Telangana High Court
M/S. Vinayak Steels Ltd., S.C.No. ... vs The Telangana State Electricity on 16 October, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
WRIT PETITIONS No. 32582, 19494 AND 26216 OF 2023
COMMON ORDER:
Petitioners in all these Writ Petitions is a private
limited company incorporated under the provisions of the
Companies Act, 1956. They question the action of Transmission
Corporation of Telangana Limited and Southern Power
Distribution Company Limited of Telangana State in not
granting clearance / no objection for availing open access for
the aggregate load of 42 MW, 16.5 MW and 45 MW respectively,
as the same is contrary to Section 42 of the Electricity Act, 2003
apart from being violative of Articles 14, 19(1)(g) and 21 of the
Constitution of India.
2. The case of petitioner in Writ Petition No. 32582 of
2023 is that they established an induction furnace unit which
engaged in manufacture of Mild Steel Ingots, after obtaining a
High Tension Power Supply Connection bearing No. RJN-773
from the 4th respondent; as on today, petitioner's contracted
Maximum Demand with the 4th respondent is 42,000 KVA (42
MWs.). Thereafter, petitioner acquired additional load and by
25.04.2003, its load capacity came to 42 MW. Soon after
petitioner acquired additional load, it has been applying for
open access permission for the capacity of 42 MW, however, the
Chief Engineer, SLDC - 3rd respondent is not granting
permission to avail open access in respect of power purchased
by petitioner through Indian Energy Exchange for a capacity of
42 MW. Without assigning any reason, the 3rd respondent has
been granting permission for 24.49 MW ignoring the fact that
capacity of petitioner approved by the 4th respondent is 42 MW
as on that day.
3. Petitioner in Writ Petition No. 19494 of 2023 states
that they established an industrial unit in Survey No. 97E of
Kothur Village, Shadnagar Mandal, Ranga Reddy District,
engaged in the manufacture of MS Rods, Sponge Iron and Mild
Steel Ingots, by obtaining two High-Tension Power supply
bearing Service Connection Nos. MBN-371 & MBN-710 from the
1st respondent, a licensee under the Electricity Act, 2003 (for
short, 'the Act'). Petitioner was originally availing power at 33
KV and presently, 132 KV voltage supply.
It is stated under Section 42(2) of the Act, it is
obligatory on the part of the Electricity Regulatory Commissions
of each State to see that open access is made available to all the
consumers of the electricity after five years of coming into force
of the Act. Petitioner has been availing open access power with a
load of 8.5 M.Ws. the open access corridor of the 4th respondent
controlled by the 9th respondent which is a Government of India
Company established to regulate the open access corridor of the
southern states of India. Apart from that, they have been
availing power with a capacity of 8 M.Ws. from the 8th
respondent which is a state-owned company. Accordingly, the
2nd respondent used to give standing clearance certificate for the
capacity of 16.5 M.Ws. and presently, the 8th respondent
stopped generation of power due to operational contingency as a
result of the same, petitioner is unable to avail any power from
the 8th respondent for the capacity of 8 M.Ws.
It is stated that ever since petitioner started availing
power from the 8th respondent, the 2nd respondent has been
issuing aggregate standing clearance certificate for the aggregate
load that is being availed from the inter-state supply made by
the private generating companies through Indian Energy
Exchange and the power supplied by the 8th respondent by
allowing petitioner to use open access corridor of the 4th
respondent for the capacity of 16.5 K.Ws. Recently, petitioner
applied for grant of clearance certificate for availment of 16.5
M.Ws. aggregate load, through Indian Energy Exchange;
curiously, the 2nd respondent declined to give the certificate,
stating that they will not give the same to the extent of power
that was being availed by petitioner from the 8th respondent
source. The 2nd respondent stated that they would not consider
petitioner's request due to congestion in grid as of now and his
case would be considered in future depending upon availability
of grid.
4. Petitioner in Writ Petition No. 26216 of 2023 is the
consumer of the 2nd respondent - DISCOM under HT Category
with a CMD of 45,000 KVA at present with service No.MDK-
1060. Initially, they have two service connections viz., MDK-
1060 with a CMD of 9990 KVA and MDK-1395 with a CMD of
9990 KVA. and the later service was merged with former and
obtained additional CMD of 4020 making a total CMD of 24000
KVA. The supply was being made through 132 KV dedicated
feeder from China Sankarampet Sub-station. While so, it is
stated, petitioner applied for availing power through open access
source by purchasing power from IEX for 24 MV, for which,
respondents issued no objection for the month of November-
2021 and from December-2021 on, they were allowing 17 MW
only. It is stated, thereafter, petitioner got its CMD enhanced to
45 MW by addition of 21 MW with effect from 29.12.2021 and
applied for 45 MW open access power, but respondents were
allowing only 17 MW open access. Therefore, petitioner applied
to the Chief Engineer SLDC on 15.06.2023 to grant 'No
Objection' as also to the Chief General Manager, IPC, TSSPDCL
on 17.06.2023. The Chief Engineer, SLDC gave reply dated
19.06.2023 stating that the subject has to be dealt with by
TSSPDCL with regard to CMD and technical feasibility.
TSSPDCL, however, has not chosen to give any reply.
Petitioner contends that consumer has a statutory
right to avail open access power and respondents have a
statutory obligation to permit the same. Due to liberalization of
Government Control Regime in 1992, electricity that was being
generated and transmitted by state-owned utilities was not at all
sufficient to meet the need of the hour and therefore, the
Central Government has introduced a rational development of
power through various sources which include both
conventional, non-conventional and renewable sources and
encouraged private sector to enter into power generation, but
there are difficulties for private generators to sell the power
generated by them as they can't erect and maintain the
distribution network. Taking into consideration all these
situations, Government in the 2003 Act made it obligatory on
the Central and State transmission utilities to transmit power
generated by private sector to the consumers. In that direction,
provisions are incorporated under Sections 38, 39, 40 and 42 of
the Act. Section 38 (2) (d) stipulates that central transmission
utility shall provide non-discriminatory open access to its
transmission system on payment of charges. To the same effect
Section 39 (2) (d) is applicable to State transmission utility.
Sections 40 and 42 of the Act further obligate the transmission
licensees to build, maintain and operate an efficient coordinated
inter-state or intra-state transmission systems. Therefore, it is
the statutory obligation of the transmission utilities to provide
open access and they can't avoid the said obligation by resorting
to some excuses that there is no transmission line or congestion
in the grid. Foreseeing such a situation, the Central Regulatory
Commission in its open access Regulations under Clause 6
stipulated to invite open bids and provide access in 45 days. It
is stated that consumer is not at the mercy of the either
TRANSCO or DISCOM. It is its statutory right to have access to
the distribution system.
It is stated that action of the respondents violates
the provisions of Section 42 of the Act and Regulation 2 of 2005
of the APERC which was adopted by TSERC vide Regulation 1 of
2014 and CERC (Open Access in interstate Transmission)
Regulation-2008 as amended in 2009. Section 42 (1) mandates
the Distribution Licensee to develop and maintain an efficient
co-ordinate and economical distribution system in its area of
supply. Sub-Section-2 mandates that State Commission shall
introduce open access in such phases within one year of the
appointed date by it. In compliance with the said direction in
sub-section-2, APERC issued Regulation 2 of 2005 notified on
01.07.2005 called 'Terms and Conditions of Open Access to
intra State Transmission and Distribution networks', which was
amended from time to time. CERC issued the Regulation stated
supra. Under Regulation 2 of 2005, open access users are
categorized as long-term open access users where requirement
of open access is two years and more; for long term open access,
State Transmission Utility (STU) constituted by the State
Government under Section 39 (1) of the Act is the Nodal Agency
and for short term open access transactions, the Nodal Agency
is the State Load Dispatch Centre (SLDC). It is stated that State
Load Dispatch Centre (SLDC) receive and process the
applications and grant NOC also after consulting Transmission
or Distribution Licensee whose networks would be used for such
transactions. Respondents are obligated by the above-stated
provisions to do all acts enabling petitioner to avail open access
power. The inaction on the part of the respondents is intentional
to deny the open access power to them.
5. In the counter filed in Writ Petition No. 26216 of
2023, the 4th respondent states that petitioner after merging the
two units and making total CMD of 45MW, submitted
Applications to avail NOC for whole 45MW. As per clause 5 of
Regulation 2 of 2005, Nodal agency for processing short term
open access transactions is TSSLDC. The relevant clause is
extracted below:-
" For all long-term open access transactions, the Nodal
Agency for receiving and processing applications shall be the State
Transmission Utility (STU).
For short-term open access transactions, the Nodal Agency
for receiving and processing applications shall be the State Load
Dispatch Centre (SLDC)"
Procedure for checking feasibility for allowance of
open access to any applicant is laid down in Clause 3 (Scope) of
Central Electricity Regulatory Commission (Open Access in
inter-State Transmission) Regulations, 2008 and the same is
extracted below:
" 3. Subject to any other regulations specified by the
Commission, the long- term customer shall have first priority for using
the inter-State transmission system for the designated use. These
regulations shall apply for utilization of surplus capacity available
thereafter on the inter-State transmission system by virtue of-
(a) Inherent design margins;
(b) Margins available due to variation in power flows; and© Margins available due to
in-built spare transmission capacity created to cater to future load growth or
generation addition:"
In addition to the above, Section 6 which is related
to verification of feasibility check for processing OA application
in Central Electricity Regulatory Commission (Open Access in
inter-State Transmission) (Amendment) Regulations, 2009 is
reproduced below for kind perusal:
" b) While processing the application for concurrence or 'no
objection' or prior standing clearance, as the case may be, the State
Load Despatch Centre shall verify the following, namely- Existence of
infrastructure necessary for time-block-wise energy metering and
accounting in accordance with the provisions of theGrid Code in force,
andAvailability of surplus transmission capacity in the State network."
It is stated that any Open Access Consumer willing
to avail open access power under Inter/Intra State STOA,
feasibility has to be verified at various levels, viz., Verification of
line/Feeder capacity, Verification of transmission and
distribution Capacity, Verification of Sub Station feasibility,
Verification of metering provisions as per CEA norms at the
consumer end to avail open access power, Verification of
Compatibility Check of the installed ABT meters with the EBC
Software. The process also involves verification of design
margins and margins available for spare transmission or
distribution network where information of the whole
transmission or distribution network is to be gathered at
various levels. According to respondents, distribution corridor
is getting overloaded due to the scheme of Government of
Telangana to provide 24 hours power supply to all the services
including agricultural services from January, 2018 onwards,
therefore, TS DISCOMs had to make necessary arrangements
for adequate power procurement from various sources and as a
result of which, the network became completely loaded. However
this respondent has been continuously issuing NOC for OA
capacity of 17MW to petitioner through IEX every month duly
considering the sum of earlier OA demands of the two units of
petitioner. In the light of the above provision, Regulations and
Rules set forth by TSERC, TSSPDCL is processing many open
access transactions every month with a view to provide non-
discriminatory open access to the consumers through the same
Inter State and Intra State transmission/distribution network.
All the above Open access transactions are being accorded
approval for wheeling or utilizing the transmission/distribution
network and this respondent No.4/TSSPDCL is according
approval for OA capacity of 1200-1300 MW in Open access as
per the applications received every month. The transaction
corresponding to OA quantum of 17MW pertaining to petitioner
which is being applied every month is also included in the said
volume of OA transactions. The request of petitioner seeking 45
MW OA power is almost 2.5 times the present OA demand
(17MW).
It is stated that petitioner avails power through
open access when the price is cheaper and lower, when the
price goes high, they avail supply from this respondent
company. This type of transactions at the behest of petitioner
has been causing huge impact on the schedules of this
respondent and grid stability and would be detrimental to the
grid stability as petitioner is trying to avail 2.5 times the earlier
OA demand which will have pecuniary effect on respondent
which is working at large on "No Loss No Profit Basis". The
additional burden on respondents due to the said act of
petitioner will finally be passed on to the end
consumer/common people by way of increase in Tariff. The
distribution network is highly loaded due to various open access
transactions. The availing of supply through open access with
short intervals and higher OA capacity throughout a day would
further load the network resulting congestion of the existing
network.
In addition, this respondent company with an
intention to provide 24 hours supply to all its consumers has
been purchasing power from Power Exchanges in which rate is
very uncertain and depends upon the external factors such as
availability of power and demand across the Nation. It is unfair
on the part of petitioner to state that respondent is purchasing
power at cheaper rates. In fact, petitioner avails supply from
this Respondent when power prices at exchange are at higher
rate than the Distribution companies' tariffs. They are under
obligation to supply uninterrupted power to all consumers, who
will purchase power from Power Exchanges to meet even these
types of transactions from petitioner and likewise other open
access consumers.
This Court passed interim order dated 21.09.2023
directing to consider the representation of petitioner dated
17.04.2023. In compliance with the said order, this respondent
vide letter dated 07.10.2023 considered the representation of
petitioner and passed orders rejecting the request of petitioner
for issuance of NOC for enhancement from 17 to 45 MW due to
congestion in the grid and their Application for additional
quantum would be considered in future depending on
availability of grid.
6. The Chief General Manager (IPC), TSSPDCL also
filed the counter affidavit in Writ Petition No. 19494 of 2023,
almost reiterating the averments made in the counter referred to
supra.
7. Heard Sri...... learned Senior Counsel on behalf of
Smt. K. Jayasree, learned counsel for petitioners and Sri R.
Vinod Reddy, learned Standing Counsel for respondents and
perused the record. Sri Irigi Ganesh, learned counsel appearing
for petitioner in Writ Petition No. 26216 of 2023 submits that
the Hon'ble Supreme Court in Brihanmumbai Electric Supply
and Transport Undertaking v. Maharashtra Electricity
Regulatory Commission (MERC) 1 at para 26 held that it shall
be the duty of distribution licensee to develop and maintain an
efficient distribution system and further stated that Section 42
(3) of the Electricity Act casts a duty upon the distribution
licensee to provide Open Access to the consumers. Therefore,
the respondents cannot take shelter under the lame excuse that
grid space would not permit Open Access.
8. The simple case of petitioners is that Respondent -
Transmission Corporation of Telangana Limited is not granting
clearance / no objection for availing open access for the
aggregate load of 42 MW, 16.5 MW and 45 MW respectively.
According to petitioners, Sections 40 and 42 of the Act obligates
the transmission licensees to build, maintain and operate an
efficient coordinated inter-state or intra-state transmission
systems. Therefore, it is the statutory obligation of the
transmission utilities to provide open access and they can't
2015 (2) SCC 438
avoid the said obligation by resorting to some excuses that there
is no transmission line or congestion in the grid. Foreseeing
such a situation, the Central Regulatory Commission in its open
access Regulations under Clause 6 stipulates to invite open bids
and provide access in 45 days. It is the complaint of petitioner
that consumer is not at the mercy of the either TRANSCO or
DISCOM and it is their statutory right to have access to the
distribution system. Though learned counsel for petitioner
relying on the judgment in Brihanmumbai Electric Supply
and Transport Undertaking's case, submits that it shall be
the duty of distribution licensee to develop and maintain an
efficient distribution system and further as per Section 42 (3), a
duty is cast upon the distribution licensee to provide Open
Access to consumers, in the counter, it is the categorical stand
of the respondent that petitioner avails power through open
access when the price is cheaper and lower, when the price goes
high, they avail supply from this Respondent company. This
type of transactions at the behest of petitioner has been causing
huge impact on the schedules of this Respondent and grid
stability and would be detrimental to the Grid stability and
which will have pecuniary effect on respondents which is
working at large on "No Loss No Profit Basis". The additional
burden on the respondent due to the said act of petitioners will
finally be passed on to the end consumer/common people by
way of increase in Tariff. The distribution network is highly
loaded due to various open access transactions. The availing of
supply through open access with short intervals & higher OA
capacity throughout a day would further load the network
resulting congestion of the existing network. As is evident from
the counter, the respondent company with an intention to
provide 24 hours supply to all its consumers has been
purchasing power from Power Exchanges in which rate is very
uncertain and depends upon the external factors such as
availability of power and demand across the Nation. The
respondent company is under obligation to supply
uninterrupted power to all consumers and will purchase power
from Power Exchanges to meet even these types of transactions
from petitioner and likewise other open access consumers.
Further, this Court on 21.09.2023, in Writ Petition No. 26216 of
2023, as an interim measure, directed the 4th respondent
therein to consider representation of petitioner dated
17.04.2023, pursuant to which, the 4th respondent vide letter
dated 07.10.2023 considered and rejected the request of
petitioner for issuance of NOC for enhancement from 17 to 45
MW due to congestion in the grid and their Application for
additional quantum would be considered in future depending on
availability of grid.
9. In view of the foregoing circumstances and keeping
in view the obligations to be discharged as narrated by the
respondent Company in the counter-affidavit, this Court is of
the opinion that petitioners are not entitled for any positive
relief. The Writ Petitions are therefore, liable to be dismissed.
10. All the three Writ Petitions are accordingly,
dismissed. No costs.
11. Consequently, miscellaneous Applications, if any
shall stand closed.
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NAGESH BHEEMAPAKA, J
15th October 2024
ksld
