Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel. No /65/69 Fax Website: / Case No. 63 of 2013 In the matter of Petition filed by Maharashtra Biomass Energy Developers Association (MBEDA) for review of the Order dated 22 March, 2013 in Case No. 6 of Shri. V.P. Raja, Chairman Shri. Vijay L. Sonavane, Member Maharashtra Biomass Energy Developers Association (MBEDA) 7 th floor, Minerva Complex, 94, S. D. Road, Secunderabad Petitioner Advocate/Representative for the Petitioner : Shri. Abhishek Khare (Adv). Shri. Sajay Joshi (Rep). Shri. Jagdish F. (Rep). Advocate/ Representative for the MSEDCL : Shri. M. S. Kele (Rep). ORDER Date: 15 July, 2013 Maharashtra Biomass Energy Developers Association (herein after the Petitioner ) filed a petition on affidavit before the Commission on 6 May, 2013, under Regulation 85 (a) of the MERC (Conduct of Business) Regulations, 2004 and Regulations 76 and 77 of MERC (Terms MERC_[Case No. 63 of 2013] Page 1 of 5

2 and Conditions for Determination of Renewable Energy Tariff) Regulations, 2010, for review of the Commission s Order (suo-motu) dated 22 March, 2013 in Case No. 6 of 2013, inter-alia, computation of fixed cost for biomass power generating plants, fuel cost issues and other important issues therein. 2. The prayers of the Petitioner are as under: a. The instant Review Petition be accepted and taken on record and the Review Petitioner be given detailed hearing; b. The Cost of Fuel i.e. Biomass may be considered at Rs.3,500 per MT; c. Rework the tariff to Rs per Kwh for projects in the period d. Any other just and proper relief as this Hon ble Commission may deem fit and proper in the facts and circumstances of this case. 3. The Petitioner in its petition and additional submission filed with the Commission on 6 June, 2013 submitted as follows: 3.1 The Petitioner is a registered association of biomass based power generation plants in Maharashtra with the objective of addressing the problem and issues being faced by its members and for educating, promoting biomass based power production and other allied objectives as set out in the charter documents of the Petitioner s Association. 3.2 The Commission vide Order dated 22 March, 2013 in Case No. 6 of 2013 determined the tariff for existing biomass based power plants (commissioned prior to F.Y ) at Rs. 5.71/kWh comprising fixed cost component of Rs. 1.70/kWh and variable cost component of Rs. 4.01/kWh. Whereas for New biomass projects to be commissioned in F.Y , the tariff is fixed at Rs. 5.87/kWh. There are certain errors which are apparent on the face of the Order which need consideration of the Commission and would require to be rectified. 3.3 In the Commission s Order, for old (existing) projects, fixed cost is taken as Rs. 1.70/Kwh. However, this fixed cost component is subject to reduction of 3 paisa per year, i.e. from the year of commissioning ( ). Therefore, the effective tariff for old projects works out to Rs. 5.50/kWh (Rs. 1.49/kWh as fixed cost + Rs /kwh as variable cost). 3.4 The Central Electricity Regulatory Commission (CERC) in its RE Tariff Order for F.Y has stipulated biomass fuel price of Rs /MT for Maharashtra and calorific value of 3300 kcal/kg, which translates to fuel price in equivalent heat value approach as Rs.875/Million kcal. Accordingly, the biomass fuel price for F.Y has been considered as Rs. 3199/MT for determination of variable charge component of MERC_[Case No. 63 of 2013] Page 2 of 5

3 tariff for biomass power projects for F.Y However, due to shortage of biomass fuel in Maharashtra, in reality, the fuel is available not below Rs. 3500/- per Ton. There has been substantial increase in daily wages, inflation, cost of living, cost of operation and maintenance etc., which needs consideration. 3.5 Increase in MAT rates has effect on reduction in applicable/realizable tariff. MAT is important component for determining fixed charges. Therefore, the Commission must factor this aspect to ensure that power generating units being incentivized with MAT and all other duties, levies and imposition should be given as pass through. Furthermore, the interest rate for the projects is not considered at the current interest rates at which banks and FIs lend money to biomass projects. 3.6 The Petitioner is suffering from heavy losses and is dependent on receiving the concession provided by the Commission in all the previous years starting from till the year The same fixed cost of Rs. 1.70/kWh should be considered for the year F.Y Even though MEDA s submission based on compliance monitoring report stated that, the variety of biomass fuels are being used on overall annual basis, it is found that there is large amount of variation in the calorific values of various biomass fuels and this affects the overall SHR. Therefore, MEDA, CEA and National Productivity Council feel that SHR for biomass power projects should be around 4500 kcal/kwh instead of 3800 kcal/kwh. The same was not considered by the Commission. 3.8 It is pertinent to draw the attention of the Commission to the consequences of severe drought conditions prevailing in the vicinity of biomass power plant, thus affecting the availability of water to such plants. Such shortage has resulted into lower PLF and also affected the availability of biomass at affordable prices. It has escaped from the Commission s consideration that out of 16 commissioned plant in the Maharashtra with collective installed capacity of 134 MW, only 6 plants are working and facing enormous difficulties. Even if plants are shut down, the plants management has to maintain its O&M staff, security and many other departments. 3.9 The additional evidence on record is discovered in the form of Orders passed by CERC bearing Petition No. 155/MP/2012 dated 2 April, 2013 and Petition No. 159/MP/2012 dated 15 April, 2013, which were passed subsequent to the passing of this Commission s Order dated 22 March, 2013, wherein CERC has stressed upon safeguarding the interest of the investors and also consumers based on the principles given in the National Electricity Policy and National Tariff Policy The Petitioner seeks review under certain provisions of the MERC RE Tariff Regulations, 2010 under the powers vested with Regulations 76 & 77 of the Regulations and requested to waive the limitation of time period for review of provisions of the above MERC_[Case No. 63 of 2013] Page 3 of 5

4 Regulations due to extraordinary and extreme nature of circumstances facing the biomass industry in the state. 4. The Commission vide notice dated 13 May, 2013 scheduled a hearing in the matter on 31 May, 2013 with copy to four authorised Consumer Representatives. However, the Advocate of the Petitioner vide letter dated 25 May, 2013 requested the Commission for adjournment of hearing in this matter on any suitable date, due to prescheduled court case at New Delhi. Accordingly, the Commission vide notice dated 29 May, 2013 rescheduled the hearing on 13 June, 2013 with copy to four authorized Consumer Representatives. 5. Accordingly, the hearing was held on 13 June, 2013 in the office of the Commission. Shri. Abhishek Khare (Advocate), Shri. Sajay Joshi and Shri. Jagdish F. were appeared on behalf of the Petitioner. Shri. M. S. Kele appeared on behalf of the MSEDCL during the hearing. 6. During the hearing, the Petitioner explained its detailed submission as mentioned above before the Commission. The MSEDCL verbally submitted that the tariff determined by the Commission for F.Y is a fair tariff and it is not necessary to review the same. 7. DECISION WITH REASONS: The present petition needs to be tested against the requirement of maintainability. The grounds on which a review could be considered are specified in Regulation 85 (a) of the MERC (Conduct of Business) Regulations, 2004, which is reproduced below: 85. (a) Any person aggrieved by a direction, decision or order of the Commission, from which (i) no appeal has been preferred or (ii) from which no appeal is allowed, may, upon the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the direction, decision or order was passed or on account of some mistake or error apparent from the face of the record, or for any other sufficient reasons, may apply for a review of such order, within forty-five (45) days of the date of the direction, decision or order, as the case may be, to the Commission. The grounds raised by the Petitioner to justify the review of the impugned Order dated 22 March, 2013 on the basis of the price of bio-mass fuel, increase in various other costs such as daily wages, inflation, cost of living, cost of operation and maintenance, etc., may MERC_[Case No. 63 of 2013] Page 4 of 5

5 be the situation faced by the biomass developers, but these grounds cannot be accepted as an error in the impugned Order dated 22 March The Petitioner has not stated that the Commission has erroneously taken into account certain figures while passing the said impugned Order. No error therefore has been shown which could be considered for grant of review. Similarly, the question of applicability of MAT is not a ground for review. It may be an arguable point in appeal. The further contention that the interest rate for the projects has not been considered at the current interest rates is again not a ground for review, because the Petitioner has not shown that the interest rate considered in the impugned Order of the Commission is erroneous. The provisions related SHR had already been considered by the Commission while issuing the impugned Order. Hence, this is also not a ground for review. Consequences of drought conditions and lower PLF are not grounds of review. Hardships faced by a party on practical considerations are not a ground for review. It is settled law in the catena of judgments of the Supreme Court that the scope of review is limited, and limited only to the specific grounds stated in Order 47 Rule 1 of the Code of Civil Procedure The said provision of the CPC has been mirrored in Regulation 85(a) of the Code of Conduct of Business Regulations, 2004 of the Commission. Moreover, the reference of CERC s Orders given by the Petitioner, as mentioned above, is not a ground to seek a review, because it is settled law that an Order is not subject to review on account of any subsequent Orders of any other Court including any higher Court. In view of the above, the review petition in the Case No. 63 of 2013 stands dismissed as not maintainable. Sd/- (Vijay L. Sonavane) Member Sd/- (V. P. Raja) Chairman MERC_[Case No. 63 of 2013] Page 5 of 5