ITC Limited vs Telangana Electricity Regulatory Commission & Anr.

“7.

This Court has given anxious consideration to the submissions made by petitioner and respondents. Respondent Commission by its order dated 27.03.2024 in O.P. No. 22 of 2023 held petitioner as non-compliant of RPPO obligations. As against the said order, petitioner filed R.P. No. 1 of 2024 in O.P. No. 22 of 2023. The Review Petition was also rejected by Order dated 25.09.2024 and the original order and the Review Order are against petitioner. As there is an alternative remedy of Appeal provided to petitioner under Section 111 of the 2003 Act, this Court sees no reason to interfere with the impugned order and to entertain the writ petition, bypassing the remedy of Appeal available to them. No grounds are made out by petitioner for interference under Article 226 of the Constitution. In the light of the above, the judgment relied on by the learned Senior Counsel in Maji Mohan Kanwar v. The State of Rajasthan (AIR 1967 Rajasthan 264) is of no use to the case on hand. The Writ Petition is therefore, liable to be dismissed.

8.

Accordingly, the Writ Petition is dismissed. No costs.

9.

Consequently, the miscellaneous Applications, if any shall stand closed.”

“28.

ITC Ltd: The total captive co-generation and consumption is partly from coal (fossil fuel) and partly from black liquor (renewable energy as per MNRE).

29.

The Commission in its order in OP No.31 of 2020 dated 09.03.2021 has made it clear vide para 36 that “the Commission is of the view that any consumer consuming electricity from captive co-generation plant or captive co-generation plant using WHR unit beyond its RPPO target for any specific year as per the Regulation No.2 of 2018, shall not be required to purchase additional renewable energy/RECs for that year”.

30.

The TSSLDC was directed to re-compute the RPPO compliance for FY 2018-19 for all Obligated Entities which consume electricity through captive cogeneration plant or captive co generation plant using WHR from conventional sources and submit the relevant details of such computation along with the report on the status of compliance of RPPO for FY 2019-20.

31.

The stakeholder further submitted that during FY 2018-19, the captive cogeneration and consumption from coal was 291799 MWh and the captive cogeneration and consumption from black liquor (renewable energy) was 239104 MWh, thus there can be no RPPO obligation arising out of captive consumption from co-generation from black liquor, being a renewable energy source.

32.

The stakeholder submitted that the captive consumption from captive cogeneration from coal of 291799 MWh is more than the RPPO obligation of 17508 MWh (i.e. 6% on 291799). Therefore, there is no requirement for any purchase of additional renewable energy or RECs for 2018-19 in terms of the aforesaid Order of the Commission.

33.

The stakeholder submitted that in the present proceedings, TSSLDC has not re-computed the RPPO obligation as directed in the aforesaid Order. The SLDC has shown that for FY 2018-19, the self-consumption from co-generation (including both from coal as well as from black liquor) as 530902 MWh. It is wrongly mentioned that this is from fossil fuel. Even if the entire self-consumption from co-generation of 530902 MWh is considered, the consumption is more than the 6% RPPO obligation and there is therefore no requirement for additional purchase of renewable energy and/or RECs. Further the stakeholder requested to determine that there is no requirement or obligation to purchase any additional renewable energy or RECs for any of the years from FY 2018-19 to 2021-22.”

“Commission’s findings

71.

As per the clause 8.1 of the Regulation, all the Obligated entities who have partially fulfilled and/or those who have not fulfilled the RPPO obligation shall deposit into a separate fund, to be created and maintained by the State Agency, such amount on the basis of the short fall in units (by rounding off to nearest number) of the RPPO at forbearance price (Rs.1000/- per Mwh) as decided by the Central Commission within a period of three (3) months from the date of this order.

72.

The Obligated entities are liable to deposit a penalty of Rs.5,000/- per day until the date of deposit, if they fail to deposit the amount as mentioned above, within a period of three (3) months from the date of this order.

73.

The State Agency as per the Regulation shall utilise the amount deposited in the fund so created for activities related to Forecasting and Scheduling of Renewable Energy generation. The State Agency is directed to submit a half yearly report on the amount deposited in the fund and the details of utilisation like amount deposited, purpose of usage and balance amount in the fund.

74.

As per the clause 8.2 of the Regulation, read with section 142 of the Electricity Act, 2003, the Commission is empowered to impose a penalty for contravention of its orders and regulations. The Commission may also impose a maximum penalty of Rs.1,00,000/- on the entity failing to comply with its orders. It can also impose an additional maximum penalty of Rs.6,000/- per day until the failure to comply with the RPPO continues after the breach of the first such direction.

75.

The Commission after careful examination decides to impose a penalty of 10% of forbearance price (Rs.1000/- per Mwh) decided by the Central Commission for the relevant year or Rs.1,00,000/- whichever is lower on the obligated entity for non compliance. Such penalty shall be deposited within 60 days to the fund maintained by the State Agency.”

"B. The written objections of the Petitioner dated 20.09.2023 and the oral submissions of the Petitioner before the Hon'ble Commission on 25.09.2023 are purportedly summarized in paragraphs 28 to 33 of the impugned order, There is no discussion, consideration or decision in the impugned order with respect to the case of the Petitioner.

xxx

D. Even though there is no discussion, consideration or decision with respect to the Petitioner's case, the Petitioner is shown as "not complied" with respect to solar RPPO obligations for FYs 2018-19, 2019-20, 2020-21 and 2021-22 in Annexure V to the impugned order read with paragraphs 67, 69 and 70 of the impugned order. In the complete absence of a speaking order with respect to the Petitioner's case, the Hon'ble Commission could not have held that the Petitioner has not complied with the solar RPPO obligations and/or that the Petitioner has any such obligations in the facts and circumstances of the Petitioner's case. This is clearly a grave error apparent from the record and a grave miscarriage of justice.

E. In terms of paragraph 71 of the impugned order, all the obligated entities who have not fulfilled the RPPO obligation, purportedly with reference to Annexure V of the impugned order, are required to deposit the amount at the rate of the forbearance price within a period of three months from the date of the impugned order. As there has been no discussion, consideration and decision of the Petitioner's case in the impugned order, the direction to the Petitioner to deposit the amount is an error apparent from the record and a grave miscarriage of justice.

F. Paragraphs 72 and 75 of the impugned order purport to levy and/or impose penalties. As there has been no speaking order with discussion, consideration and decision with regard to the Petitioner's specific case, there cannot be any penalties levied or imposed on the Petitioner. The impugned order therefore suffers from grave error apparent from the record and grave miscarriage of justice."

'13. The above provisions clearly state that entities failing to comply with the Regulation due to default must contribute to a separate fund managed by the State Agency, at forbearance prices decided by the Central Commission (CERC) for any shortfall in RPPO units. Further, such entities are subject to penalties under Section 142 of the Electricity Act, 2003, which are in addition to any other penalties under the Electricity Act, 2003 Thus, the penalties in question are imposed within the provisions of the Electricity Act, 2003 and Regulation No.2 of 2018, by serving individual notices to the Obligated Entities, giving adequate opportunity for the affected parties to present their case and contest the penalties ensuring compliance with principles of natural justice. Further, the penalties are applied consistently across similar cases, ensuring fairness and avoiding any arbitrary application. Therefore, there is no error in the Commission's order requiring the deposit of funds and imposing penalties, as outlined in paragraphs 71 to 75 of the impugned order. Based on these facts and the Commission's observations, no review of the order is warranted.

14.

The review petitioner cannot claim that it is being unfairly penalized without being given a specific and individual opportunity to challenge the figures determined by TGSLDC. The Commission has reviewed all the available evidence while making its original decision, and thus, the review petitioner has not provided sufficient grounds to reconsider or review the order. This is particularly relevant given that the review petitioner's captive power plant does not meet the criteria for a co-generation plant, as there is no declaration from the competent authority recognizing the review petitioner's captive power plant as a renewable energy source.

15.

In the circumstances the Commission does not find any merits for reviewing the order passed by it on 27.03.2024. Accordingly, the review petition stands rejected, but in the circumstances of the case without any costs."