 of 2012 on 31.07.2012 covering tariff and other various matters relating to wind energy and it is to be enforced by the 2 nd Respondent as far as the members of the Petitioners Association, who are having windmills and such other windmill owners in the State of Tamilnadu. F. The tariff fixation exercise was initially handled by the Tamilnadu Electricity Board (TNEB) for the wind energy generators in the State of Tamilnadu. Thereafter coming in to force of Electricity Act 2003, as the powers to regulate Tariff and other related issues for NCES based industries are vested with the State Regulatory Commissions, the 1st Respondent has started these exercises and accordingly, they were periodically being taken up by the Respondent Commission. Accordingly, the first Order of the Commission was passed on 15.05.2006 in Order No. 3 of 2006. Thereafter another Order was passed in Order No. 1 of 2009 dated 20.03.2009 which has to expire on 31.03.2011 in the normal course. However, owing to reasons attributable to the 1st Respondent Commission, the next Order was not passed when it was due. Instead three extensions have been ordered by the Respondent Commission extending the Order dated 20.03.2009 for three spells namely from 01.04.2011 to 31.12.2011, from 01.01.2012 to 30.06.2012 and from 01.07.2012 to 31.07.2012. Finally the impugned Order was passed on 31.07.2012. G. After the receipt of the impugned Order dated 31.07.2012 from the Respondent Commission, the 2nd Respondent started issuing the working instructions as how the impugned order should be implemented in various spheres. H. The Respondent Commission has issued the impugned order on 31.07.2012, under the powers vested under Section 61 of the Electricity Act

2003, notifying various procedures to be followed in the case of wind energy generators in the State both for selling to 2nd Respondent and for those consuming their power for their own captive purposes.

I. As per the Impugned Order, from 01.08.2012 onwards, if any WEG (Wind Energy Generator) is newly installing in the State of Tamilnadu and wants to sell its power to the 2nd Respondent, it is eligible to claim a tariff of Rs.3.51 per unit under non REC Scheme. Inter-alia for those who are already in agreement with the 2nd Respondent for making use of the wind energy for their captive purposes drastic changes have been ordered in the impugned Order dated 31.07.2012 without the authority of law. The Impugned Order has taken out the privileges and promises so far made available to the captive consumers of wind energy as per the orders dated 15.05.2006 and 20.03.2009 by which they are covered. J. Therefore, the impugned Order dated 31.07.2012 passed by the 1st Respondent in Order No. 6 of 2012 in so far as it is made applicable to even the existing WEGs, needs to be set aside in total and to the extent submitted below under the following grounds. K. The said impugned Order dated 31.07.2012 is therefore, under challenge before this Hon'ble Tribunal in the present Appeal. LIST OF DATES AND EVENTS

S.No.

Date

Event Policy announcement was made by the

1.

01.01.1994 Ministry of Non-Conventional Energy Sources, Government of India on remunerative tariff for non-conventional energy sources Government of India issued guidelines for

2. 3. 4.

25.11.1994 fixation of Purchase Price for Power Produced from Non-Conventional Energy 10.06.2003 Electricity Act 2003 is brought into force National Electricity Policy was issued pursuant 12.02.2005 to the provisions of the Electricity Act, 2003 which suggested providing promotional measures for increasing capacities in nonconventional sources based energy production Tariff Order No. 3 of 2006 issued by the Tamil

5.

15.05.2006 Nadu Electricity Regulatory Commission for

Non-Conventional Generating Plants

Energy and

Sources

based

Non-Conventional

Energy Sources based Co-generation Plants. Pertinently, this order provided that it would apply to all plants commissioned after 15.05.2006 and power purchase agreements in existence prior to the date would continue to remain in force. Power Procurement from New and Renewable 6. 08.02.2008 Sources of Energy Regulation 2008 was framed by TNERC 19.09.2008 Common Order in MP Nos. 9, 14, 23 of 2008 7. 8. by the TNERC waiving the application of Tariff Order No. 3 of 2006 from 19.09.2008 onwards 20.03.2009 The Commission has issued Comprehensive Tariff Order on Wind Energy (Order No.1 of 2009) with an operative period of two years 9. from 20.03.2009 to 31.03.2011. 08.04.2011 The Commission has issued an Order No.1 of 2011 dated 08.04.2011 extending the validity of the Order dated 20.03.2009 for the period 10. 11. from 01.04.2011 to 31.12.2011. 08.09.2011 The Commission issued Public Notice inviting the views of stakeholders on three main areas 29.09.2011 In pursuance of the Public Notice dated 08.09.2011, Submission 12. the Appellant the filed Written before Commission

expressing the comments and suggestions 15.12.2011 The Commission has issued an Order No.4 of 2011 dated 15.12.2011 extending the validity of the Order dated 20.03.2009 for the further period from 01.01.2012 to 30.06.2012. 24.05.2012 The Commission has informed the Appellant and other Stakeholders to participate in the Stakeholders Hearing on 08.06.2012 at Chennai. 04.06.2012 The 1st Respondent Commission sent a letter to the Appellant intimating that no Consultative Paper would be released 08.06.2012 Public Hearing held at Chennai and the Appellant filed Written Submission during the hearing 30.06.2012 The Commission has issued an Order No.3 of 2012 dated 30.06.2012 extending further the

13.

14.

15.

16.

validity of the Order dated 20.03.2009 for the 17. 18. period from 01.07.2012 to 31.07.2012. 31.07.2012 The Commission has issued the impugned .08.2012 Order No.6 of 2012 dated 31.07.2012. The 2nd Respondent TANGEDCO has issued suitable 19 20 30.08.2012 24.09.2012 working instruction for the implementation of the Impugned Order. Memo of 2nd Respondent providing instructions to withdraw deemed demand concept Demands raised by the SEs of 2nd Respondent based on the working instruction

FORM I (See Rule 20) Memorandum of Appeal preferred under sub-section 1 and 2 of Section 111 of The Electricity Act, 2003 IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI APPELLATE JURISDICTION APPEAL No. _____ of 2012 BETWEEN TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001

Tamilnadu.represented by Dr.K.Venkatachalam its Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, represented by its Chairman and Managing Director, 144, Anna Salai, CHENNAI 600 002. (3). TAMIL NADU TRANSMISSION CORPORATION LTD Represented by its Chairman and Managing Director, 144, Anna Salai, CHENNAI 600 002. Respondents 1. Details of Appeal Appeal under sub-section 1 and 2 of Section 111 of the Electricity Act, 2003 is hereby preferred against the impugned Order of the Tamil Nadu Electricity Regulatory Commission (TNERC), Chennai 600 008 dated 31.07.2012 passed under the provisions of the Electricity Act 2003. 2. 3. The said order was communicated to the Appellant on 01.08.2012. The address of the Appellant for service is as set out hereunder: i) TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001 Tamilnadu. represented by Dr.K.Venkatachalam its Chief Advisor,

Phone No. 0451- 6454666, 6454667, 6454668 Mobile No. 98421 33318 E-mail Fax No. chiefadvisor@tasma.in 0451- 2433637

Address of Counsel: MR. R.S. PANDIYARAJ Advocate, B-1, Sai Sadan, No.27, North Mada Street, Thiruvanmiyur, Chennai 600 041. Mobile No. 99621-47678, 94443-62252 Mail ID rspandiyaraj@yahoo.com 4. The address of the Respondents for service of all notices in the Appeal is as set out hereunder: i) Tamil Nadu Electricity Regulatory Commission, TIDCO Office Building, 19A, Rukmani Lakshmipathy Salai, Marshall Road, Chennai 600 008. Phone number: 044 2841 1378, 044 2841 1379 E-mail: Fax Number tnerc@nic.in 044 2841 1377

ii) Tamil Nadu Generation and Distribution Corporation Ltd, 144, Anna Salai, Chennai 600 002. represented by its Chairman and Managing Director, Phone number: 044 2852 0167 E-mail Fax Number: cences@tnebnet.org, dgtangedco@tnebnet.org 044 2852 0167

iii) Tamil Nadu Transmission Corporation Ltd, 144, Anna Salai, Chennai 600 002. represented by its Chairman and Managing Director,

Phone number: E-mail Fax Number: 5.

044 2852 0167 dirtp_tantransco@tnebnet.org 044 2852 0167

Jurisdiction of the Appellate Tribunal The Appellant declares that the subject matter of the Appeal is within the jurisdiction of this Tribunal.

6.

Limitation The Appellant declares that the Appeal is filed within the period specified in sub-section (2) of section 111 of the Act as the Appeal is preferred well before the expiry of 45 days (i.e., 15.09.2012) from the date of Order of Tamil Nadu Electricity Regulatory Commission (31.07.2012) against which this Appeal is preferred.

7. 7.1

The facts of the case are given below: The Appellant Association had earlier filed Petitions before various fora on issues relating to the rights of its members in the Electricity Sector, including this Tribunal.

7.2

Before the Electricity Act 2003 came in to force, the sale of wind energy, the price on the sale and all other issues relating to captive consumption of wind energy were all being regulated by Power Purchase Agreement (PPA) as decided by the then Tamilnadu Electricity Board (TNEB) and accordingly, all matters have been regulated as per the PPA. After coming in to force of the Electricity Act 2003, the First Respondent has started issuing orders on tariff on wind energy and on other allied issues from time to time as per the powers vested under Section 61 of the Electricity Act 2003. Accordingly, the first Order of its kind was issued on 15.05.2006 in Order No.3 of 2006. Thereafter a second Order of its kind was issued on 20.03.2009 in Order No. 1 of 2009. This Order was having the validity originally up to 31.03.2011. However, owing to reasons attributable to the 1st Respondent, no fresh order was issued and the Order dated 20.03.2009 itself was extended thrice by the 1st Respondent Commission by its orders dated 08.04.2011 (up to 31.12.2011), 15.12.2011 (up to 30.06.2012) and 30.06.2012 (up to 31.07.2012). Finally, the impugned order was issued on 31.07.2012 in Order No. 6 of 2012 which came in to

effect from 01.08.2012 onwards and the same is being appealed through this present appeal petition. 7.3. The Respondent Commission while issuing orders on wind energy took care about the tariff to be paid for the wind energy generators when it is sold to the 2nd Respondent and accordingly, various parameters have been considered to calculate the capital cost of the wind energy generator. Accordingly, after taking in to certain percentage of RoE, the Respondent Commission has been fixing tariff for the wind energy generators on various dates through the Tariff Orders. Accordingly, there are at present three tariffs in operation till the impugned order was issued depending up on the dates of commissioning of the wind electric generators (WEGs). One tariff relates to the WEGs commissioned before 15.05.2006 at Rs.2.75 per unit. The next tariff is Rs.2.90 when the WEGs have commissioned after 15.05.2006 and however before 18.09.2008. The third tariff is Rs.3.39 which is applicable to WEGs commissioned after 19.09.2008 and up to 31.07.2012. Any WEG commissioned on or after 01.08.2012 is now eligible for a tariff of Rs.3.51 per unit as per the impugned Order. The above tariff prices are fixed ones and do not change by true value of money. However, the matter is pending before the Supreme Court of India and as such, the Appellant is not raising the issues in any manner in the present Appeal petition. 7.4. Before any tariff Order is made, the Respondent Commission is in the practice of circulating consultative papers for getting opinion from the stakeholders on various parameters to be decided in the exercise of fixing tariff and other related issues on wind energy generation and captive consumption. This is mandatory under the provisions of Section 61 of the Electricity Act 2003 and as well under the provisions of Guidelines for Fixation of Purchase Price for Power Produced from Non-Conventional Energy and also under the provisions of Policy announcement made by the Ministry of Non-Conventional Energy Sources, Government of India on remunerative tariff for non-conventional energy sources. However, during the course of issuing the impugned order alone, no such consultative paper was circulated among the stakeholders as was done before the issuance of orders dated 15.05.2006 and 20.03.2009. Even when the Appellant attempted to insist for the circulation of the consultative paper, the Respondent Commission has not issued the consultative paper and unilaterally refused to issue the consultative paper by its letter dated 04.06.2012 written to the Appellant.

7.5.

Even though the earlier Tariff Order dated 20.03.2009 has to expire by 31.03.2011, for no reasons it was extended for more than 19 months making the control period of two years also extended without any rhyme or reason. For extension of the order dated 20.03.2009 no sufficient reason was provided. Hence, it amounts to change and extension of control period also indirectly from the agreed period of two years (24 months) to 43 months.

7.6.

Instead of making the consultative papers circulated among all stakeholders, the Respondent Commission has issued public notices calling for comments and suggestions only on certain selective areas totally denying opportunity in all other parameters. Particularly in the matter of calculating the capital cost no opportunity was provided to all the stakeholders as was done before passing the earlier orders on 15.05.2006 and 20.03.2009.

7.7

Further, the Respondent Commission has now made drastic changes through the Impugned Order and altered the status in respect of wind energy captive consumers by introducing certain new charges like Transmission Charge, Transmission Loss Compensation Charge. Further, it has also made some changes by converting the existing Wheeling Charge and Banking Charge from kind to cash. Even though such changes have been ordered in the Impugned Order, in the absence of circulation of any prior Consultative Paper the objective for such changes were not brought to the knowledge of the stakeholders. Hence, the stakeholders were not provided with any opportunity to make comments for introduction of new charges and altering certain existing charges from kind to cash. Thereby, the Respondent Commission has totally denied the opportunity for the stakeholders to provide suitable comments. Non circulation of Consultative Paper is therefore, a clear violation of the TNERC -Power procurement from New and Renewable Sources of Energy Regulations, 2008, under Regulation 4(1)(b) as far as the requirement of public response is concerned.

7.8.

Further, the Respondent Commission has not critically analyzed various submissions and comments made by the Stakeholders including the Appellant before passing the impugned Order. The comments and suggestions made by stakeholders including the Appellant were not taken in to consideration in their letter and spirit and they were not even found discussed in suitable manner while deciding the matters. It has almost become a ceremonious way of dealing the entire matter and accordingly,

nothing was considered or discussed in detail before passing the Impugned Order. As such, the Impugned Order besides to this reason needs to be struck down for all other reasons submitted below in the Appeal Petition. 8. Formulate (i) the facts in issue or specify the dispute between the parties and (ii) summarize the questions of law that arise for consideration in the appeal: 8.1 (a) Question of Law: The questions of law leading to the filing of this Appeal are as follows: 1. WHETHER the 1st Respondent is legally correct in fixing the purchase price of wind energy at Rs.3.51 per unit without taking into account of various capital cost like IDC(infrastructure development charge), O & M charges(Operation and maintenance), Panchayat taxes, MAT(Minimum alternative tax), insurance cost, etc. which procedure is against National Tariff Policy and and also against the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008? 2. WHETHER the impugned order is legally sustainable when the Wind Energy Generators are totally covered by a separate energy wheeling agreement(EWA)? 3. WHETHER the impugned order is legally maintainable when no consultative process was properly followed which mandatory under the Act? 4. WHETHER the impugned order issued by the 1st Respondent is legally valid in so far as para 9.2 compelling the WEGs commissioned before the date of impugned order, viz., 31.07.2012 inspite of the Regulation 6 of the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 which seeks to exempt such a coverage totally? 5. WHETHER the order issued by the 1st Respondent goes consistent between para 4 and para 9.2? 6. WHETHER the order of the 1st Respondent in withdrawing deemed demand benefit to the Wind Energy Generators is legally correct when demand and energy are inseparable? 7. WHETHER the impugned order issued by the 1st Respondent is correct in so far as para 9.2 to bring all existing WEGs under the impugned order totally neglecting the principles of promissory estoppels and legitimate expectation? 8. WHETHER the 1st Respondent is legally correct in fixing the transmission charge on capacity basis when the wind power is infirm? 9. WHETHER the 1st Respondent has correctly fixed the transmission charge, wheeling charge and transmission loss compensation charge on actual basis?

10. WHETHER the 1st Respondent has correctly fixed the banking charge on actual basis? 11. WHETHER the 1st Respondent is legally correct in the matter of collection of grid connectivity charges when the total grid is maintained by the 2nd Respondent and 3rd Respondent and no grid is exclusively available for the WEGs? 12. WHETHER the 1st Respondent is legally correct in fixing the Scheduling and system operation charges when the wind power cannot be scheduled in the present circumstances? The Appellant deals with every question of law under separate heading here below: 8.2 The complexities of making the Applicability of the Order: The appellants submits that after coming in to force of the Impugned Order, there are four categories of WEGs now functioning in the State of Tamilnadu and each are governed by a separate practice and Order and accordingly, with separate Power Purchase Agreement or Energy Wheeling Agreement as the case may be depending up on the date of commissioning of the WEG. a) Those WEGs commissioned prior to 15.05.2006 are covered by PPA (Power Purchase Agreement) and not interfered by the Commissions Order dated 15.05.2006 on wind energy in any manner. These WEGs however, have the option to renegotiate and can come to the benefits of the Commissions Tariff Order on Wind Energy dated 15.05.2006 by renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA (Energy Wheeling Agreement) as the case may be. In order to make applicable the Order dated 15.05.2006 of the Commission, there was a specific provision made available in the Order itself to accommodate the option of renegotiation under Clause 4. Further, they have the option to continue with the existing arrangement under PPA Scheme itself if they are not willing for a renegotiation and as such, if they are not willing, they can continue in the old scheme itself without renegotiation towards the EPA/EWA Scheme. b) Same is the case when the next Tariff Order No.1 of 2009 dated 20.03.2009 came in to force from 19.09.2008 onwards. Accordingly, except for the purpose of Tariff for all other terms and conditions, renegotiation scope was provided for re-entering in to new EWA in Clause 4 of the Order dated 20.03.2009.

c) However, in the present impugned Order, the Respondent Commission has issued orders totally contradicting the existing schemes by which an existing WEG can either opt for the new scheme or to continue with the old scheme which was under the sole option of the WEG owner. Even though such a scheme has to be provided under the concept of promissory estoppels and legitimate expectation, the Respondent Commission has greatly erred in this matter and accordingly, no such option was made available in the Impugned Order. Besides to the same, the Impugned Order is having confusing contents in Para 4 and Para 9.2 totally contradicting with each other. d) Para 4 of the Impugned Order says as follows: Since changes are made in various provisions of the previous Order, the Commission considers it appropriate to give effect to all of the provisions contained in this Tariff Order only prospectively. This Order, therefore, shall come in to effect from 01.08.2012. But whereas Para 9.2 of the Impugned Order says as follows: Other related charges and terms and conditions specified in the Order shall be applicable to all the wind energy generators, irrespective of the date of commissioning The impugned Order therefore, mandates heavy costs on captive consumption of wind energy with effect from 01.08.2012 and however, the EWA already in force is not in support of the said costs to be collectable from the executants of the EWA. Hence, any WEG owner could opt to continue to be in the old agreement and therefore, there is no mandatory necessity to switch over to the new system from 01.08.2012 onwards. This liberty was provided in both the earlier orders and however, only in the Impugned Order, it has been fully wiped out. For no reason, the existing WEG owner could be compelled to go for the new Order which costs him heavily on various areas and therefore, such a compulsion is against the principles of natural justice.

e) Each WEG is covered by a separate Energy Wheeling Agreement and as new charges are likely to be levied in place of old charges as per

the impugned Order, the existing WEG owners may not opt to come for the new Order and they may like to continue to remain in the existing EWA itself without altering their status. Based on the terms and conditions prevailed during the time of taking investment decisions, the WEG owners has come forward for going to the wind power. It is not therefore fair to drive them to a new set of costs which were not even thought of, when the investment decision was originally taken. Now asking them for a sweep change is not fair and reasonable on the principles of promissory estoppels and legitimate expectation. All investments prior to 31.07.2012 (i.e.,) before the issuance of the impugned Order have happened only based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now without any rhyme or reason, to ask them also to come for the new Order with high costs is against the principles of the natural Justice, promissory estoppels and legitimate expectation.

8.3

In para No. 4 of the impugned Order, the 1st Respondent Commission has made as follows: This order contains many provisions not only relating to tariff but also relating to other terms and conditions. Since charges are made in various provisions of the previous order, the Commission considers it appropriate to give effect to all the provisions contained in this tariff Order only prospectively. This Order, therefore, shall come into effect from 01.08.2012. But, very much contrary to its own Order in Para No.4, in Para No.9.2 the 1st Respondent Commission has made it as follows. 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning.

8.4

Hence, from the contradictory statements of the 1st Respondent Commission, the 2nd Respondent TANGEDCO has given working instructions to make applicable all the new charges and all other new terms and conditions to all WEGs who are totally controlled by a different Energy Wheeling Agreement and accordingly, the 2nd Respondent has started raising bills for new charges even though there is no provision in the Energy Wheeling Agreement to claim such charges. The existing benefits like deemed demand charges were totally withdrawn even without

a notice. Hence, due to the erroneous and anomalous nature of the impugned Order of the 1st Respondent, all WEG owners/members of the Appellant are put in too much of financial difficulty and hardship leading to irreparable loss during every month from 01.08.2012 onwards. 8.5 Further, under the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008, under Regulation 6, it has been made as follows: 6. Agreement and Control period The tariff as determined by the Commission specific order for the purchase by a general or

of power from each type of

renewable source by the distribution licensee as referred to in clause 4(3) shall remain in force for such period as specified by the Commission in such tariff orders. The control period may ordinarily be two years. When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. 8.6 However, much contrary to the above Regulation, the Respondent Commission in Para 9.2 of the Impugned Order, makes it mandatory the contents of the Order totally applicable for all the WEGs irrespective of the date of commissioning. The Regulation mandates that When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. But much contrary to the same in Para 9.2 of the Impugned Order the Respondent Commission states as follows: 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. Hence, the Impugned Order is totally against the very letter and spirit of the Regulation and on this score alone, the Impugned Order needs to be set aside.

8.7

While the 1st Respondent Commission dealing with execution of Energy Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has made it as follows: 8.17. Energy Wheeling Agreement (EWA) The format for Energy Wheeling Agreement (EWA) shall be evolved as specified in the Commissions regulation in force. The period of agreement and other terms and conditions shall be as per the terms of open access regulations in force issued by the Commission. Hence, even assuming that the Order is applicable for all WEGs irrespective of the date of commissioning, in order to enforce the various terms and conditions stipulated in the impugned Order, it requires an Energy Wheeling Agreement and accordingly, after getting it signed by the parties concerned only, this Order would be given effect and whereas the 2nd Respondent has not cared to proceed to get the EWA draft vetted and approved by the Commission after following the due process of stakeholders consultation. This again makes the working instructions invalid as no new Energy Wheeling Agreement was executed and no text of Energy Wheeling Agreement was circulated for providing opportunity for the stakeholders in the matter of finalization of the text of new Energy Wheeling Agreement.

8.8

The Appellant submits that each WEG has a specific commissioning date and according to the date of commissioning, the said WEG is governed by an Order of the Commission and therefore, unless the WEG owner opts for renegotiation of the existing agreement, the new Order and the various terms and conditions stipulated in the new Order cannot become automatically enforceable with the WEGs commissioned before the date of issuance of the Order in any manner. All the previous orders have very specifically made this clause under the heading of Applicability of the Order under Para 4 both in Order No. 3 dated 15.05.2006 and in Order No.1 dated 20.03.2009. Such an arrangement is required and goes in concurrence with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 quoted supra. For the sake of convenience of reference the said paragraph in Order No.3 dated 15.05.2006 is reproduced below: 4.0 APPLICABILITY OF ORDER

This order shall come in to force from the date of its issue. This order shall be applicable to all future and renewal of existing contracts/agreements for the Non-Conventional Energy Sources (NCES) based Generating Plants and Non-Conventional Energy Sources based Co-Generation Plants located within the State of Tamilnadu. It should be noted that the existing contracts and agreements between NCES based generators and the distribution licensee signed prior to the date of issue of this order would continue to remain in force. However, the NCES based generators and the distribution licensees shall have the option to mutually renegotiate the existing agreements or contracts if any, in line with this order even before the expiry of the existing agreements or contracts. Any renewal of the said contracts/agreements, new contracts/agreements shall be in line with this order. 8.9 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the Commissioned has made as follows: 4. Applicability of this Order Order No.3 dated 15.05.2006 of the Commission lays down a control period of three years for that order and therefore, normally the next order should have taken effect from 15.05.2009. The Commission in the Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has ruled that the control period of three years specified in order No.3 dated 15.05.2006 is waived from the date of issue of that Order. The control period of three years, thus, stands terminated on 19.09.2008. Therefore, the Commission holds that all the wind energy generators commissioned on or after 19.09.2008 shall become eligible for the benefits of the present order, subject to the condition that the monetary benefits shall accrue from the date of this order. The existing agreements between the wind energy generators and the distribution licensee shall continue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. The agreement between the wind generators and the distribution licensee in relation to all machines commission on or after 19.09.2008 shall be in conformity with this order.

8.10

The above two orders of the Commission perfectly fit with the Principles of natural Justice coupled with the theory of promissory estoppels and legitimate expectation. Further, such a provision is also in line with the Regulation 6 of TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008. Each WEG has come in to being by a large capital investment. Hence, what set of terms and conditions are applicable at the time of making investment would continue to be in force till the WEG promoter opts to continue with it as the investment decision has happened only with reference to the knowledge, information, rights and responsibilities made available at the time of making investment decisions. The members of the Appellant having altered their status based on certain terms and conditions prevailed at a point of time when they invested on wind energy, cannot now be unilaterally forced to come for new terms and conditions. Then it becomes an arbitrary exercise and the impugned Order could only be construed to have the effect of unilateral and arbitrary exercise of power. Further it is violative of the principles set out under Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008.

8.11

Further, as per the Clause 11 of the existing Energy Wheeling Agreement (EWA) by each of the members of the Appellant executed, it has been made as follows: 11. Terms and Conditions agreement period: (1) The agreement shall be valid for a minimum period of 5 years. (2) The parties to the agreement shall be given the option to exit for violation of the agreement after serving a notice of three months on the other party. (3) The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with the Commissions order in force.

8.12

From the Clause 11 (3) of the existing EWA, it could be seen that there is a liberty extended to parties that either they can renegotiate the existing agreement for going to the new agreement as per the new orders if any or they can continue to remain as such in the existing agreement itself. The option is therefore, vested with the party concerned and therefore, no party could be compelled or forced to accept any new terms and conditions for which no agreement was signed earlier. This option made available to the WEGs is totally wiped out in the impugned Order. The impugned Order unilaterally forces all the WEG owners irrespective of the date of commissioning to come for the new arrangement whereby heavy costs are involved with large civil consequences.

8.13

Due to the implementation of the working instructions of the 2nd Respondent based on the impugned Order of the 1st Respondent, every member of the Appellant is losing heavy money every month due to certain new charges as leviable due to the fresh terms and conditions of the new Order with effect from 01.08.2012 onwards. All the members of the Appellant are totally unaware of the terms and conditions while they made investments and altered their status to erect and commission the WEGs for the purpose of captive consumption. All their investment plans, RoE, etc., have been based only on the available terms and conditions as enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009. Hence, even though the Commission has made it clear in Para No.4 that the terms and conditions are to be applied prospectively, it has contradicted its own versions and accordingly, in Para No.9.2 it made it to applicable to all WEGs irrespective of the date of commissioning. Therefore, the 1st Respondent Commission has committed a serious error and hence it needs to be corrected and rectified by this Hon'ble Tribunal.

9.

Therefore, the Appellant humbly prays that the members of the Appellant having made investments and altered their status based up on certain terms and conditions stipulated by such orders which were in force during those points of taking investment decisions, cannot now unilaterally and arbitrarily be directed to come for a new set of terms and conditions by the impugned Order which has a very strong impact on their financial workings and thereby the entire operation becomes totally unviable. The impugned Order imposes serious civil consequences and therefore, it could never be retrospective for any reason. Further, the impugned Order contradicts with each other as far as Para No.4 and Para No.9.2 are concerned. Further, Para 9.2 of the Impugned Order is in total contradiction of Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Hence, it needs to be set aside on this very score alone.

10.

Further, in having ordered that all WEGs irrespective of their date of commissioning to come for the new Order which casts serious civil consequences to pay more charges, the 1st Respondent has clearly violated the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing but arbitrary exercise of powers, against the approved cannons of law, against the Principles of natural Justice and against the Principles of promissory estoppels and legitimate expectation and therefore, it is

expropriatory under Article 14 of the Constitution of India and hence, the Order needs to be struck down for this score also. (b) Question of facts: 11. This appeal is of two parts. The first part deals with the matter of applicability of the Order for the existing WEGs also which were commissioned prior to the issuance of the impugned Order and the same was dealt in the earlier paragraphs. The second part of the Appeal deals with the various charges notified in the Impugned Order. When it is considered to be made applicable even only to the future WEGs, considering the future investment that has to happen in the State of Tamilnadu in the wind energy sector and also considering the fairness of the charges, the method of arriving charges and all other related matters, the appeal has to pass through the second stage also. Hence, those matters are dealt in the second part of the Appeal in the below paragraphs. Now the Appellant proceeds for the second part of the appeal. 12. Section 61 of the Electricity Act 2003, permits the 1st Respondent Commission to specify terms and conditions for determination of tariff and however, such a Tariff determination exercise should be guided by the Principles laid down by the Act itself and also by the Principles and Methodologies specified by the Central Commission for the determination of tariff and also by the National Electricity Policy and Tariff Policy. 13.1 Much contrary to the policies laid down both by Central Commission and also by National Electricity Policy and Tariff Policy, the Respondent Commission has issued the impugned Order in very many areas totally neglecting the legal and regulatory provisions. 13.2 Any fixation of tariff on energy particularly through NCES, needs to be in consonance with the National Electricity Policy. The National Electricity Policy mandates the following manner of approach on power from Cogeneration and NCES. 5.12 COGENERATION AND NON-CONVENTIONAL ENERGY

SOURCES 5.12.1 Non-conventional sources of energy being the most environment friendly there is an urgent need to promote generation of electricity based on such sources of energy. For this purpose, efforts need to be made to reduce the capital cost of projects based on non-conventional and renewable sources of energy. Cost of energy can also be reduced by

promoting competition within such projects. At the same time, adequate promotional measures would also have to be taken for development of technologies and a sustained growth of these sources. 5.12.2 The Electricity Act 2003 provides that co-generation and generation of electricity from non-conventional sources would be promoted by the SERCs by providing suitable measures for connectivity with grid and sale of electricity to any person and also by specifying, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licensee. Such percentage for purchase of power from non-conventional sources should be made applicable for the tariffs to be determined by the SERCs at the earliest. Progressively the share of electricity from non-conventional sources would need to be increased as prescribed by State Electricity Regulatory Commissions. Such purchase by distribution companies shall be through competitive bidding process. Considering the fact that it will take some time before non-conventional technologies compete, in terms of cost, with conventional sources, the Commission may determine an appropriate differential in prices to promote these technologies.

13.3

Accordingly, even the Central Electricity Regulatory Commission while issuing the Regulation on CERC (Terms and Conditions of Tariff) Regulations, 2009 has specified that the terms and conditions of Tariff need to aim the promotion of cogeneration and generation from renewable resources under Regulation 3 (5)(g). Therefore, the Green Energy Sector needs to be given priority from other sectors considering the following facts; (1) (2) (3) Clean Energy Non-depletion of conventional sources and Harnessing the natural resource i.e. wind for the generation of electricity. The Government of India and all other State Governments are very much particular about promoting the green energy through renewable sources and accordingly, a specific Ministry is operating at the Center in the name and style of Ministry for New and Renewable Energy (MNRE).

13.4

Inter alia, the Commission whenever attempts to fix the tariff for the Wind Energy Generators (WEGs) has to consider the capital cost involved from time to time and based on a RoE (Return on Investment) working, the Commission has to fix the retail tariff for the wind energy. However, even

though various parameters have been considered, the following important parameters in spite of strong suggestions made by the Appellant have not been considered for arriving the total cost per MW and accordingly, the Commission has failed to correctly arrive the actual capital cost involved. Costs not considered for calculation of total cost of WEG a) Infrastructure Development Charges (IDC) at the rate of Rs.30 Lakhs per MW One time. b) O&M charges at the rate of Rs.1.6 Lakhs per year with 5% annual escalation - Recurring c) Panchayat Taxes coming to Rs.10 Lakhs per MW at the first year and goes with Rs.3 Lakhs every year per MW Recurring 13.5 The Commission has decided to allow 19.85% pretax return on equity in the Impugned Order as adopted in the previous order. The Commission has greatly erred by omitting to note that the RoE calculated as 19.85% in the previous order was based on the 10% MAT which prevailed at the time of issue of previous order. At present the MAT is 20%. Therefore RoE should be calculated based on the present rate of 20% MAT. 13.6 It is to be noted that the Commission in its order merged the insurance cost with O & M expenses and considered both at only 1.1% of the capital cost towards the single head of O & M expenses. At present the insurance charge is around 0.7%. Out of 1.1% of the O & M expenses, on exclusion of insurance charges of 0.7%, it would be difficult and practically not possible to maintain the WEGs with the balance of 0.4% towards the O & M expenses. Therefore, a reasonable percentage of around 1.8% inclusive of insurance should have been considered while taking the cost on O&M with insurance cost. Therefore, failure to consider the same, amounts to wrong calculation of arriving the capital cost and as such, all consequential working becomes not actual and correct and therefore, it needs to be revised. 13.7 Hence the capital cost arrived by the Respondent Commission for issuing the impugned Order is not true and does not reflect the real state of affairs which would have been otherwise extremely more on actual facts. The Commission has taken Rs.5.75 Crores as the capital cost per MW and however, no break up was provided for the same. It is not found included with the left out cost of Rs.45 Lakhs on IDC, O&M Charges and Panchayat Taxes. Besides to them considering the increased rate of MAT and right calculation of insurance costs it would work out more and accordingly, a Tariff of not less than Rs.3.90 per unit

needs to be fixed. Hence, the Appellant prays the Hon'ble Tribunal to Order to remand back the matter to the Commission to consider all left out expenses and investments and accordingly, direct to arrive a real capital cost and thereby to fix the reasonable cost for the wind energy generators in line with the Tariff Policy. National It is painful to note that no explanation was provided in the

Impugned Order as why the above costs have not been taken in to account while arriving the total capital cost. 13.8 Hence, to the above extent, the Order of the 1st Respondent should be set aside insofar as fixation of tariff of Rs.3.51 per unit and accordingly, based on the real costs, the Tariff should be fixed at Rs.3.90 per unit of energy generated from windmills and the same should be made applicable from 01.01.2012 by which date the earlier Tariff Order dated 20.03.2009 would have been expired but for its extension. Unless the new tariff is ordered to be effective from 01.01.2012, the control period of 24 months as notified in Regulation 6 of TNERC Power Procurement from New and Renewable Sources of Energy Regulations, 2008 would become in-operative.

14

When coming in to the various charges leviable on the wind energy captive consumers, the Commission has gone again beyond its scope in fixing such charges and for the sake of convenience, the Appellant deals with each charge separately in the forthcoming paragraphs.

15

Transmission Charges/Wheeling Charges/Transmission Loss Compensation Charge:

15.1

Hither to, the Commission has ordered to collect only one charge namely wheeling charge which included the charge on Transmission, the Charge on Wheeling and the Charge on Transmission Loss. This is how Order No.3 of 2006 dated 15.05.2006 and Order No.1 of 2009 dated 20.03.2009 have specified. For the sake of convenience, the relevant portions of the above orders are extracted below: Extract of Order No.3 dated 15.05.2006: Guidelines of MNES and orders of other Commissions on Transmission and Wheeling Charges. MNES Guideline is 2 % of the energy fed into the grid TNEBs existing charges is 5%

 Charges in other States UP, MP, Maharashtra and West Bengal - 2 % Gujarat - 4 % Rajasthan -10 % UP 12.5% Andhra 50 paise / unit as network charge and 28.4 % of energy.

Commissions Views / Decisions The contention that wind energy generation is distributed and helps the grid as distributed generation is no longer valid as far as Tamil Nadu is concerned. There is a phenomenal growth of wnd Energy generators in Tamil Nadu and they are mostly concentrated in Palghat, Shencottah and Aralvoimozhi passes. These areas are considered to be poor load / demand regions and most of the power generated in these places have to be evacuated to the far off load centres. Regarding the transmission and wheeling charges, the existing practice (which includes the line losses in kind) is given below:

Wind Energy Generators Biomass Co-generation Within 25 KM usage Beyond 25Km usage

5% 10% 2% 10%

Total transmission and wheeling charges including transmission and distribution losses for various voltage levels of injection and drawal have been specified in the orders of the Commission on transmission and wheeling charges against the petition of TNEB in TP1/2005. As per that order, if the point of injection and point of drawal is at 33 KV level, the total transmission and wheeling charges will be very much less than the existing 10% mentioned above. Also the transmission and wheeling charges fixed by the Commission for fossil fuel based Cogeneration in another order is 7%. To give encouragement for promotion of renewable energy and Co-generation, the Commission decides the following transmission and wheeling charges which include the line losses in kind: Wind Energy Generators 5 % of energy

Biomass Co-generation

Within 25 KM usage :

3%

Beyond 25 KM usage : 6 % Within 25 KM usage : 3 % Beyond 25 KM usage : 6 %

The transmission and wheeling charges fixed as above will get reduced, if the voltage level at the point of injection and at the point of drawal is equal to or more than 110 kV. The reduction will be based on the Commissions order against the petition no TP1/2005 from TNEB. As an example, if the injection voltage by the NCES generator is at 110 kV and the drawal for captive usage is also at 110 kV, the transmission charges specified by the Commission in the above said order will work out to around 5.80 %. Such cases shall be specifically brought to the Commission and the rate revised. Regarding the captive usage for LT consumers, Commission accepts the difficulties expressed by TNEB. Further, since the LT services do not have ToD metering arrangement, it may not be possible to uniformly implement the various provisions covered in this order. Hence it is decided to restrict the captive usage to HT services only for the present. The third party sale is permitted subject to the Commissions regulation on open access. 15.2 Likewise the extract of orders in Order No.1 of 2009 dated 20.03.2009 is also provided below for the sake of convenient reference: 8.3 Transmission and wheeling charges The transmission and wheeling charges were initially fixed by the TNEB at 2% in 1986 The charges were enhanced to 5% by the TNEB in September 2001. They remained at that level till 2006. The Commission adopted the same rate of 5% towards the transmission and wheeling charges including line losses in order No.3 dated 15-5-2006. The TNEB has now pleaded for stepping up the charges to 15% on the ground that transmission and distribution losses have gone up in the recent years. The transmission and distribution losses of the TNEB has remained static at 18% since 2003 and therefore, the Commission does not see merit in the plea of the TNEB to abruptly raise the charges to 15%. The Commission decides to retain the wheeling and transmission charges including line losses at 5% uniformly for captive use and third party sale of wind energy in the case of HT / EHT consumption. However, the charges

in regard to captive use and third party sale in LT services are fixed at 7.5%. 15.3 From the above extracted portions of the earlier Orders, it could be seen that the charge on Transmission, Wheeling and Loss on Transmission was considered as one component and accordingly, the Commission has fixed 5% of the units so wheeled as wheeling charges to compensate all the three charges. The Commission has also commented that no merit was found in the plea of the then TNEB to increase the charges to 15% abruptly as the Transmission and Distribution Losses of the TNEB has remained static at 18% since 2003. This was the position during 2009 also. Thereafter there was no considerable change in the position and as such the Transmission and Distribution Losses continued without any considerable increase. But however, the Respondent Commission has now steeply increased the charges and accordingly, one component so far maintained for Transmission, Transmission Loss and Wheeling, was split in to three separate components namely Transmission Charge, Wheeling Charge and Transmission Loss Compensation charge in the impugned Order which view is nothing but totally taking a U turn against its own views observed in earlier occasions while issuing orders on 15.05.2006 and 20.03.2009. 15.4 The justification provided for making the single charge in to three separate charges as adduced by the Commission is that the TNEB has now become unbundled and therefore, it has to be collected separately for Transmission and Wheeling as the Transmission Charges would go to the Third Respondent and the Wheeling Charges would go to the Second Respondent. However, what is neglected in splitting up one single charge in to three separate charges, is that the quantum of charges all put together. If all the charges put together works out to 5% of the total units wheeled, then the rationale behind the argument would be justified. However, without adopting such a course, the Respondent Commission has increased manifold the charges which come to almost 1188% of the old charges. 15.5 The following table would prove how the charges have been exorbitantly increased. Sl.No. Name 1 of the As per previous As per the

Charge Wheeling Charge

Orders Impugned Order 5% of the units 23.27 paise per wheeled which unit

converts in to 9.31 2 3 Transmission Charge Transmission Loss Compensation 4 5 Charge Total Percentage increase 9.31 paise of 110.6 paise 1188% paise per unit No such charge No such charge 47.33 paise per

unit 40 paise per unit

15.6

The Commission has failed to observe that the Loss in Transmission has not been changed and remained constant throughout the period. Therefore, if the Commission wanted to notify the charges in to 3 different components, it would have notified all the 3 charges and however, the total of which should not have been increased from the existing price of 9.31 paise per unit and accordingly, the total of all the 3 charges should have been remained only at 9.31 paise per unit and not at the exorbitant cost of 110.6 paise per unit which is almost 12 times of the existing cost. Hence the Appellant submits that the Commission has not properly applied its mind before passing the impugned order to the above extent. The Commission has not justified why such a steep increase is required at present. The above charges are therefore, unilateral, without mind application and against the concept of fairness and equity.

15.7

Further, the Respondent Commission knows well that the wind power is totally infirm in nature and WEGs are having only the lowest plant load factor (PLF) or capacity utilization factor (CUF). In the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008, the firm and infirm power were defined. According to the definitions, wind power is always infirm by nature. Transmission Charges taken at a basis of Rs.6,483/- per MW per day is for the firm power which is capable of producing power during all the 24 hours in a day, all the 7 days in a week and all the 365 days in a year. But whereas, the WEGs are seasonal and their PLF is influenced by various factors like grid availability, wind availability and machine availability. Even the Respondent Commission in the same impugned Order has observed that the wind energy in Tamilnadu is enjoying a CUF of 27.15% in Para No.7.3.2 which is extracted below:

7.3.2 The assessment of CUF has widely varied from a figure of 25% suggested by Indian Wind Power Association, 25% suggested by Indian Wind Turbine Manufacturers Association, 24.26% suggested by Tamil Nadu Spinning Mills Association and 25% suggested by The Southern India Mills Association. IREDA suggested CUF in the range of 22 30%. TANGEDCO stated that the higher size wind machines may even run at low wind speed. Commission observes that the new wind machines are technically advanced, more efficient, can run even at low speed and are with higher hub heights. Therefore, the Commission decides to retain the present CUF of 27.15% for the new machines also for this control period.

15.8

The Association of the Appellant has already made strong studies and accordingly, arrived at a figure of 24.26% as the CUF in Tamilnadu for the WEGs and based on these studies only, it has recommended to consider the CUF at 24.26%. But however, without making any study, the Respondent Commission has taken the CUF as 27.15% without any supporting document. Further, the impugned Order says that the Commission has decided to retain the present CUF of 27.5% for the new machines also for this control period. But whereas the Transmission Charge, according to the impugned Order is applicable not only to new machines but also for all the old machines and that too irrespective of the date of commissioning. Hence, the rational way of collecting the Transmission Charge would be only on the units transmitted in to the grid and not on the capacity of the WEG as a whole.

15.9

Even though each WEG by virtue of its make and size has a notified capacity, due to the seasonal factors of wind which is further influenced by grid availability and machine availability has only a lower CUF. This fact was rightly admitted by the Respondent Commission itself. Hence, a Transmission Charge which is applicable to a power plant which has an inherent character of having 70-80 % CUF cannot be made applicable directly to a WEG which is having only one fourth of the CUF. This means that un-equals are treated as equals and therefore, it is bad in law. The Transmission charge of Rs.6483 per MW per day is applicable only for a firm power plant which has the capacity to run and generate the energy throughout the year on a nonstop basis. But a WEG has its own natural constraints and prone to wind availability which again is only a natural and seasonal factor. For that reason only, wind power is called as infirm power. Hence, the rate of Transmission charge prescribed for a firm power plant cannot be applied directly as such for a power plant which is totally

infirm by all possibilities. Hence the impugned Order needs to be set aside on this very score also. 15.10 It would be appropriate that as existed earlier, even assuming that Transmission Charge has to be levied besides wheeling charge, it should be levied only on the units transmitted and not based on the capacity of the WEG. The Commission has forgot to consider the infirm nature of wind power and erroneously taken the wind power also as confirmed power and accordingly, taken the Transmission charge available for a power plant of firm nature to the WEG of infirm nature. The 40% of Transmission charge ordered for collection for WEGs is only on promotional measure as the WEGs are generating power through NCES and therefore, that concession is nothing to do with the taking of Transmission charge squarely equivalent to that of a firm power plant. 15.11 In the matter of collection of above charges, from the earlier orders, the present impugned Order differs only on one area and accordingly, it requires the collection of Transmission and Wheeling Charge in cash instead of units which was in kind as per the earlier orders. Hence, when the basis is not totally changed it has a change only from kind to cash. As such any levy of charge should be based on the units generated and not on capacity as a whole. When the WEG cannot produce energy based on the capacity at any point of time, ordering to collect Transmission charge based on capacity is totally void of the whole concept of wind power and its nature as infirm power. Therefore, the Appellant prays that the Order to collect Transmission Charge based on capacity should be modified in such a way to collect the same based on the units transmitted. Therefore, to that extent the Impugned Order needs to be set aside with a direction for collection of transmission charges based on actual energy generated and transmitted by the WEGs instead of their capacity being taken as yardstick. 15.12. Further the rate of transmission charge sought to be levied in the present impugned order is abnormal and unrealistic. It ought to have been fixed based on the value of 5% of the units transmitted and not at such a exorbitant rate as explained above. 16. Banking issues: 16.1 The Commission in its order, while discussing the Banking issue in the paragraph 8.2.1 of the impugned Order, considered that the estoppels

cannot be invoked with regard to banking. This goes against the very spirit and observations of the Hon'ble APTEL in Appeal No.53, 94 and 95 of 2010 to the extent extracted below.

25. It is also to be pointed out that it is only because promises made by the Government and the Electricity Board in respect of wind power generation which included the concept of banking, the generators set up the facilities by incurring heavy expenditure. Therefore, the Board is estopped from making claims contrary to the said promises. The Electricity Board is one of the pioneers in developing regime for wind energy. It has introduced the concept of banking. It was on the basis of the said policy initiative that substantial investments came to be made in the wind sector. After permitting the same for more than 25 years, the Electricity Board now is seeking to take such a different stand. 26. Therefore, the Electricity Board cannot be allowed to deny the benefit of banking which has been contractually and judicially recognized. The tariff orders were also passed recognizing the same. The concept of banking is contained in the tariff order applicable to wind energy generators. This order has already been upheld by this Tribunal in Appeal No.98 of 2010. Hence, the grounds of this Appeal have no basis. 27. (d) The concept of banking was evolved by the State Commission which is in line with the provisions of the Act, 2003, National Electricity Policy and the National Tariff Policy. Therefore, the impugned order promotes the object of the Act/Rules and the purpose it serves. It would be impossible to set-up the Wind Energy Units without the banking facilities due to the very characteristics of wind power generation. It was only because of the promises made by the Government and the Appellant in respect of Wind Power Generation which included the concept of banking, the wind generators set-up their facilities by incurring heavy expenditure. Therefore, the Appellant is estopped from making claims contrary thereto. 16.2 Hence, taking totally a contrary view over the views and observations already expressed by the Hon'ble Tribunal is amounting to rewriting of the Judgment ordered in the above case in Appeal No.53 of 2010 to the extent explained above. 16.3 Further, it is discussed in the Impugned Order that the banking charges were initially fixed as 2% in kind and line losses were fixed as 2% in kind

and increased to 5% during March 2002. This increase in banking charge was discussed in the Impugned Order. It is to be noted that when the utility wants to install the wind energy generators in Tamil Nadu, huge investment was required to harness the wind potential in the State which could not be made by the TNEB. Hence, various promotional measures were announced to attract developers since 1992 onwards. During initial days of wind energy generator installations, most of the generators are connected in to the local net work (even most of the old generators are still continuing in the same distribution net work) and hence lower line losses were expected and fixed on lower side. Further, during the year 2000, the average line losses for TNEB was around 15% only. By considering the capacity utilization factor of the wind energy generator at around 24%, the banking charges are fixed reasonably at 5%. Hence, it is to be noted that the banking charges are fixed so far only at a reasonable rate based on the line losses which were worked out with the proper logical conclusion to facilitate both win-win situation for the distribution utility and the generator. Even if there is a grievance on the quantum of losses to the utility, the same should have been agitated at that time itself. Having allowed to go with 5% banking charge for years together and coming with a different concept and explanation now may not help to justify the changes as made in the Impugned Order. 16.4 Further, the Commission in its order has observed that the captive use of wind energy has been on increase year after year. It is to be noted that the Commission has not compared the captive consumption to the total generation from wind sources. In the recent period, most of the investments made in wind generation are through IPPs and REC route. This statement is made based on the comparison on absolute terms where the total capacity of the State is expected to grow at the rate 8 -10% per annum. The captive use has been decreased year after year. Even assuming for argument sake that there is an increase any investment made on captive generation is a welcome measure, as it happens to the green power segment and therefore, it should not to be criticized. 16.5 The Commission in the order at paragraph No. 8.2.9 observed that the banking of wind energy in other States is meager and it does not have considerable impact on the finances of the distribution utilities whereas in Tamil Nadu due to its high installed capacity, the impact is more. Further, in the paragraph No. 8.2.12, it is stated that for reasonably compensating the loss of the distribution licensee on account of banking of wind energy,

the Commission has examined different alternatives. It is to be noted that the discussion about the loss to the distribution licensee has never been made available public and is therefore, the whole statement is vogue. Hence, without substantiating the same with facts and figures the allegation of loss due to banking cannot be considered as a true statement. 16.6 The TANGEDCO through CE/NCES has attempted to file MP No. 1 of 2012 for the removal of banking facility before the Commission. During the course of admission of the petition itself, the Commission wanted to have certain clarification in the petition and accordingly, directed the TANGEDCO to modify the same. However the TANGEDCO has not bothered to supply the details till today to the Commission and the matter is still pending without admission. Based on the period furnished by TANGEDCO in the said petition on the calculation of banked units, a detailed working is given below to establish that there is only profit and not loss to TANGEDCO. With the present situation of huge power shortage across the Country, the distribution licensee is forced to buy power from outside throughout the year. With the average sale realization of Rs. 4.99 per unit as per the ARR filed and approved in the Retail Tariff Order No. 1 of 2012, the distribution licensee is not making any loss on account of banking, but only gains. Table Gain Accrued by TANGEDCO on account of Banking S.N o. I. TANGEDCO EXPENDITURE: a) TANGEDCO Purchase from November to b) C) March for supply to wind mill banked users TANGEDCO Payment for the lapsed units after March to WM owners Total Expenses to TANGEDCO for 845 Description In Million Units 676 169 845 Rate Per Unit Rs. 5.62 3.05 380 52 431 Rs. Crores

Million Units II. TANGEDCO INCOME d) TANGEDCO realization from consumers e) f) h) from April to October by selling wind units Realization through sale of 5% of banked units Total Income of TANGEDCO Net Gain to TANGEDCO on account of banking facility

845 44 889

4.99 4.99

422 22 444 13

The Commission has therefore, greatly erred in its observation in the last line of para 8.2.11 of the Impugned Order to discuss the rate at which energy will be banked and the rate at which energy will be redrawn from the bank. When there is no rate for the energy to be banked, there arises no question to compare the rate at which the energy will be redrawn from the bank. Energy is banked only for redrawing. That banked energy is sold at that moment to the consumers by the Utility in this case it is TANGEDCO at an average realization cost of Rs.4.99 per unit as per latest Commissions order. 16.7 Therefore the Commission has committed a serious error in its observation for reasonably compensating the loss to Distribution Licensee. This statement is devoid of any merit and made without going through the calculation based on the petition filed by TANGEDCO. While examining the different options, the Commission has bench marked the rate specified in the market monitoring report published by the CERC. The Commission stated that it had examined the details available for the period from April 2010 to March 2012 for the sake of better approximation of traded prices. It is evident from the details of the prices referred that the average traded price for the year 2010 -11 is Rs. 4.74 per unit and Rs. 4.23 per unit for the year 2011 -12. Further, it is to be noted that the average price per unit is more in the months of April and May of the years which is no way connected with the redrawn of wind energy banked units. When the banking period begins with April of every year and the wind season starts with the month of May, these two months will neither have any banked units to redraw nor would sufficient generation be there for banking. Hence, the average rate bench marked for power purchase rate of banked unit redrawn has no justification in any manner. 16.8 Further, the Commission has considered that the maximum preferential tariff for wind energy as contained in the Impugned order as the bench marked rate for the wind energy banked with the utility. The Commission has failed to understand that the captive wind energy generators have not made their investment to supply their generation to the distribution licensee. They are not for selling the energy, but they bank the energy for re-drawl. There is no rate for units to be banked. TANGEDCO realizes for these banked units at a price of Rs.4.99. All the captive investments are made to secure their energy requirement for future and fixing the rate of preferential tariff as the bench mark for the rate for the banked units is not justifiable in any course of law. It indirectly forces the captive consumers to go out of captive consumption. It would be proper to consider the average sale realization of

the utility which is the actual income to the utility by selling the energy so generated and banked by the captive consumers at the time of wind season. It is to be noted that the average sale realization for the year 2012 -13 for the utility is Rs. 4.99 per unit as per Tariff Order No. 1 of 2012 dated 31.03.2012. When the energy generated is sold and realized at the rate of Rs. 4.99 per unit with the average purchase rate of Rs. 4.45 as per the so called bench mark rate less than the sale realization rate, the discussion made in the Impugned Order on the losses to the utility due to banking does not arise at all. The Commission has seriously erred in calculating the maximum preferential tariff as the rate on wind energy banked for the captive consumers and the conclusion made in terms of losses to utility due to banking is totally wrong and unsustainable. 16.9 In the nut shell, the following are the issues; The system of banking is no more a facility for windmill captive consumers and according to the words of this Hon'ble Tribunal it is a system contractually and judicially recognized. However, in spite of the same, the Commission considers that estoppels cannot be invoked. This statement is therefore, contrary to the findings of the Hon'ble Tribunal. 16.10 Hence accepting the above observation of the Hon'ble Tribunal, the Commission should come forward to continue the banking charges at 5% of the energy banked either in kind or in cash. The Commission in the Impugned Order has observed that the wind energy for captive use has been on the increase year after year. The Commission did not justify the statement with relevant statistics. The Commission has failed to appreciate the wind turbine erection and captive consumption at various periods. The percentage of captive consumption in total generation would be the relevant factor to consider this aspect. 16.11 The Commission has compared two incomparable parameters in fixing the banking charges. On one hand, the Commission has considered the CERC market monitoring report for the year 2010 to 2012 and fixed as the power purchase cost as Rs.4.45 per unit. But at the same time, the Commission has considered the maximum wind tariff fixed under this order at Rs. 3.51 per unit. In fact, as per the Tariff Order dated 31.03.2012, the average cost of realization was fixed by the Commission as Rs.4.99 per unit. The Commission has reckoned the difference between Rs.4.99 and Rs.3.51 to fix the banking charge in cash. There is no justification as loss when it compared the power purchase cost and realization cost. This is an apparent error in comparing two different incomparable parameters. The

energy cost realized by TANGEDCO during the banking period is to be compared with the energy purchase cost when banked energy is redrawn. This is the comparable parameter. Therefore, the conclusion of the Commission that there is a loss to distribution licensee is a mistake of facts. 16.12 The Commission under paragraph 8.2.12 has come to the conclusion that the distribution licensee is incurring the loss on account of banked wind energy and that is to be compensated. The Commission did not justify this conclusion with any statistics or figures and therefore, the findings of the are not supported by documentary proof. The Commission is simply carried away only by the letter of the TANGEDCO dated 02.06.2012 and the letter of the Principal Secretary to Government, Energy Department dated 28.03.12 which were also not found with documentary proofs. As a matter of fact, there is only gain and not loss. Therefore, the Appellant submits that if the Commission wants to order to collect the banking charge in cash, it should be at the rate of 28.46 paise per unit of energy banked and redrawn and not at the present system of compensating. Hence it is prayed that the banking charges should be fixed at 28.46 paise per unit of energy when banked and redrawn. 17. WEG availing REC The Commission in its order at Paragraph No. 8.2.15 decided that with respect to WEGs availing REC, one month adjustment period is allowed as permitted for conventional power. The unutilized energy will get lapsed as in the case of conventional power. The Commission is totally wrong on deciding that the units at the end of every month for the captive wind energy generators availing REC would get lapsed as in the case of conventional power. It would be worth to note that there are number of generators already wheeling the captive generation with the condition of Wheeling and surplus units as sale to board category. This refers, the generated units are adjusted for their consumption and remaining units are considered as sale to utility and applicable tariff is paid to them. By choosing the REC route, the captive generators are not to be denied with the benefit of atleast treating the surplus units as sale to Utility since none of the units generated is going to be wasted. It is only consumed through the utility by other consumers as generation and consumption takes place simultaneously and the Utility is also realizing money for such consumption from other consumers. Hence, the concept of lapsing the unutilized units for the captive consumers at the end of every month under REC route is not correct and fair. It also amounts to unjust enrichment at

the cost of the REC captive consumers which is unsustainable in law. Therefore, for surplus unit at the end of each month should be treated as sold to Board and accordingly they should be allowed to get atleast the APPC cost fixed by Commission from time to time. Therefore, the present portion of the impugned order in para 8.2.15 in so far lapsing of the unutilized units for REC captive consumers should be set aside and direction may be issued to encash the same atleast for the APPC cost. 18. Grid availability Charges Energy Charges The Commission in the Impugned Order at Paragraph No. 8.7.2.1 has stated that if the captive user / third party user is not a consumer of the distribution licensee, the user shall pay the charges as applicable to the temporary supply of that voltage category. It is to be noted that all the users should become a consumer of the distribution licensee of their region without which they will not be able to avail the open access with any generator. Hence, the specified condition is not realistic and therefore, it may not happen at all and hence, it liable to be set aside. 19. Demand Charges The Commission in this order stated that the TANGEDCO has opposed to continue the deemed demand concept which was originally introduced by the Commission in 2006 and continued in 2009 stating that they are unable to recover the full demand charges relating to providing all the infrastructural facilities as well as tying up of the generation capacity. The Commission has examined and observed as follows in the Impugned Order that: a. When the captive power plant is not generating power, the licensee is obligated to provide power supply to the captive consumer. During this period no wheeling charges is recoverable as the captive generators is not injecting any power. The fixed charges payable to other generating stations or procurement of power from the market to meet such contingency will devolve on the licensee. b. If the captive generator is generating throughout the year, he could always reduce the sanctioned demand and control his demand charges for the supply to be made by the licensee. c. Since the open access regulation cast a duty on the licensee to provide electricity to all open access customers whether captive or otherwise, the fixed charge is getting shifted to the licensee.

19.1 In this context, it is worthwhile to look in to the tariff pattern of the consumers. HT consumers are charged with two part tariff: The first part is Energy charges based on the units actually consumed by them and second part is Demand charges based on their Maximum demand reached or 90% of the sanctioned demand whichever is higher. 19.2 After enactment of the Electricity Act 2003, all the distribution and transmission companies are filing their ARR to the respective State Commission and getting them approved. While doing so, the financial cost of capital asset (Infrastructure) like depreciation, interest on debt, RoE, O & M, etc. are considered for arriving at the average cost of supply. In the case of energy supplied by the distribution companies, these expenses are added to the cost of generation/energy purchased so as to arrive the cost of supply. Similarly, wheeling charges are arrived by considering all these financial costs for the distribution network. Hence, the view of the TANGEDCO stating that the demand charges are collected to provide the infrastructural facilities has no relevance in the present scenario and is nothing but an attempt to totally mislead all. Therefore, any separate charge collected for providing infrastructure facilities will amount to double collection. The Commission in its Tariff Order No. 1 of 2012 calculated the average cost of realization at Rs.4.99 per unit. From HT consumers, the tariff rate is more than Rs.4.99 per unit which includes energy charges plus demand charges. The excess amount so collected is only a cross subsidy component. The average cost of realization is Rs.4.99 per unit which includes all cost i.e. Generation/Purchase cost plus financial cost for transmission (transmission charges) and distribution (wheeling charges). Therefore it is evident that the tariff includes all costs including wheeling charges also. An open access consumer getting access to the distribution network pays either tariff which is inclusive of wheeling charges or more wheeling charges as open access charge. The distribution network used by the consumer realizes its wheeling charge either by tariff to the distribution licensee or by recovering wheeling charges by open access transaction. At no point of time, there is no stranded cost for distribution asset. The observation of the Commission in sub para (a) of para 8.7 2.2.2 that no wheeling charge is recoverable as the captive generator is not injecting any power is a mistake of fact and error apparent on the very face of the record. It is to be noted that the demand charges are made to maintain the grid stability and also to control the grid by the distribution / transmission utility only. cost of supply is met by the distribution company. 19.3 Hence, the demand charges are being collected only in respect of erection and maintenance of sub-stations. The Impugned Order of the Commission clearly These charges become the part of the consumption charges only so that the average

indicates that the cost of supply includes generation, transmission and all other expenses including the development of infrastructure. Hence, there wont be any need of collecting separate demand charges. However, when the Electricity Act 2003 was introduced and separate companies are formed for transmission and distribution, each company is filing ARR and took the approval of the Commission. Accordingly, the transmission company is charging transmission charges separately and collecting the same. If that be the position there should not be any demand charges. However, during the past two orders, the Commission came to the conclusion that the wind energy is bringing energy in to the grid and based on the average PLF, it ordered that the wind power also carried some demand on its generation. Now, the present order removing the deemed demand has no justification. In fact, the Commission in paragraph 6.1.5 confirmed that wind energy contributes around 30% in terms of demand share during the peak wind season. If that be the case, instead of continuing to provide deemed demand charges, the Commission ordered for withdrawal of deemed demand concept which is totally unfair. 19.4 When energy is injected in to a grid, automatically demand is also deemed to be injected, as energy and demand are two sides of the same coin. A quantum of energy injected would result in a quantum of MD and this concept has been fully accepted and orders have been made to allow deemed demand for the wind energy captive consumers in Order No.3 of 2006 dated 15.05.2006 and 1 of 2009 dated 20.03.2009. The last order dated 20.03.2009 is extracted below for the sake of convenience. 8.7.4 Demand charges 8.7.4.1. In the case of a wind energy generator, there are two components of demand, namely, the demand supplied by the distribution licensee and the demand supplied by the wind energy generator. In regard to the former, the licensee is entitled to recover demand charges in terms of the Tariff Order of the Commission dated 15-3-2003. The demand supplied by the generator is estimated by the Commission in the following manner. 8.7.4.2. Assuming a capacity utilization figure of 27.15% and assuming that an average 65% of wind energy generated, (as per the data available with the Commission) is used for captive / third party consumption and assuming an average power factor of 0.9, the Commission arrives at a figure of 19.61% as the demand contributed by the generator. The energy supplied in each month by the wind energy generator shall be converted to an appropriate demand in KVA and the demand charges at 80.39% of

the rates prescribed in the Tariff Order is payable by the wind energy generator in regard to that converted demand. 8.7.4.3. The example below illustrates the case. The demand charges payable by the consumer on open access will be calculated as below: Total generated units consumed by the consumer on open access divided by (30 x 24 x actual PF recorded during the billing month) A Recorded demand (or) 90% of sanctioned demand, whichever is higher B The demand supplied by the Licensee (B A) C The demand charges payable by consumer on open access = [A x (80.39%) of applicable demand charges + (C x applicable demand charges)] At current rate Demand Charges payable (Rs.)= [ (A x 0.8039 x 300) + (C x 300)] 8.7.4.4. The TNEB has suggested that deemed demand concept may be abandoned since the demand charges are meant to recover the fixed charges incurred by the Board for creating the required assets. It needs to be clarified here that the cost of the asset created by the TNEB including the transmission and distribution lines are fully recovered in terms of the Tariff Order of the Commission. The shortfall in tariff revenue on account of the demand contributed by wind energy generators can be factored into the Annual Revenue Requirement of the TNEB and accounted for in the subsequent tariff revision as prescribed in the Electricity Act 2003 and the Tariff Regulations 2005 of the Commission. On the other hand, the wind energy generators have represented that the distribution licensee should recover demand charges only for the net energy supplied by them. The Commission rejects this proposition because the licensee is obliged at all times to supply the committed demand to the consumer despite wide ranging fluctuations in the availability of wind energy. 19.5 With the above discussion as made in the earlier order, the Commission has justified in allowing the deemed demand benefit to all the wind energy captive consumers by assigning a formula. Hence, if we look in to the Commissions views made at that time it would be evident that the allowing of deemed demand is fair. But however, without analyzing all the

above aspects, the Commission this time in issuing the Impugned Order has taken a unilateral view and accordingly, ordered to withdraw the deemed demand benefit for all wind energy captive consumers which is arbitrary, unfair and therefore, requires to be set aside totally. 19.6 The Commission has seriously erred in coming in to the conclusion that the captive generator generating throughout the year could reduce the sanctioned demand and control their demand charges. For example; The sanctioned demand of the consumer is 1000 KVA The consumer is consuming with the 80% load factor for one hour Assuming that he is availing open access and receiving energy per hour He is availing energy per hour from the distribution Licensee 240 units 560 units 800 units

Will it be possible to reduce his sanctioned demand to 300 KVA to avail 240 units from the licensee? Since, he needs 800 units, he has to retain the sanctioned demand only at 1000 KVA. Otherwise, he is liable to pay excess demand charges if sanctioned demand is reduced to 300 KVA. Hence, it is not correct to state that there is a possibility to reduce the sanctioned demand when the captive generator generating throughout the year. 19.7 The last observation of the Commission in the Impugned Order is totally wrong and untenable. The Commission observes in the Impugned Order that since the open access regulations cast a duty on the licensee to provide power to all open access consumers whether captive or otherwise, the fixed charges get shifted to the licensee. This observation is totally wrong. The tariff order for retail energy already covers the average cost of realization by way of charging on energy and the transmission company charging on the transmission of energy. Hence, there could not

be any more shifting of fixed charges on the licensee to recover further on demand charges. Then it amounts to double charging. 19.8 When the Commission itself has justified in the introduction of deemed demand concept based on certain principles in its Order dated 15.05.2006 which was again continued by Order dated 20.03.2009, the Commission should not have taken totally a contrary decision based on certain grounds which are totally unrealistic and unacceptable. As the retail tariff covers all expenses and nothing is left over, there could not be any further fixation of demand charges. Hence, the Commission was not justified in withdrawing the deemed demand charges for the wind energy injected in to the grid. 19.9 Hence, the Impugned Order of the Commission in para 8.7.2.2 in so far as it relates to withdrawal of deemed demand benefit for WEGs is liable to be set aside and there should be a direction to continue the benefit of deemed demand for all WEGs as available at present. 20 Scheduling and System Operation Charges The Commission in Para 8.9 of the Impugned Order has fixed the Scheduling and System Operation Charge at Rs.600 per 2 MW per day and proportionately in accordance with the actual capacities. It is submitted that it is well known fact that wind energy being an infirm power, could not be scheduled at the present conditions. When the power itself could not be scheduled due to the very infirm nature of the wind power, order to collect the Scheduling and System Operation Charges would not be realistic and reasonable. The Commission has greatly erred in the matter of fixing the Scheduling and System Operation Charges which is not realistic to a power which could not be scheduled at the present point of time. Hence, this unrealistic charge of Scheduling and System Operation Charge should be set aside totally. 21 Grounds raised with legal provisions As in Para 8, 9 and 10 22. Matters not previously filed or pending with any other Court The Appellant further declares that the Appellant had not previously filed any writ petition or suit regarding the matter in respect of which this appeal

is preferred before any Court or any other authority nor any such writ petition or suit is pending before any of them. 23. Specify below explaining the grounds for such relief (s) and the legal provisions, if any, relied upon. As set out in Paras 8 to 20 above. 24. Details of Interim Application, if any, preferred along with Appeal. (i) The Impugned Order No.6 of 2012 dated 31.07.2012 vide para 9.2 makes the order applicable to all WEGs irrespective of the date of commissioning. However, the Regulation No.6 of the TNERC-Power Procurement from New and Renewable Sources of Energy Regulations, 2008 makes it clear that when the Commission revisits the tariff and allied issues, the revision shall be applicable only to the Generator of New and Renewable energy sources commissioned after the date of such revised order. Therefore, the impugned order is totally inconsistent and contrary to the provisions as contained in Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Therefore, it is just, reasonable and necessary that this Hon'ble Appellate Tribunal may be pleased to pass an Order of INTERIM STAY of operation and further proceedings of the impugned Order No.6 of 2012 dated 31.07.2012 in so far as the members of the petitioner Association are concerned in respect of their WEGs having commissioning dates prior to the impugned order pending disposal of the above Appeal and thus render justice. (ii) Further, it is respectfully prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM INJUNCTION, restraining the 2nd and 3rd Respondents, their men, agents, representatives and sub-ordinates from demanding, collecting banking charges(para 8.2), transmission charges, wheeling charges and line loss charges(para 8.3), grid availability charge(8.7) and Scheduling and system operation charges(para 8.9) in so far as the members of the Petitioner Association are concerned pending disposal of the above Appeal and thus render justice. (iii) Further, it is respectfully prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM DIRECTION, directing the 2nd and 3rd Respondents, their men, agents, representatives and

sub-ordinates to extend the deemed demand facility as usual as per the existing Energy Wheeling Agreements in so far as the members of the Petitioner Association are concerned pending disposal of the above Appeal and thus render justice. (iv)It is further submitted that unless this Honble Appellate Tribunal is pleased to pass the above interim orders, great irreparable prejudice and heavy financial loss would be caused to the members of the Petitioner Association who are already reeling under severe power cuts and recession. On other hand, by passing such interims orders as prayed for above, no prejudice would be caused to 2 nd and 3rd Respondents since they would be collecting all the usual charges as agreed in the Energy Wheeling Agreement in force in compliance of the earlier tariff orders passed by the 1st Respondent on 15.05.2006 and 20.03.2009. 25. Details of appeal/s, if any preferred before this Appellate Tribunal against the same impugned order/direction, by Respondents with numbers, dates and interim order, if any passed in that appeal (if known). No other appeal is filed against the same Impugned Order. 26. Details of Index INDEX

Sl.No. I II III IV 1.

Date

Particulars Synopsis and List of Dates and Events Appeal with Affidavit Application for Interim Stay with Affidavit List of Enclosures TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 Tariff Order No.1 of 2011 of 1st Respondent Public Notice of 1st Respondent Comments filed by the Appellant in pursuance of the Public Notice Tariff Order No.4 of 2011 of 1st

Page

08.02.2008

2. 3. 4. 5.

08.04.2011 08.09.2011 29.09.2011 15.12.2011

6. 7.

24.05.2012 04.06.2012

Respondent Notice fixing the Stakeholders Hearing on 8th June 2012 Letter of the 1st Respondent Commission sent to the Appellant intimating no Consultative Paper would be released Written Submission filed during the Stakeholders Hearing on 08.06.2012 by the Appellant Order No.3 of 2012 of the 1st Respondent The Impugned Order of the 1st Respondent Tamilnadu Regulatory Commission in T.R.No.6 of 2012 Working Instruction issued by the 2nd Respondent TANGEDCO Memo of 2nd Respondent providing instructions to withdraw deemed demand concept Demands raised by the SEs of 2nd Respondent based on the working instruction Vakalathnama

8.

08.06.2012

9. 10.

30.06.2012 31.07.2012

11. 12.

. 08.2012 30.08.2012

13.

24.09.2012

27.

Particulars of fee payable and details of bank draft in favour of Pay and Accounts Officer, Ministry of Power, New Delhi in respect of the fee for appeal. Name of the Bank _________________ Branch ________ DD No. _________ Dated. ______ payable at New Delhi.

28.

List of enclosures: INDEX

Sl.No. I II III IV 1.

Date

Particulars Synopsis and List of Dates and Events Appeal with Affidavit Application for Interim Stay with Affidavit List of Enclosures TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008

Page

08.02.2008

2. 3. 4. 5. 6. 7.

08.04.2011 08.09.2011 29.09.2011 15.12.2011 24.05.2012 04.06.2012

Tariff Order No.1 of 2011 of 1st Respondent Public Notice of 1st Respondent Comments filed by the Appellant in pursuance of the Public Notice Tariff Order No.4 of 2011 of 1st Respondent Notice fixing the Stakeholders Hearing on 8th June 2012 Letter of the 1st Respondent Commission sent to the Appellant intimating no Consultative Paper would be released Written Submission filed during the Stakeholders Hearing on 08.06.2012 by the Appellant Order No.3 of 2012 of the 1st Respondent The Impugned Order of the 1st Respondent Tamilnadu Regulatory Commission in T.R.No.6 of 2012 Working Instruction issued by the 2nd Respondent TANGEDCO Memo of 2nd Respondent providing instructions to withdraw deemed demand concept Model Demand raised by the SE of 2nd Respondent based on the working instruction Vakalathnama

8.

08.06.2012

9. 10.

30.06.2012 31.07.2012

11. 12.

. 08.2012 30.08.2012

13.

24.09.2012

V 29.

Whether the order appealed as communicated in original is filed? If not, explain the reason for not filing the same. The Order appealed as communicated in original is filed herewith.

30.

Whether the appellant/s is ready to file written submissions/ arguments before the first hearing after serving the copy of the same on Respondents. Yes

31.

Whether the copy of memorandum of appeal with all enclosures has been forwarded to all respondents and all interested parties, if so,

enclose postal receipt/courier receipt in addition to payment of prescribed process fee. Yes 32. Any other relevant or material particulars/details which the Appellant deems necessary to set out: Nil 33. Relief (s) Sought INTERIM PRAYERS: For the reasons stated above, it is prayed that this Hon'ble Appellate Tribunal may be pleased to pass an Order of INTERIM STAY of operation and all further proceedings of the impugned Order No.6 of 2012 dated 31.07.2012 issued by the 1st Respondent in so far as para 8.2, 8.3, 8.7 and 8.9 relating to banking charges, transmission, wheeling and transmission loss compensation charges and grid availability charges and Scheduling and system operation charges respectively and para 8.7.2.2 relating to withdrawal of deemed demand benefits in so far as the members of the petitioner Association are concerned in respect of their WEGs having commissioning dates prior to the impugned order pending disposal of the above Appeal and thus render justice. For the reasons stated above, it is prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM INJUNCTION, restraining the 2nd and 3rd Respondents, their men, agents, representatives and sub-ordinates from demanding and collecting banking charges(para 8.2), transmission charges, wheeling charges and line loss charges(para 8.3), grid availability charges(8.7) and Scheduling and system operation charges(para 8.9) in so far as the members of the Petitioner Association are concerned pending disposal of the above Appeal and thus render justice. For the reasons stated above, it is prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM DIRECTION, directing the 2nd and 3rd Respondents, their men, agents, representatives and sub-ordinates to extend the deemed demand facility as usual as per the existing Energy Wheeling Agreements in so far as the members of the

Petitioner Association are concerned pending disposal of the above Appeal and thus render justice. MAIN RELIEF: For the reasons stated above, it is prayed that this Honble Appellate Tribunal for Electricity may be pleased to call for the records of the 1 st Respondent Commission in its Order No.6 of 2012 dated 31.07.2012 in so far as paras 8.2, 8.3, 8.7, 8.9 and 8.7.2.2 relating to banking charges, transmission, wheeling and transmission loss compensation charges, grid availability charges and Scheduling and system operation charges and withdrawal of deemed demand benefit respectively, quash the same as illegal, arbitrary, unsustainable in law and against the Regulation 6 of TNERC Power procurement from New and Renewable Sources of Energy Regulations, 2008 and pass such other order or orders as this Honble Appellate Tribunal for Electricity may deem fit and proper in the circumstances of the case in so far as the members of the Petitioner Association are concerned and thus render justice. DATED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPELLANT DECLARATION BY APPELLANT

APPELLANT

The Appellant above named hereby solemnly declares that nothing material has been concealed or suppressed and further declares that the enclosures and typed set of material papers relied upon and filed herewith are true copies of the originals/fair reproduction of the originals thereof. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPELLANT VERIFICATION

APPELLANT

I,

Dr.K.Venkatachalam,

S/o.A.Karuppaih,

Hindu

aged

60

years

representing the Appellant Tamil Nadu Spinning Mills Association as its Chief

Advisor and resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 21 are true to my personal knowledge/ derived from official record and are believed to be true on legal advice and that I have not suppressed any material facts. DATE : 13-09-2012 PLACE :DELHI SIGNATURE OF THE APPELLANT

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI APPELLATE JURISDICTION APPEAL No. _____ OF 2012 BETWEEN TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 00, Tamilnadu. represented by Dr.K.Venkatachalam, its Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents AFFIDAVIT FILED BY THE APPELLANT I, Dr. K.Venkatachalam, son of A.Karuppaih, Hindu, aged 60 years, residing at Sindhu Illam, M2/27, 4th Cross, R.M.Colony, Dindigul 624 001 Tamil Nadu do hereby solemnly affirm and sincerely state as follows :

1.

I am the Chief Advisor of the Appellant Association, viz., Tamil Nadu

Spinning Mills Association and I am duly authorized by the said Appellant to swear this Affidavit on its behalf. I have been dealing with these matters relating to the above mentioned case and I am conversant with the facts of the case. 2. I have read the accompanying Appeal filed against the Impugned Order

dated 31.07.2012 in T.R.No.6 of 2012 passed by the Tamilnadu Electricity Regulatory Commission and I say that the facts stated therein in paras 1 to 33 are based on the records of the Appellant maintained in the ordinary course of its business and believed by me to be true.

APPELLANT VERIFICATION I, the Deponent above named do hereby verify that the contents or my above Affidavit are true to my knowledge, no part of it is false and nothing material has been concealed therefrom. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPELLANT

FORM III (See Rule 20) INTERLOCUTORY APPLICATION IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. represented by Dr.K.Venkatachalam, its Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, represented by its Chairman and Managing Director, 144, Anna Salai, CHENNAI 600 002. (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents/Respondents.

PETITION FOR INTERIM STAY The Applicant above named states as follows : 1. Set out the relief (s) Pending final decision of the Appeal, the Applicant seeks the issuance of the following Interim Stay : For the reasons stated above, it is prayed that this Hon'ble Appellate Tribunal may be pleased to pass an Order of INTERIM STAY of operation and all further proceedings of the impugned Order No.6 of 2012 dated 31.07.2012 issued by the 1st Respondent in so far as para 8.2, 8.3, 8.7 and 8.9 relating to banking charges, transmission, wheeling and transmission loss compensation charges and grid availability charges and Scheduling and system operation charges respectively and para 8.7.2.2 relating to withdrawal of deemed demand benefits in so far as the members of the petitioner Association are concerned in respect of their WEGs having commissioning dates prior to the impugned order pending disposal of the above Appeal and thus render justice. 2. Brief facts A. The Applicant/Appellant is an Association of yarn spinning mills which are HT electricity consumers in the State of Tamil Nadu. The Applicant had earlier filed Petitions before various fora on issues relating to the rights of its members in the Electricity Sector. B. The First Respondent is the Tamil Nadu Electricity Regulatory Commission and the second Respondent is Tamilnadu Generation and Distribution Corporation Ltd and the Third Respondent is Tamil Nadu Transmission Corporation Ltd

3.

Basis on which Interim stay prayed for 3.1 The Impugned Order in Para 9.2 makes it mandatory that all WEGs irrespective of the commissioning dates should be brought under the Impugned Order and accordingly, all costs have to be paid as per the Impugned Order. But whereas, according to Regulation 6 of TNERCPower procurement from New and Renewable Sources of Energy

Regulations, 2008, any Order of the Commission would bind the WEGs commissioned only after the date of the said Order and therefore, the attempt of the Impugned Order to make it applicable for all WEGs having the commissioning date prior to the date of Impugned Order is an arbitrary exercise of power and therefore, it is against law. 3.2 The appellants submits that after coming in to force of the Impugned Order, there are four categories of WEGs now functioning in the State of Tamilnadu and each are governed by a separate practice and Order and accordingly, with separate Power Purchase Agreement or Energy Wheeling Agreement as the case may be depending up on the date of commissioning of the WEG. 3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA (Power Purchase Agreement) and not interfered by the Commissions Order dated 15.05.2006 on wind energy in any manner. These WEGs however, have the option to renegotiate and can come to the benefits of the Commissions Tariff Order on Wind Energy dated 15.05.2006 by renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA (Energy Wheeling Agreement) as the case may be. In order to make applicable the Order dated 15.05.2006 of the Commission, there was a specific provision made available in the Order itself to accommodate the option of renegotiation under Clause 4. Further, they have the option to continue with the existing arrangement under PPA Scheme itself if they are not willing for a renegotiation and as such, if they are not willing, they can continue in the old scheme itself without renegotiation towards the EPA/EWA Scheme. 3.4 Same is the case when the next Tariff Order No.1 of 2009 dated 20.03.2009 came in to force from 19.09.2008 onwards. Accordingly, except for the purpose of Tariff for all other terms and conditions, renegotiation scope was provided for re-entering in to new EWA in Clause 4 of the Order dated 20.03.2009. 3.5 However, in the present impugned Order, the Respondent Commission has issued orders totally contradicting the existing schemes by which an existing WEG can either opt for the new scheme or to continue with the old scheme which was under the sole option of the WEG owner. Even though such a scheme has to be provided under the concept of promissory estoppels and legitimate expectation, the Respondent Commission has greatly erred in this matter and accordingly, no such

option was made available in the Impugned Order. Besides to the same, the Impugned Order is having confusing contents in Para 4 and Para 9.2. totally contradicting with each other. 3.6 Para 4 of the Impugned Order says as follows: Since changes are made in various provisions of the previous Order, the Commission considers it appropriate to give effect to all of the provisions contained in this Tariff Order only prospectively. This Order, therefore, shall come in to effect from 01.08.2012. But whereas Para 9.2 of the Impugned Order says as follows: Other related charges and terms and conditions specified in the Order shall be applicable to all the wind energy generators, irrespective of the date of commissioning The impugned Order therefore, mandates heavy costs on captive consumption of wind energy with effect from 01.08.2012 and however, the EWA already in force is not in support of the said costs to be collectable from the executants of the EWA. Hence, any WEG owner could opt to continue to be in the old agreement and therefore, there is no mandatory necessity to switch over to the new system from 01.08.2012 onwards. This liberty was provided in both the earlier orders and however, only in the Impugned Order, it has been fully wiped out. For no reason, the existing WEG owner could be compelled to go for the new Order which costs him heavily on various areas and therefore, such a compulsion is against the principles of natural justice.

3.7

Each WEG is covered by a separate Energy Wheeling Agreement and as new charges are likely to be levied in place of old charges as per the impugned Order, the existing WEG owners may not opt to come for the new Order and they may like to continue to remain in the existing EWA itself without altering their status. Based on the terms and conditions prevailed during the time of taking investment decisions, the WEG owners has come forward for going to the wind power. It is not therefore fair to drive them to a new set of costs which were not even thought of, when the investment decision was originally taken. Now asking them for a sweep change is not fair and reasonable on the principles of promissory

estoppels and legitimate expectation. All investments prior to 31.07.2012 (ie) before the issuance of the impugned Order have happened only based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now without any rhyme or reason, to ask them also to come for the new Order with high costs is against the principles of the natural Justice, promissory estoppels and legitimate expectation. 3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has made as follows: This order contains many provisions not only relating to tariff but also relating to other terms and conditions. Since charges are made in various provisions of the previous order, the Commission considers it appropriate to give effect to all the provisions contained in this tariff Order only prospectively. This Order, therefore, shall come into effect from 01.08.2012. But, very much contrary to its own Order in Para No.4, in Para No.9.2 the 1st Respondent Commission has made it as follows. 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. 3.9 Hence, from the contradictory statements of the 1st Respondent Commission, the 2nd Respondent TANGEDCO has given working instructions to make applicable all the new charges and all other new terms and conditions to all WEGs who are totally controlled by a different Energy Wheeling Agreement and accordingly, the 2nd Respondent has started raising bills for new charges even though there is no provision in the Energy Wheeling Agreement to claim such charges. The existing benefits like deemed demand charges were totally withdrawn even without a notice. Hence, due to the erroneous and anomalous nature of the impugned Order of the 1st Respondent, all WEG owners/members of the Appellant are put in too much of financial difficulty and hardship leading to irreparable loss during every month from 01.08.2012 onwards. 3.10 Further, under the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008, under Regulation 6, it has been made as follows: 6. Agreement and Control period

The tariff as determined by the Commission specific order for the purchase

by a general or

of power from each type of

renewable source by the distribution licensee as referred to in clause 4(3) shall remain in force for such period as specified by the Commission in such tariff orders. The control period may ordinarily be two years. When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. 3.11 However, much contrary to the above Regulation, the Respondent Commission in Para 9.2 of the Impugned Order, makes it mandatory the contents of the Order totally applicable for all the WEGs irrespective of the date of commissioning. The Regulation mandates that When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. But much contrary to the same in Para 9.2 of the Impugned Order the Respondent Commission states as follows: 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. Hence, the Impugned Order is totally against the very letter and spirit of the Regulation and on this score alone, the Impugned Order needs to be set aside.

3.12

While the 1st Respondent Commission dealing with execution of Energy Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has made it as follows:

8.17. Energy Wheeling Agreement (EWA) The format for Energy Wheeling Agreement (EWA) shall be evolved as specified in the Commissions regulation in force. The period of agreement and other terms and conditions shall be as per the terms of open access regulations in force issued by the Commission.

Hence, even assuming that the Order is applicable for all WEGs irrespective of the date of commissioning, in order to enforce the various terms and conditions stipulated in the impugned Order, it requires an Energy Wheeling Agreement and accordingly, after getting it signed by the parties concerned only, this Order would be given effect and whereas the 2nd Respondent has not cared to proceed to get the EWA draft vetted and approved by the Commission after following the due process of stakeholders consultation. This again makes the working instructions invalid as no new Energy Wheeling Agreement was executed and no text of Energy Wheeling Agreement was circulated for providing opportunity for the stakeholders in the matter of finalization of the text of new Energy Wheeling Agreement. 3.13 The Appellant submits that each WEG has a specific commissioning date and according to the date of commissioning, the said WEG is governed by an Order of the Commission and therefore, unless the WEG owner opts for renegotiation of the existing agreement, the new Order and the various terms and conditions stipulated in the new Order cannot become automatically enforceable with the WEGs commissioned before the date of issuance of the Order in any manner. All the previous orders have very specifically made this clause under the heading of Applicability of the Order under Para 4 both in Order No. 3 dated 15.05.2006 and in Order No.1 dated 20.03.2009. Such an arrangement is required and goes in concurrence with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 quoted supra. For the sake of convenience of reference the said paragraph in Order No.3 dated 15.05.2006 is reproduced below: 4.0 APPLICABILITY OF ORDER This order shall come in to force from the date of its issue. This order shall be applicable to all future and renewal of existing contracts/agreements for the Non-Conventional Energy Sources (NCES) based Generating Plants and Non-Conventional Energy Sources based Co-Generation Plants located within the State of Tamilnadu. It should be noted that the existing contracts and agreements between NCES based generators and the distribution licensee signed prior to the date of issue of this order would continue to remain in force. However, the NCES based generators and the distribution licensees shall have the option to mutually renegotiate the existing agreements or contracts if any, in line with this order even before the expiry of the existing agreements or contracts. Any

renewal of the said contracts/agreements, new contracts/agreements shall be in line with this order. 3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the Commissioned has made as follows: 4. Applicability of this Order Order No.3 dated 15.05.2006 of the Commission lays down a control period of three years for that order and therefore, normally the next order should have taken effect from 15.05.2009. The Commission in the Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has ruled that the control period of three years specified in order No.3 dated 15.05.2006 is waived from the date of issue of that Order. The control period of three years, thus, stands terminated on 19.09.2008. Therefore, the Commission holds that all the wind energy generators commissioned on or after 19.09.2008 shall become eligible for the benefits of the present order, subject to the condition that the monetary benefits shall accrue from the date of this order. The existing agreements between the wind energy generators and the distribution licensee shall continue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. The agreement between the wind generators and the distribution licensee in relation to all machines commission on or after 19.09.2008 shall be in conformity with this order.

3.15

The above two orders of the Commission perfectly fit with the Principles of natural Justice coupled with the theory of promissory estoppels and legitimate expectation. Further, such a provision is also in line with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Each WEG has come in to being by a large capital investment. Hence, what set of terms and conditions are applicable at the time of making investment would continue to be in force till the WEG promoter opts to continue with it as the investment decision has happened only with reference to the knowledge, information, rights and responsibilities made available at the time of making investment decisions. The members of the Appellant having altered their status based on certain terms and conditions prevailed at a point of time when they invested on wind energy, cannot now be unilaterally forced to come for new terms and conditions. Then it becomes an arbitrary exercise and the impugned Order could only be construed to have the effect of unilateral

and arbitrary exercise of power. Further it is violative of the principles set out under Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. 3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement (EWA) by each of the members of the Appellant executed, it has been made as follows: 11. Terms and Conditions agreement period: (4) The agreement shall be valid for a minimum period of 5 years. (5) The parties to the agreement shall be given the option to exit for violation of the agreement after serving a notice of three months on the other party. (6) The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with the Commissions order in force. 3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is a liberty extended to parties that either they can renegotiate the existing agreement for going to the new agreement as per the new orders if any or they can continue to remain as such in the existing agreement itself. The option is therefore, vested with the party concerned and therefore, no party could be compelled or forced to accept any new terms and conditions for which no agreement was signed earlier. This option made available to the WEGs is totally wiped out in the impugned Order. The impugned Order unilaterally forces all the WEG owners irrespective of the date of commissioning to come for the new arrangement whereby heavy costs are involved with large civil consequences. 3.18 Due to the implementation of the working instructions of the 2nd Respondent based on the impugned Order of the 1st Respondent, every member of the Appellant is losing heavy money every month due to certain new charges as leviable due to the fresh terms and conditions of the new Order with effect from 01.08.2012 onwards. All the members of the Appellant are totally unaware of the terms and conditions while they made investments and altered their status to erect and commission the WEGs for the purpose of captive consumption. All their investment plans, RoE, etc., have been based only on the available terms and conditions as enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009. Hence, even though the Commission has made it clear in Para No.4 that

the terms and conditions are to be applied prospectively, it has contradicted its own versions and accordingly, in Para No.9.2 it made it to applicable to all WEGs irrespective of the date of commissioning. Therefore, the 1st Respondent Commission has committed a serious error and hence it needs to be corrected and rectified by this Hon'ble Tribunal. 3.19 Therefore, the Appellant humbly prays that the members of the Appellant having made investments and altered their status based up on certain terms and conditions stipulated by such orders which were in force during those points of taking investment decisions, cannot now unilaterally and arbitrarily be directed to come for a new set of terms and conditions by the impugned Order which has a very strong impact on their financial workings and thereby the entire operation becomes totally unviable. The impugned Order imposes serious civil consequences and therefore, it could never be retrospective for any reason. Further, the impugned Order contradicts with each other as far as Para No.4 and Para No.9.2 are concerned. Further, Para 9.2 of the Impugned Order is in total contradiction of Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Hence, it needs to be set aside on this very score alone. 3.20 Further, in having ordered that all WEGs irrespective of their date of commissioning to come for the new Order which casts serious civil consequences to pay more charges, the 1st Respondent has clearly violated the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing but arbitrary exercise of powers, against the approved cannons of law, against the Principles of natural Justice and against the Principles of promissory estoppels and legitimate expectation and therefore, it is expropriatory under Article 14 of the Constitution of India and hence, the Order needs to be struck down for this score also. 4. Balance of convenience, if any The Appellant has made out a prima facie case in favour of the Appellant and the balance of convenience is also in favour of the Appellant only. Since the members of the Appellant are already paying the notified charges as per the orders in force and also as per the Energy Wheeling Agreement they have entered with the 2nd Respondent there is no loss of revenue to the 2nd or the 3rd Respondent in any manner and as such, the Interim Order prayed for may kindly be granted.

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has been concealed or suppressed and further declares that the enclosures and typed set of material papers relied upon and filed herewith are true copies of the originals/fair reproduction of the originals thereof. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT VERIFICATION

APPLICANT

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing the Applicant Tamil Nadu Spinning Mills Association as its Chief Adviser and resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are true to my personal knowledge/ derived from official record and are believed to be true on legal advice and that I have not suppressed any material facts. DATE : 13-09-2012 PLACE : SIGNATURE OF THE APPLICANT

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 BETWEEN TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. Represented by Dr.K.Venkatachalam Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents/Respondents. AFFIDAVIT FILED BY THE APPLICANT

I, K. Venkatachalam, son of

A. Karuppaiah, Hindu, aged about

60 years,

residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil Nadu do hereby solemnly affirm and sincerely state as follows : -

1.

I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear to this Affidavit on its behalf. I have been dealing with this matters relating to the above mentioned case and I am conversant with the facts of the case. 2. I have read the accompanying Interlocutory Application seeking Interim

stay pending the Appeal filed against the Order dated 31.07.2012 in T.R.No.6 of 2012 passed by the Tamil Nadu Electricity Regulatory Commission and I say that the facts stated therein in paras 1 to 4 are based on the records of the Applicant maintained in the ordinary course of its business and believed by me to be true.

APPLICANT VERIFICATION I, the Deponent above named do hereby verify that the contents or my above Affidavit are true to my knowledge, no part of it is false and nothing material has been concealed therefrom. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT

FORM III (See Rule 20) INTERLOCUTORY APPLICATION IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. represented by Dr.K.Venkatachalam, its Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, represented by its Chairman and Managing Director, 144, Anna Salai, CHENNAI 600 002. (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents/Respondents.

PETITION FOR INTERIM INJUNCTION The Applicant above named states as follows : 1. Set out the relief (s) Pending final decision of the Appeal, the Applicant seeks the issuance of the following Interim injunction : For the reasons stated above, it is prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM INJUNCTION, restraining the 2nd and 3rd Respondents, their men, agents, representatives and sub-ordinates from demanding and collecting banking charges(para 8.2), transmission charges, wheeling charges and line loss charges(para 8.3), grid availability charges(8.7) and Scheduling and system operation charges(para 8.9) in so far as the members of the Petitioner Association are concerned pending disposal of the above Appeal and thus render justice.

2.

Brief facts A. The Applicant/Appellant is an Association of yarn spinning mills which are HT electricity consumers in the State of Tamil Nadu. The Applicant had earlier filed Petitions before various fora on issues relating to the rights of its members in the Electricity Sector. B. The First Respondent is the Tamil Nadu Electricity Regulatory Commission and the second Respondent is Tamilnadu Generation and Distribution Corporation Ltd and the Third Respondent is Tamil Nadu Transmission Corporation Ltd

3.

Basis on which Interim injunction prayed for 3.1 The Impugned Order in Para 9.2 makes it mandatory that all WEGs irrespective of the commissioning dates should be brought under the Impugned Order and accordingly, all costs have to be paid as per the Impugned Order. But whereas, according to Regulation 6 of TNERCPower procurement from New and Renewable Sources of Energy Regulations, 2008, any Order of the Commission would bind the WEGs

commissioned only after the date of the said Order and therefore, the attempt of the Impugned Order to make it applicable for all WEGs having the commissioning date prior to the date of Impugned Order is an arbitrary exercise of power and therefore, it is against law. 3.2 The appellants submits that after coming in to force of the Impugned Order, there are four categories of WEGs now functioning in the State of Tamilnadu and each are governed by a separate practice and Order and accordingly, with separate Power Purchase Agreement or Energy Wheeling Agreement as the case may be depending up on the date of commissioning of the WEG. 3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA (Power Purchase Agreement) and not interfered by the Commissions Order dated 15.05.2006 on wind energy in any manner. These WEGs however, have the option to renegotiate and can come to the benefits of the Commissions Tariff Order on Wind Energy dated 15.05.2006 by renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA (Energy Wheeling Agreement) as the case may be. In order to make applicable the Order dated 15.05.2006 of the Commission, there was a specific provision made available in the Order itself to accommodate the option of renegotiation under Clause 4. Further, they have the option to continue with the existing arrangement under PPA Scheme itself if they are not willing for a renegotiation and as such, if they are not willing, they can continue in the old scheme itself without renegotiation towards the EPA/EWA Scheme. 3.4 Same is the case when the next Tariff Order No.1 of 2009 dated 20.03.2009 came in to force from 19.09.2008 onwards. Accordingly, except for the purpose of Tariff for all other terms and conditions, renegotiation scope was provided for re-entering in to new EWA in Clause 4 of the Order dated 20.03.2009. 3.5 However, in the present impugned Order, the Respondent Commission has issued orders totally contradicting the existing schemes by which an existing WEG can either opt for the new scheme or to continue with the old scheme which was under the sole option of the WEG owner. Even though such a scheme has to be provided under the concept of promissory estoppels and legitimate expectation, the Respondent Commission has greatly erred in this matter and accordingly, no such option was made available in the Impugned Order. Besides to the same,

the Impugned Order is having confusing contents in Para 4 and Para 9.2. totally contradicting with each other. 3.6 Para 4 of the Impugned Order says as follows: Since changes are made in various provisions of the previous Order, the Commission considers it appropriate to give effect to all of the provisions contained in this Tariff Order only prospectively. This Order, therefore, shall come in to effect from 01.08.2012. But whereas Para 9.2 of the Impugned Order says as follows: Other related charges and terms and conditions specified in the Order shall be applicable to all the wind energy generators, irrespective of the date of commissioning The impugned Order therefore, mandates heavy costs on captive consumption of wind energy with effect from 01.08.2012 and however, the EWA already in force is not in support of the said costs to be collectable from the executants of the EWA. Hence, any WEG owner could opt to continue to be in the old agreement and therefore, there is no mandatory necessity to switch over to the new system from 01.08.2012 onwards. This liberty was provided in both the earlier orders and however, only in the Impugned Order, it has been fully wiped out. For no reason, the existing WEG owner could be compelled to go for the new Order which costs him heavily on various areas and therefore, such a compulsion is against the principles of natural justice.

3.7

Each WEG is covered by a separate Energy Wheeling Agreement and as new charges are likely to be levied in place of old charges as per the impugned Order, the existing WEG owners may not opt to come for the new Order and they may like to continue to remain in the existing EWA itself without altering their status. Based on the terms and conditions prevailed during the time of taking investment decisions, the WEG owners has come forward for going to the wind power. It is not therefore fair to drive them to a new set of costs which were not even thought of, when the investment decision was originally taken. Now asking them for a sweep change is not fair and reasonable on the principles of promissory estoppels and legitimate expectation. All investments prior to 31.07.2012

(ie) before the issuance of the impugned Order have happened only based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now without any rhyme or reason, to ask them also to come for the new Order with high costs is against the principles of the natural Justice, promissory estoppels and legitimate expectation. 3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has made as follows: This order contains many provisions not only relating to tariff but also relating to other terms and conditions. Since charges are made in various provisions of the previous order, the Commission considers it appropriate to give effect to all the provisions contained in this tariff Order only prospectively. This Order, therefore, shall come into effect from 01.08.2012. But, very much contrary to its own Order in Para No.4, in Para No.9.2 the 1st Respondent Commission has made it as follows. 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. 3.9 Hence, from the contradictory statements of the 1st Respondent Commission, the 2nd Respondent TANGEDCO has given working instructions to make applicable all the new charges and all other new terms and conditions to all WEGs who are totally controlled by a different Energy Wheeling Agreement and accordingly, the 2nd Respondent has started raising bills for new charges even though there is no provision in the Energy Wheeling Agreement to claim such charges. The existing benefits like deemed demand charges were totally withdrawn even without a notice. Hence, due to the erroneous and anomalous nature of the impugned Order of the 1st Respondent, all WEG owners/members of the Appellant are put in too much of financial difficulty and hardship leading to irreparable loss during every month from 01.08.2012 onwards. 3.10 Further, under the TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008, under Regulation 6, it has been made as follows: 6. Agreement and Control period

The tariff as determined by the Commission specific order for the purchase

by a general or

of power from each type of

renewable source by the distribution licensee as referred to in clause 4(3) shall remain in force for such period as specified by the Commission in such tariff orders. The control period may ordinarily be two years. When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. 3.11 However, much contrary to the above Regulation, the Respondent Commission in Para 9.2 of the Impugned Order, makes it mandatory the contents of the Order totally applicable for all the WEGs irrespective of the date of commissioning. The Regulation mandates that When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. But much contrary to the same in Para 9.2 of the Impugned Order the Respondent Commission states as follows: 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. Hence, the Impugned Order is totally against the very letter and spirit of the Regulation and on this score alone, the Impugned Order needs to be set aside.

3.12

While the 1st Respondent Commission dealing with execution of Energy Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has made it as follows:

8.17. Energy Wheeling Agreement (EWA) The format for Energy Wheeling Agreement (EWA) shall be evolved as specified in the Commissions regulation in force. The period of agreement and other terms and conditions shall be as per the terms of open access regulations in force issued by the Commission.

Hence, even assuming that the Order is applicable for all WEGs irrespective of the date of commissioning, in order to enforce the various terms and conditions stipulated in the impugned Order, it requires an Energy Wheeling Agreement and accordingly, after getting it signed by the parties concerned only, this Order would be given effect and whereas the 2nd Respondent has not cared to proceed to get the EWA draft vetted and approved by the Commission after following the due process of stakeholders consultation. This again makes the working instructions invalid as no new Energy Wheeling Agreement was executed and no text of Energy Wheeling Agreement was circulated for providing opportunity for the stakeholders in the matter of finalization of the text of new Energy Wheeling Agreement. 3.13 The Appellant submits that each WEG has a specific commissioning date and according to the date of commissioning, the said WEG is governed by an Order of the Commission and therefore, unless the WEG owner opts for renegotiation of the existing agreement, the new Order and the various terms and conditions stipulated in the new Order cannot become automatically enforceable with the WEGs commissioned before the date of issuance of the Order in any manner. All the previous orders have very specifically made this clause under the heading of Applicability of the Order under Para 4 both in Order No. 3 dated 15.05.2006 and in Order No.1 dated 20.03.2009. Such an arrangement is required and goes in concurrence with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 quoted supra. For the sake of convenience of reference the said paragraph in Order No.3 dated 15.05.2006 is reproduced below: 4.0 APPLICABILITY OF ORDER This order shall come in to force from the date of its issue. This order shall be applicable to all future and renewal of existing contracts/agreements for the Non-Conventional Energy Sources (NCES) based Generating Plants and Non-Conventional Energy Sources based Co-Generation Plants located within the State of Tamilnadu. It should be noted that the existing contracts and agreements between NCES based generators and the distribution licensee signed prior to the date of issue of this order would continue to remain in force. However, the NCES based generators and the distribution licensees shall have the option to mutually renegotiate the existing agreements or contracts if any, in line with this order even before the expiry of the existing agreements or contracts. Any

renewal of the said contracts/agreements, new contracts/agreements shall be in line with this order. 3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the Commissioned has made as follows: 4. Applicability of this Order Order No.3 dated 15.05.2006 of the Commission lays down a control period of three years for that order and therefore, normally the next order should have taken effect from 15.05.2009. The Commission in the Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has ruled that the control period of three years specified in order No.3 dated 15.05.2006 is waived from the date of issue of that Order. The control period of three years, thus, stands terminated on 19.09.2008. Therefore, the Commission holds that all the wind energy generators commissioned on or after 19.09.2008 shall become eligible for the benefits of the present order, subject to the condition that the monetary benefits shall accrue from the date of this order. The existing agreements between the wind energy generators and the distribution licensee shall continue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. The agreement between the wind generators and the distribution licensee in relation to all machines commission on or after 19.09.2008 shall be in conformity with this order.

3.15

The above two orders of the Commission perfectly fit with the Principles of natural Justice coupled with the theory of promissory estoppels and legitimate expectation. Further, such a provision is also in line with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Each WEG has come in to being by a large capital investment. Hence, what set of terms and conditions are applicable at the time of making investment would continue to be in force till the WEG promoter opts to continue with it as the investment decision has happened only with reference to the knowledge, information, rights and responsibilities made available at the time of making investment decisions. The members of the Appellant having altered their status based on certain terms and conditions prevailed at a point of time when they invested on wind energy, cannot now be unilaterally forced to come for new terms and conditions. Then it becomes an arbitrary exercise and the impugned Order could only be construed to have the effect of unilateral

and arbitrary exercise of power. Further it is violative of the principles set out under Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. 3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement (EWA) by each of the members of the Appellant executed, it has been made as follows: 11. Terms and Conditions agreement period: (7) The agreement shall be valid for a minimum period of 5 years. (8) The parties to the agreement shall be given the option to exit for violation of the agreement after serving a notice of three months on the other party. (9) The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with the Commissions order in force. 3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is a liberty extended to parties that either they can renegotiate the existing agreement for going to the new agreement as per the new orders if any or they can continue to remain as such in the existing agreement itself. The option is therefore, vested with the party concerned and therefore, no party could be compelled or forced to accept any new terms and conditions for which no agreement was signed earlier. This option made available to the WEGs is totally wiped out in the impugned Order. The impugned Order unilaterally forces all the WEG owners irrespective of the date of commissioning to come for the new arrangement whereby heavy costs are involved with large civil consequences. 3.18 Due to the implementation of the working instructions of the 2nd Respondent based on the impugned Order of the 1st Respondent, every member of the Appellant is losing heavy money every month due to certain new charges as leviable due to the fresh terms and conditions of the new Order with effect from 01.08.2012 onwards. All the members of the Appellant are totally unaware of the terms and conditions while they made investments and altered their status to erect and commission the WEGs for the purpose of captive consumption. All their investment plans, RoE, etc., have been based only on the available terms and conditions as enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009. Hence, even though the Commission has made it clear in Para No.4 that

the terms and conditions are to be applied prospectively, it has contradicted its own versions and accordingly, in Para No.9.2 it made it to applicable to all WEGs irrespective of the date of commissioning. Therefore, the 1st Respondent Commission has committed a serious error and hence it needs to be corrected and rectified by this Hon'ble Tribunal. 3.19 Therefore, the Appellant humbly prays that the members of the Appellant having made investments and altered their status based up on certain terms and conditions stipulated by such orders which were in force during those points of taking investment decisions, cannot now unilaterally and arbitrarily be directed to come for a new set of terms and conditions by the impugned Order which has a very strong impact on their financial workings and thereby the entire operation becomes totally unviable. The impugned Order imposes serious civil consequences and therefore, it could never be retrospective for any reason. Further, the impugned Order contradicts with each other as far as Para No.4 and Para No.9.2 are concerned. Further, Para 9.2 of the Impugned Order is in total contradiction of Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Hence, it needs to be set aside on this very score alone. 3.20 Further, in having ordered that all WEGs irrespective of their date of commissioning to come for the new Order which casts serious civil consequences to pay more charges, the 1st Respondent has clearly violated the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing but arbitrary exercise of powers, against the approved cannons of law, against the Principles of natural Justice and against the Principles of promissory estoppels and legitimate expectation and therefore, it is expropriatory under Article 14 of the Constitution of India and hence, the Order needs to be struck down for this score also. 4. Balance of convenience, if any The Appellant has made out a prima facie case in favour of the Appellant and the balance of convenience is also in favour of the Appellant only. Since the members of the Appellant are already paying the notified charges as per the orders in force and also as per the Energy Wheeling Agreement they have entered with the 2nd Respondent there is no loss of revenue to the 2nd or the 3rd Respondent in any manner and as such, the Interim Order prayed for may kindly be granted.

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has been concealed or suppressed and further declares that the enclosures and typed set of material papers relied upon and filed herewith are true copies of the originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT VERIFICATION

APPLICANT

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing the Applicant Tamil Nadu Spinning Mills Association as its Chief Adviser and resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are true to my personal knowledge/ derived from official record and are believed to be true on legal advice and that I have not suppressed any material facts. DATE : 13-09-2012 PLACE : DELHI SIGNATURE OF THE APPLICANT

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 BETWEEN TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. Represented by Dr.K.Venkatachalam Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents/Respondents. AFFIDAVIT FILED BY THE APPLICANT I, K. Venkatachalam, son of A. Karuppaiah, Hindu, aged about 60 years, residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil Nadu do hereby solemnly affirm and sincerely state as follows : -

1.

I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear to this Affidavit on its behalf. I have been dealing with this matters relating to the above mentioned case and I am conversant with the facts of the case. 2. I have read the accompanying Interlocutory Application seeking Interim

injunction pending the Appeal filed against the Order dated 31.07.2012 in T.R.No.6 of 2012 passed by the Tamil Nadu Electricity Regulatory Commission and I say that the facts stated therein in paras 1 to 4 are based on the records of the Applicant maintained in the ordinary course of its business and believed by me to be true.

APPLICANT VERIFICATION I, the Deponent above named do hereby verify that the contents or my above Affidavit are true to my knowledge, no part of it is false and nothing material has been concealed therefrom. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT

FORM III (See Rule 20) INTERLOCUTORY APPLICATION IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. represented by Dr.K.Venkatachalam, its Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, represented by its Chairman and Managing Director, 144, Anna Salai, CHENNAI 600 002. (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director,

Respondents/Respondents.

PETITION FOR INTERIM DIRECTION The Applicant above named states as follows : 1. Set out the relief (s) Pending final decision of the Appeal, the Applicant seeks the issuance of the following Interim Direction : For the reasons stated above, it is prayed that this Honble Appellate Tribunal may be pleased to pass an order of INTERIM INJUNCTION, restraining the 2nd and 3rd Respondents, their men, agents, representatives and sub-ordinates from demanding and collecting banking charges(para 8.2), transmission charges, wheeling charges and line loss charges(para 8.3), grid availability charges(8.7) and Scheduling and system operation charges(para 8.9) in so far as the members of the Petitioner Association are concerned pending disposal of the above Appeal and thus render justice.

2.

Brief facts A. The Applicant/Appellant is an Association of yarn spinning mills which are HT electricity consumers in the State of Tamil Nadu. The Applicant had earlier filed Petitions before various fora on issues relating to the rights of its members in the Electricity Sector. B. The First Respondent is the Tamil Nadu Electricity Regulatory Commission and the second Respondent is Tamilnadu Generation and Distribution Corporation Ltd and the Third Respondent is Tamil Nadu Transmission Corporation Ltd

3.

Basis on which Interim injunction prayed for 3.1 The Impugned Order in Para 9.2 makes it mandatory that all WEGs irrespective of the commissioning dates should be brought under the Impugned Order and accordingly, all costs have to be paid as per the Impugned Order. But whereas, according to Regulation 6 of TNERCPower procurement from New and Renewable Sources of Energy

Regulations, 2008, any Order of the Commission would bind the WEGs commissioned only after the date of the said Order and therefore, the attempt of the Impugned Order to make it applicable for all WEGs having the commissioning date prior to the date of Impugned Order is an arbitrary exercise of power and therefore, it is against law. 3.2 The appellants submits that after coming in to force of the Impugned Order, there are four categories of WEGs now functioning in the State of Tamilnadu and each are governed by a separate practice and Order and accordingly, with separate Power Purchase Agreement or Energy Wheeling Agreement as the case may be depending up on the date of commissioning of the WEG. 3.3 Those WEGs commissioned prior to 15.05.2006 are covered by PPA (Power Purchase Agreement) and not interfered by the Commissions Order dated 15.05.2006 on wind energy in any manner. These WEGs however, have the option to renegotiate and can come to the benefits of the Commissions Tariff Order on Wind Energy dated 15.05.2006 by renegotiating the PPA in to EPA (Energy Purchase Agreement) or EWA (Energy Wheeling Agreement) as the case may be. In order to make applicable the Order dated 15.05.2006 of the Commission, there was a specific provision made available in the Order itself to accommodate the option of renegotiation under Clause 4. Further, they have the option to continue with the existing arrangement under PPA Scheme itself if they are not willing for a renegotiation and as such, if they are not willing, they can continue in the old scheme itself without renegotiation towards the EPA/EWA Scheme. 3.4 Same is the case when the next Tariff Order No.1 of 2009 dated 20.03.2009 came in to force from 19.09.2008 onwards. Accordingly, except for the purpose of Tariff for all other terms and conditions, renegotiation scope was provided for re-entering in to new EWA in Clause 4 of the Order dated 20.03.2009. 3.5 However, in the present impugned Order, the Respondent Commission has issued orders totally contradicting the existing schemes by which an existing WEG can either opt for the new scheme or to continue with the old scheme which was under the sole option of the WEG owner. Even though such a scheme has to be provided under the concept of promissory estoppels and legitimate expectation, the Respondent Commission has greatly erred in this matter and accordingly, no such

option was made available in the Impugned Order. Besides to the same, the Impugned Order is having confusing contents in Para 4 and Para 9.2. totally contradicting with each other. 3.6 Para 4 of the Impugned Order says as follows: Since changes are made in various provisions of the previous Order, the Commission considers it appropriate to give effect to all of the provisions contained in this Tariff Order only prospectively. This Order, therefore, shall come in to effect from 01.08.2012. But whereas Para 9.2 of the Impugned Order says as follows: Other related charges and terms and conditions specified in the Order shall be applicable to all the wind energy generators, irrespective of the date of commissioning The impugned Order therefore, mandates heavy costs on captive consumption of wind energy with effect from 01.08.2012 and however, the EWA already in force is not in support of the said costs to be collectable from the executants of the EWA. Hence, any WEG owner could opt to continue to be in the old agreement and therefore, there is no mandatory necessity to switch over to the new system from 01.08.2012 onwards. This liberty was provided in both the earlier orders and however, only in the Impugned Order, it has been fully wiped out. For no reason, the existing WEG owner could be compelled to go for the new Order which costs him heavily on various areas and therefore, such a compulsion is against the principles of natural justice.

3.7 Each WEG is covered by a separate Energy Wheeling Agreement and as new charges are likely to be levied in place of old charges as per the impugned Order, the existing WEG owners may not opt to come for the new Order and they may like to continue to remain in the existing EWA itself without altering their status. Based on the terms and conditions prevailed during the time of taking investment decisions, the WEG owners has come forward for going to the wind power. It is not therefore fair to drive them to a new set of costs which were not even thought of, when the investment decision was originally taken. Now asking them for a sweep change is not fair and reasonable on the principles of promissory estoppels and legitimate

expectation. All investments prior to 31.07.2012 (ie) before the issuance of the impugned Order have happened only based on either Order No.3 of 2006 dated 15.05.2006 or Order No.1 of 2009 dated 20.03.2009. Now without any rhyme or reason, to ask them also to come for the new Order with high costs is against the principles of the natural Justice, promissory estoppels and legitimate expectation. 3.8 In para No. 4 of the impugned Order, the 1st Respondent Commission has made as follows: This order contains many provisions not only relating to tariff but also relating to other terms and conditions. Since charges are made in various provisions of the previous order, the Commission considers it appropriate to give effect to all the provisions contained in this tariff Order only prospectively. This Order, therefore, shall come into effect from 01.08.2012. But, very much contrary to its own Order in Para No.4, in Para No.9.2 the 1st Respondent Commission has made it as follows. 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. 3.9 Hence, from the contradictory statements of the 1st Respondent Commission, the 2nd Respondent TANGEDCO has given working instructions to make applicable all the new charges and all other new terms and conditions to all WEGs who are totally controlled by a different Energy Wheeling Agreement and accordingly, the 2nd Respondent has started raising bills for new charges even though there is no provision in the Energy Wheeling Agreement to claim such charges. The existing benefits like deemed demand charges were totally withdrawn even without a notice. Hence, due to the erroneous and anomalous nature of the impugned Order of the 1st Respondent, all WEG owners/members of the Appellant are put in too much of financial difficulty and hardship leading to irreparable loss during every month from 01.08.2012 onwards. 3.10 Further, under the TNERC-Power procurement from New and Renewable

Sources of Energy Regulations, 2008, under Regulation 6, it has been made as follows: 6. Agreement and Control period

The tariff as determined by the Commission specific order for the purchase

by a general or

of power from each type of

renewable source by the distribution licensee as referred to in clause 4(3) shall remain in force for such period as specified by the Commission in such tariff orders. The control period may ordinarily be two years. When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. 3.11 However, much contrary to the above Regulation, the Respondent Commission in Para 9.2 of the Impugned Order, makes it mandatory the contents of the Order totally applicable for all the WEGs irrespective of the date of commissioning. The Regulation mandates that When the Commission revisits the tariff and allied issues, the revision shall be applicable only to the generator of new and renewable energy sources commissioned after the date of such revised order. But much contrary to the same in Para 9.2 of the Impugned Order the Respondent Commission states as follows: 9.2. Other related charges and terms and conditions specified in the order shall be applicable to all the wind energy generators, irrespective of the date of commissioning. Hence, the Impugned Order is totally against the very letter and spirit of the Regulation and on this score alone, the Impugned Order needs to be set aside.

3.12

While the 1st Respondent Commission dealing with execution of Energy Wheeling Agreement (EWA) in the impugned Order in Para No.8.17 it has made it as follows:

8.17. Energy Wheeling Agreement (EWA) The format for Energy Wheeling Agreement (EWA) shall be evolved as specified in the Commissions regulation in force. The period of agreement and other terms and conditions shall be as per the terms of open access regulations in force issued by the Commission.

Hence, even assuming that the Order is applicable for all WEGs irrespective of the date of commissioning, in order to enforce the various terms and conditions stipulated in the impugned Order, it requires an Energy Wheeling Agreement and accordingly, after getting it signed by the parties concerned only, this Order would be given effect and whereas the 2nd Respondent has not cared to proceed to get the EWA draft vetted and approved by the Commission after following the due process of stakeholders consultation. This again makes the working instructions invalid as no new Energy Wheeling Agreement was executed and no text of Energy Wheeling Agreement was circulated for providing opportunity for the stakeholders in the matter of finalization of the text of new Energy Wheeling Agreement. 3.13 The Appellant submits that each WEG has a specific commissioning date and according to the date of commissioning, the said WEG is governed by an Order of the Commission and therefore, unless the WEG owner opts for renegotiation of the existing agreement, the new Order and the various terms and conditions stipulated in the new Order cannot become automatically enforceable with the WEGs commissioned before the date of issuance of the Order in any manner. All the previous orders have very specifically made this clause under the heading of Applicability of the Order under Para 4 both in Order No. 3 dated 15.05.2006 and in Order No.1 dated 20.03.2009. Such an arrangement is required and goes in concurrence with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008 quoted supra. For the sake of convenience of reference the said paragraph in Order No.3 dated 15.05.2006 is reproduced below: 4.0 APPLICABILITY OF ORDER This order shall come in to force from the date of its issue. This order shall be applicable to all future and renewal of existing contracts/agreements for the Non-Conventional Energy Sources (NCES) based Generating Plants and Non-Conventional Energy Sources based Co-Generation Plants located within the State of Tamilnadu. It should be noted that the existing contracts and agreements between NCES based generators and the distribution licensee signed prior to the date of issue of this order would continue to remain in force. However, the NCES based generators and the distribution licensees shall have the option to mutually renegotiate the existing agreements or contracts if any, in line with this order even before the expiry of the existing agreements or contracts. Any

renewal of the said contracts/agreements, new contracts/agreements shall be in line with this order. 3.14 Likewise in Para No.4 in Order No.1 of 2009 dated 20.03.2009 the Commissioned has made as follows: 4. Applicability of this Order Order No.3 dated 15.05.2006 of the Commission lays down a control period of three years for that order and therefore, normally the next order should have taken effect from 15.05.2009. The Commission in the Common Order in M.P.Nos.9, 14 and 23 of 2008 dated 19.09.2008 has ruled that the control period of three years specified in order No.3 dated 15.05.2006 is waived from the date of issue of that Order. The control period of three years, thus, stands terminated on 19.09.2008. Therefore, the Commission holds that all the wind energy generators commissioned on or after 19.09.2008 shall become eligible for the benefits of the present order, subject to the condition that the monetary benefits shall accrue from the date of this order. The existing agreements between the wind energy generators and the distribution licensee shall continue to be valid. The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with this order. The agreement between the wind generators and the distribution licensee in relation to all machines commission on or after 19.09.2008 shall be in conformity with this order.

3.15

The above two orders of the Commission perfectly fit with the Principles of natural Justice coupled with the theory of promissory estoppels and legitimate expectation. Further, such a provision is also in line with the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Each WEG has come in to being by a large capital investment. Hence, what set of terms and conditions are applicable at the time of making investment would continue to be in force till the WEG promoter opts to continue with it as the investment decision has happened only with reference to the knowledge, information, rights and responsibilities made available at the time of making investment decisions. The members of the Appellant having altered their status based on certain terms and conditions prevailed at a point of time when they invested on wind energy, cannot now be unilaterally forced to come for new terms and conditions. Then it becomes an arbitrary exercise and the impugned Order could only be construed to have the effect of unilateral

and arbitrary exercise of power. Further it is violative of the principles set out under Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. 3.16 Further, as per the Clause 11 of the existing Energy Wheeling Agreement (EWA) by each of the members of the Appellant executed, it has been made as follows: 11. Terms and Conditions agreement period: (10) (11) The agreement shall be valid for a minimum period of 5 years. The parties to the agreement shall be given the option to exit for

violation of the agreement after serving a notice of three months on the other party. (12) The parties to the agreement are at liberty at any time to renegotiate the existing agreement mutually in accordance with the Commissions order in force. 3.17 From the Clause 11 (3) of the existing EWA, it could be seen that there is a liberty extended to parties that either they can renegotiate the existing agreement for going to the new agreement as per the new orders if any or they can continue to remain as such in the existing agreement itself. The option is therefore, vested with the party concerned and therefore, no party could be compelled or forced to accept any new terms and conditions for which no agreement was signed earlier. This option made available to the WEGs is totally wiped out in the impugned Order. The impugned Order unilaterally forces all the WEG owners irrespective of the date of commissioning to come for the new arrangement whereby heavy costs are involved with large civil consequences. 3.18 Due to the implementation of the working instructions of the 2nd Respondent based on the impugned Order of the 1st Respondent, every member of the Appellant is losing heavy money every month due to certain new charges as leviable due to the fresh terms and conditions of the new Order with effect from 01.08.2012 onwards. All the members of the Appellant are totally unaware of the terms and conditions while they made investments and altered their status to erect and commission the WEGs for the purpose of captive consumption. All their investment plans, RoE, etc., have been based only on the available terms and conditions as enumerated in either Order No.3 dated 15.05.2006 or 1 dated 20.03.2009. Hence, even though the Commission has made it clear in Para No.4 that

the terms and conditions are to be applied prospectively, it has contradicted its own versions and accordingly, in Para No.9.2 it made it to applicable to all WEGs irrespective of the date of commissioning. Therefore, the 1st Respondent Commission has committed a serious error and hence it needs to be corrected and rectified by this Hon'ble Tribunal. 3.19 Therefore, the Appellant humbly prays that the members of the Appellant having made investments and altered their status based up on certain terms and conditions stipulated by such orders which were in force during those points of taking investment decisions, cannot now unilaterally and arbitrarily be directed to come for a new set of terms and conditions by the impugned Order which has a very strong impact on their financial workings and thereby the entire operation becomes totally unviable. The impugned Order imposes serious civil consequences and therefore, it could never be retrospective for any reason. Further, the impugned Order contradicts with each other as far as Para No.4 and Para No.9.2 are concerned. Further, Para 9.2 of the Impugned Order is in total contradiction of Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Hence, it needs to be set aside on this very score alone. 3.20 Further, in having ordered that all WEGs irrespective of their date of commissioning to come for the new Order which casts serious civil consequences to pay more charges, the 1st Respondent has clearly violated the Regulation 6 of TNERC-Power procurement from New and Renewable Sources of Energy Regulations, 2008. Therefore, it is nothing but arbitrary exercise of powers, against the approved cannons of law, against the Principles of natural Justice and against the Principles of promissory estoppels and legitimate expectation and therefore, it is expropriatory under Article 14 of the Constitution of India and hence, the Order needs to be struck down for this score also. 4. Balance of convenience, if any The Appellant has made out a prima facie case in favour of the Appellant and the balance of convenience is also in favour of the Appellant only. Since the members of the Appellant are already paying the notified charges as per the orders in force and also as per the Energy Wheeling Agreement they have entered with the 2nd Respondent there is no loss of revenue to the 2nd or the 3rd Respondent in any manner and as such, the Interim Order prayed for may kindly be granted.

DECLARATION BY APPLICANT

The Applicant above named hereby solemnly declares that nothing material has been concealed or suppressed and further declares that the enclosures and typed set of material papers relied upon and filed herewith are true copies of the originals/fair reproduction of the originals thereof.

VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER 2012.

COUNSEL FOR APPLICANT VERIFICATION

APPLICANT

I, Dr. K. Venkatachalam, S/o. Late Karuppaiah aged about 60 years representing the Applicant Tamil Nadu Spinning Mills Association as its Chief Adviser and resident of Tamil Nadu do hereby verify that the contents of the paras 1 to 4 are true to my personal knowledge/ derived from official record and are believed to be true on legal advice and that I have not suppressed any material facts. DATE : 13-09-2012 PLACE : DELHI SIGNATURE OF THE APPLICANT

IN THE APPELLATE TRIBUNAL FOR ELECTRICITY AT NEW DELHI I.A. No. _____ OF 2012 In APPEAL No. _____ OF 2012 BETWEEN TAMIL NADU SPINNING MILLS ASSOCIATION 2, Karur Road, Near Beschi College, Modern Nagar, Dindigul 624 001, Tamilnadu. Represented by Dr.K.Venkatachalam Chief Advisor, Appellant AND (1). TAMIL NADU ELECTRICITY REGULATORY COMMISSION, TIDCO Office Building, 19-A, Rukmani Lakshmipathy Salai, Marshall Road, CHENNAI 600 008. (2). TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LTD, 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, (3). TAMIL NADU TRANSMISSION CORPORATION LTD 144, Anna Salai, CHENNAI 600 002. represented by its Chairman and Managing Director, Respondents/Respondents. AFFIDAVIT FILED BY THE APPLICANT I, K. Venkatachalam, son of A. Karuppaiah, Hindu, aged about 60 years,

residing at M2/27, Sindhu Illam, 4th Cross, R.M. Colony, Dindigul-624 001, Tamil Nadu do hereby solemnly affirm and sincerely state as follows : -

1.

I am the Chief Adviser of the Applicant Association, viz., Tamil Nadu

Spinning Mills Association and am duly authorized by the said Applicant to swear to this Affidavit on its behalf. I have been dealing with this matters relating to the above mentioned case and I am conversant with the facts of the case. 2. I have read the accompanying Interlocutory Application seeking Interim

direction pending the Appeal filed against the Order dated 31.07.2012 in T.R.No.6 of 2012 passed by the Tamil Nadu Electricity Regulatory Commission and I say that the facts stated therein in paras 1 to 4 are based on the records of the Applicant maintained in the ordinary course of its business and believed by me to be true.

APPLICANT VERIFICATION I, the Deponent above named do hereby verify that the contents or my above Affidavit are true to my knowledge, no part of it is false and nothing material has been concealed therefrom. VERIFIED AT DELHI ON THIS 13th DAY OF SEPTEMBER, 2012.

APPLICANT