Diversion Of Gas To Other Generating Stations Not Sufficient Ground To Seek Compensation When PPA Has No Such Provision: Supreme Court

While affirming the view of the Appellate Tribunal for Electricity, the Supreme Court held that the Electricity Board would not have to indemnify if there was no provision regarding compensation of full fixed charges and actual variable charges in respect of short supply of energy in the Power Purchase Agreement. A Bench of Justices Ajay Rastogi and CT Ravikumar was hearing an appeal moved by Peenya Electricity Ltd., an Independent Power Producer operating and maintaining a combined cycle gas turbine power generating station in Tamil Nadu, dedicated to the Tamil Nadu Electricity Board. The Tamil Nadu Electricity Regulatory Commission rejected the appellant’s claim relating to unpaid fixed charges of Rs.18.06 under Combined Cycle Operation as well as the claim of underpaid variable charges of Rs. “The submission made by learned counsel for the appellant that because of the diversion of gas to the other generating stations of the Board, at least on this account, the Board could not have made the appellant to suffer by citing the terms of PPA, on the first blush appears to be attractive but has no legs to stand for the reason that in the absence of there being any provision for compensation for capacity charges and variable charges due to the fact that the plant was not able to maintain the normative availability/PLF on account of shortage of fuel in terms of the Central Government’s Tariff Regulations, 2004, at least the respondent Board cannot be said to be at fault and that was the reason prevailed upon the Commission to arrive at the conclusion that the appellant was not entitled to payment of fuel fixed charges and actual variable charges in respect of supply of energy between 1 st July, 2006 and 15th June, 2009 during the period when partial parameters were rejected because of shortage of supply in view of the provision in PPA or tariff regulations”, the Court noted while dismissing the appeal.