APTEL Sets Aside CERC Order in Greenko, Cites Pact Misreading

APTEL Sets Aside CERC Order in Greenko, Cites Pact Misreading

In a significant ruling, the Appellate Tribunal for Electricity (APTEL) has overturned a Central Electricity Regulatory Commission (CERC) order that had held Greenko Budhil Hydro Power Pvt. Ltd. liable for transmission charges during the period before its hydroelectric project was commissioned.

The judgment, delivered in a batch of four appeals  relates to the determination and truing up of transmission tariffs by CERC for the periods 2009–14 and 2014–19. Greenko, formerly known as Lanco Budhil Hydro Power Pvt. Ltd., had challenged a common CERC order dated May 10, 2019, which arose from four review petitions filed by the company.

Key issues in the case 

The central issue concerned the levy of transmission charges for the Chamera Pooling Station, a transmission asset of Power Grid Corporation of India Ltd. (PGCIL), now the Central Transmission Utility of India Ltd. (CTUIL). The disputed period was from November 1, 2011 — the date of commissioning of the Chamera Pooling Station — to May 24, 2012, when Greenko’s 70 MW Budhil Hydro Power Project became operational.

APTEL ruled that CERC had misread the tripartite Bulk Power Transmission Agreement (BPTA) dated October 18, 2007, signed between the appellant (Greenko), PTC India Ltd., and PGCIL. The tribunal held that the BPTA clearly defined the sharing of transmission charges, especially in scenarios where free power transfer arrangements with the state of Himachal Pradesh had not been made — a situation referred to as “Case II” in the agreement.

Terms Of The Tripartite Pact 

Under the terms of the BPTA, the Tribunal noted, Greenko was liable to bear transmission charges corresponding to 12% of the plant’s generation capacity for the first 12 years and 18% thereafter. PTC, which had contracted the remaining power, was responsible for the remaining 88% and 82% respectively during those periods.

APTEL emphasized that the BPTA was a binding tripartite agreement that superseded any earlier letters or representations made by Greenko. It also rejected CERC’s reliance on a 2005 indemnity agreement between PGCIL and NHPC, ruling that the document had no bearing on the current dispute since NHPC was not a party to the BPTA.

The Tribunal concluded that there was no material on record justifying CERC’s finding that Greenko was jointly liable with NHPC for the transmission charges during the pre-commissioning period.

In its ruling, APTEL set aside the impugned CERC order dated May 10, 2019, along with the earlier tariff orders dated November 16, 2012, and January 2, 2013. It allowed the review petitions filed by Greenko and directed CTUIL to quash the earlier invoices raised solely in the company’s name. CTUIL was further instructed to issue fresh invoices in accordance with the BPTA, reflecting the proper cost-sharing arrangement between Greenko and PTC.

The ruling marks a key clarification on the interpretation of power transmission agreements and could set a precedent for similar disputes in the sector.