Introduction

In the recent decision rendered on January 23, 2023, by the Central Electricity Regulatory Commission (CERC), Power Grid Corporation of India Limited ("the Petitioner") sought determination of transmission tariff under the CERC (Terms and Conditions of Tariff) Regulations, 2019. The case primarily revolves around the tariff determination for the "Transmission System for evacuation of power from 2X500 MW Neyveli Lignite Corporation Limited TS-1 (Replacement) (NNTPS)" project. Key issues addressed in the judgment include time overruns attributed to Right of Way (RoW) challenges, the allocation of capital costs, and the applicability of different Sharing Regulations governing transmission charges.

Summary of the Judgment

The CERC deliberated on various petitions filed by the Petitioner seeking approval of capital costs, additional capitalization, and transmission tariff for the specified assets. The Petitioner also requested recovery mechanisms for shortfalls, exemptions related to taxes, and allowances for reimbursable expenses. A significant portion of the case addressed the time overrun in commissioning Asset-1 due to RoW issues and the COVID-19 pandemic. While the Commission condoned the majority of the time delay caused by uncontrollable RoW complications, it did not condone a residual delay period not attributable to such factors. Additionally, the Commission addressed disputes regarding the applicability of previous orders related to Sharing Regulations, ultimately rejecting arguments to split capital costs based on 2010 and 2020 Sharing Regulations within this context.

Analysis

Precedents Cited

The Judgment references several prior orders, notably Petition No. 102/TT/2016 and Petition No. 367/TT/2014. In these instances, the Commission had previously directed the separation of tariff components based on varying Sharing Regulations due to inadvertent amalgamation of assets. However, in the current case, the Commission determined that these precedents were inapplicable due to differing facts and circumstances, specifically the distinct regulatory frameworks introduced by the 2020 Sharing Regulations.

Legal Reasoning

The Commission meticulously evaluated the Petitioner’s claims, particularly concerning the time overrun. It acknowledged that delays caused by RoW issues were beyond the Petitioner's control and thus condoned the majority of the delay. Conversely, the remaining delay period was deemed non-justifiable. Furthermore, regarding the Sharing Regulations, the Commission clarified that the previous orders related to the 2010 Sharing Regulations do not extend to the current case governed by the newer 2020 Sharing Regulations. The reasoning underscored the necessity to apply the appropriate regulatory framework based on the temporal applicability of the Sharing Regulations.

Impact

This Judgment sets a clear precedent regarding the application of successive Sharing Regulations. By affirming the distinct applicability of the 2010 and 2020 Sharing Regulations, the Commission ensures that transmission tariffs are determined in alignment with the most current regulatory frameworks. This decision provides clarity for future tariff determinations and prevents misapplication of outdated precedents, thereby enhancing regulatory consistency and predictability in the electricity transmission sector.

Complex Concepts Simplified

Conclusion

The CERC's decision in the Power Grid Corporation case underscores the importance of adhering to the current regulatory frameworks governing transmission tariffs. By distinctly applying the 2020 Sharing Regulations and disassociating from earlier precedents not pertinent to the present circumstances, the Commission promotes regulatory clarity and fairness. This Judgment not only resolves the immediate concerns of the Petitioner but also sets a robust framework for future tariff determinations, ensuring that transmission charges are aligned with the latest regulatory standards and operational realities.