CERC Order dated September 02, 2022 in Petition No. 261/TT/2015


  • HSA Advocates successfully represented MB Power (Madhya Pradesh) Limited (MBPMPL), in proceedings before the Central Electricity Regulatory Commission (CERC), on the issue of levy of transmission charges on MBPMPL for the period of mismatch between the commissioning of transmission systems being developed by Power Grid Corporation of India Limited's (PGCIL) and Jabalpur Transmission Company Limited (JTCL).

Issue at hand

  • On whom the liability of transmission charges can be placed, in instances when PGCIL's transmission system has been delayed on account of delay in commissioning of associated transmission system (ATS) of JTCL?

Decision of the Commission

  • Initially, the said liability had been placed upon the users/customers of the transmission system including MBPMPL. On non-payment of such amounts, PGCIL threatened to regulate power from MBPMPL, which was challenged before CERC by MBPMPL. While JTCL maintained that its non-performance was affected by force majeure events and, therefore, it cannot be treated as 'defaulting entity', it failed to demonstrate whether contractually its default can be condoned in light of judicial precedents governing similar cases both on facts and in law.
  • On behalf of MBPMPL, HSA put forth a case that no liability could be placed on it i.e., the Generator, whose obligations to bear transmission charges only commences once the system is put in use for regular service and its LTA is operationalized. It was also argued that:
  • Customers/beneficiaries of transmission system are NOT liable to pay transmission charges prior to the transmission system being put to use.
  • The liability to pay transmission charges will fall on the entity on whose account the transmission system could not be put to use, i.e., the defaulting entity principle.
  • For the mis-match period, the transmission charges payable are in the nature of damages and CANNOT be qualified as sharing of transmission charges under the Sharing/PoC Regulations.
  • Unless the breach is demonstrated, there CANNOT be any imposition of liability for payment of transmission charges/damages for the mis-match period.
  • CERC vide the Order dated September 2, 2022 held that the only relief(s) available to JTCL on account of force majeure would be in terms of the Transmission Service Agreement (TSA) viz. extension of SCOD. However, such relief(s) would not absolve JTCL from payment of IDC/IEDC of the transmission assets of PGCIL which could not be put to use on account of JTCL's ATS being delayed.
  • CERC relied on the decision rendered by the Appellate Tribunal for Electricity in the NRSS Judgments, and its own decisions issued subsequent to the NRSS Judgments, to arrive at such finding. Ultimately, CERC placed the liability of payment of transmission charges for the period of mismatch on JTCL.

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