1 Through its Managing Director DLW, Bhikapur, Varanasi 12591260,1261,and1262...¢  2020. 9. 12.¢  DLW,

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    Petition No.1258/2017, 1259/2017, 1260/2017, 1261/2017 & 1262/2017


    Hon’ble Sri Suresh Kumar Agarwal, Chairman

    IN THE MATTER OF : Petition under section 86 (1) (f) and other relevant provisions of the Electricity Act 2003 read with the provisions of Power Purchase Agreements dated 10.12.2010 and other relevant regulations


    M/s Bajaj Energy Limited (Formerly Bajaj Energy Private Limited) Registered Office B-10, Sector-3 Noida-201302


    1. U.P. Power Corporation Ltd. Shakti Bhawan, 14, Ashok Marg, Lucknow-226 001 (U.P.) Through its Managing Director

    2. Pashchimancal Vidyut Vitran Nigam Ltd., Hydle Inspection House, Hydle Colony Victoria Park, Meerut Through its Managing Director

    3. Poorvancahl Vidyut Vitran Nigam Ltd DLW, Bhikapur, Varanasi Through its Managing Director

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    4. Madhyancahal Vidyut Vitran Nigam Ltd. 4-A, Gokhale Marg, Lucknow Through its Managing Director

    5. Dakshinanchal Vidyut Vitran Nigam Ltd. Urja Bhawan, 220KV U.P. Sansthan Bypass Road, Agra Through its Managing Director

    In the presence of:

    1. Sri Raghvendra Singh, Advocate General 2. Sri V.P. Srivastava, CE (PPA), UPPCL 3. Sri Naeem Khan, EE (PPA), UPPCL 4. Sri Sanjay Verma, SE (PPA), UPPCL 5. Sri D.R. Bandh, AE (PPA), UPPCL 6. Sri S.N.M. Tripathi, Director, Bajaj Energy Ltd. 7. Sri Amrendra Tripathi, Sr. Manager, BEPL 8. Sri Upendra Prasad, Advocate, BEL 9. Sri Anand Singh, President, BEL 10.Sri Amit Kr Pandey, Asst. Officer, BEL 11.Sri Amarjeet Singh Rakhra, Advocate, Counsel for UPPCL/Discoms 12.Sri Aroon Aslam, EE, UPPCL 13.Sri Altaf Mansoor, Advocate, UPPCL 14.Govind Maheshwari, Vice President, F&A, BEPL


    (Date of hearing 02.01.2018)

    M/s Bajaj Energy Limited has filed petition no.1258/2017, 1259/2017, 1260/2017, 1261/2017 & 1262/2017 under Section 86 (1) (f) of Electricity Act, 2003 read with the provisions of Power Purchase Agreement against exit notice dated 8.7.2017 and the notice dated 15.7.2017.

    2. The brief of the proceedings of the case are as under:

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    The Petitioner, M/s Bajaj Energy Limited (BEL) had signed five Power Purchase Agreements with UPPCL, the Respondent No.1 to set up five Thermal Power Plants of 90MW each at 5 locations in the State of Uttar Pradesh for supplying power to State owned distribution companies for 25 years. These PPAs were signed on 10.12.2010.

    Initially an MOU was signed in reference to the Energy Policy 2009 of the Govt. of U.P. and PPAs were executed in follow up of the MOUs. These Power Plants became operational during March-April 2012 and UPPCL on behalf of the Distribution Companies was purchasing power from these plants. The tariff for these power stations was determined by this Hon’ble Commission as per the provisions of the Section 62 of the Electricity Act 2003. On 08.07.2017, UPPCL issued an exit notice stating that the State Government has signed “Power for All” document with Govt. of India to provide 24x7 affordable power to all consumers. To make the power affordable, key action point under the PFA document is to bring down the power purchase cost of Uttar Pradesh. On scrutiny of power purchase cost from different sources in 2016-2017 to meet the electricity demand of the State it has been observed that the average rate of power from the aforesaid plants during FY 2016-2017 is Rs.7.63 per unit which is among the highest and is 100.791% higher as compared to average power purchase cost of Rs.3.80 per unit as approved by the Hon’ble Commission for Financial Year 2016- 17. In this background UPPCL does not wish to continue with the PPAs dated 10.12.2010 in respect of the aforesaid power plants.

    It has been mentioned in this notes that this will be treated as exit notice for UPPCL from PPA dated 10.12.2010 and UPPCL shall be deemed to be exited out from the aforesaid PPAs after 10 days from the date of issuance of the notice. Against this notice M/s BEPL filed a writ petition in Lucknow Bench of Hon’ble Allahabad High Court which after hearing both the parties passed an order dated 26.02.2017 relegating the Petitioner to UPERC to raise the dispute under section 86(1) (f) of Electricity Act 2003. The Hon’ble High Court asked the Petitioners that they are free to move an appropriate application for an interim relief before the Hon’ble Commission and directed the Commission that if an application is moved by the Petitioner, the Commission will proceed to decide the same in accordance with law within a period of one week from the date of its filing and would be free to pass ex-parte order if required or after affording due opportunity to the parties. It was further directed that the Commission would make endeavor to decide the

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    main application under Section 86(1)(f) of the Electricity Act 2003 within a period of 2 months from the date of its filing strictly in accordance to law.

    M/s BEPL filed the above Petition on 03.011.2017 along with an application for interim relief. The Commission fixed the hearing for 09.11.2017. In that hearing M/s UPPCL raised a preliminary objection that the affidavits filed with the petitions are not in the prescribed format of UPERC therefore, these petitions are defective and could not be heard on 9.11.2017. The Petitioner’s counsel made a request that he will file the revised affidavits on the same day but the Advocate General, UP appearing on behalf of UPPCL did not yield to the request of the Counsel of the Petitioner for hearing the matter on 9.11.2017. The Commission directed the Counsel of the Petitioner to revise the affidavits as per the regulations and listed the case for hearing on 10.11.2017. On 09.11.2017, the Petitioners counsel filed the revised affidavits and an application for taking the fresh affidavits on record and also an application to accept the correction of some typographical errors.IN hearing on 10.11.2017, the respondent’s counsel asked for amendment of the petition by the petitioner; however the Commission observed that the correction of typographical error does not require filing of amended petition and heard the matter. The Respondent’s counsel asked for some time for filing their written arguments. The Commission decided that the Petitioner’s counsel could argue their case and the Respondents could be given time to file their written arguments including the arguments made by the Petitioners in the hearing.

    The Petitioner’s counsel argued that the exit notice dated 8.7.2017 is arbitrary without jurisdiction and does not have the approval of UPERC. The Petitioner also prayed that after the exit notice the plants are lying idle and the Petitioner is not able to meet its regular expenses and has come to verge of default to lenders. The Petitioner’s counsel made a request to the Commission to grant stay on operation of aforesaid exit notice. The Commission asked the petitioner that when this matter was in Hon’ble High Court, on the direction of Hon’ble High Court, the Petitioner had approached UPPCL and had offered to implement a mechanism to reduce the variable cost of the projects but the matter could not be resolved between both the parties. The Commission in its order dated 10.11.2017 had recorded that besides the legal issues in this matter the Commission has to consider the public interest also and the Petitioner has to cooperate in the efforts to reduce the variable cost so that the energy from the plant could be scheduled and the average cost goes down. The Petitioner had assured that they are open to consider this option. The Commission in its order

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    dated 10.11.2017 had recorded that from the arguments it appeared that there is a scope for reduction in cost of power supplied from these power plants and the grievance of the respondents regarding higher tariff of these power plants could be resolved.

    The case was again listed for hearing on 14.11.2017. Respondent’s counsel raised certain objections on the wording of the order dated 10.11.2017 of the Commission asking for change in phrase “written arguments” with the word “written objections”. The Commission allowed the Respondents to file written arguments. On 14.11.2017 the respondents filed their written arguments primarily opposing grant of any interim relief. The main arguments taken by the respondents were as under:

    (i) That after signing a policy document regarding ‘Power for All’ they have to bring down the power purchase cost of UPPCL, therefore considering the supervening public interest it was necessary to cancel the unviable PPAs.

    (ii) That the action of termination of PPAs has been taken in larger public interest and in exercise of the doctrine of necessity.

    (iii) That UPPCL has constituted a task force to achieve the objective of the Power for All documents and this task force has taken a decision that no scheduling of power should take place from projects whose variable cost is more than Rs.3.46 per unit. Accordingly all companies whose variable cost is more than Rs.3.46 per unit were directed not to schedule power and UPPCL has informed the state generators as well as Central Sector projects of Government of India about the decision taken by the respondents. They also mentioned that no arbitrary decision on the part of the answering respondents has been taken against the petitioner.

    (iv) That in reply to exit notice the Petitioner gave an offer vide their letter dated 11.7.207 to the answering respondents for bringing down the