Once an expert body has determined specific tariffs for power, it is not open to courts to interfere ordinarily in such matters, where the determination by such expert body does not suffer from any illegality or infirmity. This position was recently set out by the Supreme Court in Transmission Corporation of Andhra Pradesh Ltd. v. M/s Rain Calcining Ltd. & Ors.1
On 24.3.2001, the Andhra Pradesh Electricity Regulatory Commission (Commission) set up under the Andhra Pradesh Electricity Reforms Act, 1988 (Reforms Act) decided to consider the issue relating to determination of wheeling charges and directed Transmission Corporation of Andhra Pradesh Ltd. (APTRANSCO) to file necessary applications and information in this regard. Thereafter, the Commission, by order dated 24.03.2002 (Commission Order), determined that the wheeling charges for the year 2002-2003 effective from 1.4.2002 would be 50 paise per Kwh for energy transmitted through its network, and wheeling charges of 28.4 percent of energy input by the project developer into the licensee's grid i.e., the system loss was also to be factored.
This Commission Order was questioned before the High Court and the High Court by judgment and order dated 18.4.2003 (Impugned Order), allowed the appeal, setting aside the above-mentioned Commission Order. The High Court had also set aside an order passed by the Commission on 08.02.2004, holding that grid support charges would be payable at the rate of 50 percent of prevailing demand charges on the differential of captive power plant capacity and contracted maximum demand. Hence, the APTRANSCO and Commission filed appeals against the Impugned Order before the Supreme Court.
Findings of the High Court
The High Court, in the Impugned Order, had held that the Commission constituted under the Reforms Act, has no power to levy charges for wheeling the energy generated by the power generating companies to their consumers. It had also held that under the Reforms Act, the powers of the Commission are more like judicial function exercisable by a civil court, but not legislative. The High Court had also held that wheeling charges are irrational, illogical, and suffer from serious infirmities.
The High Court had further held that after the expiry of the term of the agreement, the Government alone is competent to fix wheeling charges, since it is in the realm of policy direction. The agreements entered into by the State Electricity Board are statutory agreements, and they are binding. The Commission has no power to revise the wheeling charges under the guise of fixing tariff under Section 26 of the Reforms Act. The wheeling charges are a matter of policy and not for the Commission to fix. The wheeling charges do not fall under Section 26 of the Reforms Act, which deals with licensee's revenues and tariffs. It was of the opinion that it is not proper to revise the wheeling charges like a tariff for the sale of energy. It had also held that the joint application filed by APTRANSCO and distribution companies (DISCOMs) was not maintainable and any alteration or modification can be made only after due opportunity of hearing is given to the affected persons.
Findings of the Supreme Court
The Supreme Court, upon a careful evaluation of the findings of the High Court in the Impugned Order and the facts in the matter, found that the Commission while determining the wheeling charges, considered the assessment of the network charges, transmission loss and various other factors included in the agreement in the post Reforms Act and pre-Reforms Act scenario.
It was therefore of the opinion that as regards the question of fixing of wheeling charges, the High Court has erred in holding that the Commission has no power to fix the wheeling charges. It is the regulator for transmission, and considering the provisions of the Reforms Act, the Supreme Court found it apparent that the Commission had the power to fix the wheeling charges. In terms of the regulations framed in exercise of powers conferred by Section 9(2), and Section 54(2)(a) of the Reforms Act (as amended in 2000 (Regulations)),2 various agreements have also been amended, and there is plenary power under the Regulations to prescribe the tariff and charges concerning transmission and bulk supply or distribution and retail supply as provided in regulation 45-A(2).
Consequently, the Supreme Court held that the High Court could not have interfered with the findings on merits taken by the experts, without entering into the various aspects considered by the Commission. The Supreme Court observed that the High Court has not gone into various reasons, and the details considered by the Commission and once the expert body has determined specific tariffs, it is not for the courts to interfere ordinarily in such matters. The Supreme Court found the determination to be proper and stated that it does not suffer from any infirmity or illegality, as the Commission has made an elaborate discussion for arriving at the figures as mentioned hereinabove. Likewise, the same reasoning would govern grid support charges as well. Thus, the finding of the High Court on merits, as to the determination of charges being illegal and improper in any manner, was held to be unsustainable. The Impugned Order was therefore set aside.
1 Decided on 29.11.2019.
2 Andhra Pradesh Electricity Regulatory Commission (Business Rules of the Commission), Regulations, 1999.
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