Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai 400 005 Tel. 022 22163964/ 65/ 69 Fax 022 22163976 Email: mercindia@merc.gov.in Website: www.mercindia.org.in / www.merc.gov.in Case No. 112 of 2014 In the matter of Application of Limited for grant of Transmission Licence Smt. Chandra Iyengar, Chairperson Shri Vijay L. Sonavane, Member Shri Azeez M. Khan, Member The TaTa Power Company Limited, Bombay House, 24, Homi Mody Street, Mumbai 400 001 ORDER..Applicant Dated: 14 August, 2014 1. Introduction 1.1. The Limited (TPC) is a Company incorporated on 18 September, 1919 and registered under the Indian Companies Act, VII of 1913. 1.2. TPC owns and operates around 1140 ckt.km. of Transmission Lines at 220 kv / 110 kv with 20 Receiving Stations spread across Mumbai having a transformation capacity of around 8873 MVA as on 31 March, 2014. 1.3. Since TPC s existing Licence expires on 15 August, 2014, TPC submitted an Application for grant of a Transmission Licence on 23 May, 2014 in accordance with Sections 14 and 15 of the Electricity Act, 2003 (EA 2003) read with Regulations 4 and 13 of MERC (Transmission Licence Conditions) Regulations, 2004 along with its Amendment in 2006 ( Transmission Licence Conditions Case No. 112 of 2014 Page 1 of 33
Regulations )for a period of 25 years commencing from 16 August, 2014, for the transmission of electricity as follows: a. Area of transmission covering Mumbai city, Mumbai suburban area and Mira Bhayandar Municipal Corporation (together called Mumbai Transmission Area ); b. All existing Transmission Receiving Stations (including those outside the Mumbai Area) forming part of the Intra-State Transmission System of Maharashtra; c. All existing Transmission Lines of TPC entering Mumbai, forming a part of the Intra-State Transmission System of Maharashtra; and d. All proposed Transmission Lines and Transmission Receiving Stations as mentioned at Annexures 8 and 9 of its Application. 1.4. TPC has made the following prayers in its Application: a. Admit the present Application along with the attached documents, submitted by Tata Power for the grant of Transmission Licence under Section 14 and 15 read with Section 86(1)(d) of the Electricity Act 2003, and in pursuance of MERC (Transmission Licence Conditions)Regulations, 2004 including amendments thereof; b. Grant Transmission Licence to Tata Power for a period of 25 years with effect from 16th August, 2014, in accordance with the provision of Section 14 read and 15 of Electricity Act, 2003, read with MERC (Transmission Licence Conditions)Regulations, 2004 including amendments thereof, for the Transmission in Mumbai City, the Mumbai Suburban Area, Mira Bhayandar Municipal Corporation (viz. Mumbai Transmission Area), all existing Transmission Receiving Stations, all Transmission Lines of Tata Power entering Mumbai forming a part of intra-state transmission system (InSTS) of Maharashtra and all proposed Transmission Lines and Transmission Receiving Stations by Tata Power. c. Condone any inadvertent omissions/ errors/ shortcomings and permit Tata Power to add/ change/ modify/ alter this filing and make further submissions as may be required at a future date; and d. Any other relief that Hon ble Commission may deem fit. 1.5. TPC also forwarded a copy of its Application to the State Transmission Utility (STU) vide letter dated 27 May, 2014. 2. Regulatory Proceedings: 2.1. Based on preliminary scrutiny of the Application in accordance with Regulation 5.1 of the MERC (Transmission Licence Conditions) Regulations, 2004 as amended in Case No. 112 of 2014 Page 2 of 33
2006, the Commission conveyed the following data gaps and sought the following information, documents and clarifications from TPC vide e-mails dated 31 May and 2 June, 2014: a. Inconsistency observed in the data on transformation capacity and length of the Transmission Lines. b. An undertaking, as per the format provided by the Commission, in accordance with Transmission Licence Regulations. c. Specification of the Transmission Lines that originate from and terminate at Receiving Stations of other Transmission Licensees, and the voltage ratings of existing Receiving Stations. d. Details of TPC s Receiving Stations located outside Mumbai, along with their year of commissioning. e. Capacity of Transmission Lines used for transmitting power from outside Mumbai to Mumbai, and the capacity addition planned for these lines in the next 5 financial years. f. The names of the promoters, along with their respective ownership percentage, with appropriate modification in Schedule 1 or revising the date in Schedule 1 in accordance with TPC s submission. g. Management information with respect to the Information Technology (IT) functions. h. Clarification on the inconsistency in the number of Receiving Stations considering that in Annexure 7B of the Application. TPC has furnished details of 20 Receiving Stations, whereas Annexure 7C pertaining to the number of bays at each Receiving Stations, provides details of 24 Receiving Stations. Moreover, the Commission noted that it had not approved the Dehrand-Nagothane Transmission Line which TPC has included in the list of proposed Transmission Lines so approved. i. Resubmission of the Single Line Diagram (SLD) for the proposed Transmission Lines and existing Transmission Lines, clearly differentiating the proposed from the existing Transmission Lines. j. List of streets or parts of streets for which TPC has obtained authorisation to undertake transmission work in the proposed area. k. Data pertaining to existing and proposed systems in the following format: i. Existing System Transmission Lines with voltage levels, line name, originating and receiving point, layout and ckt.km length; ii. Existing System List of EHV Substation Bays with Receiving Station name, voltage level and number of bays; Case No. 112 of 2014 Page 3 of 33
iii. iv. Proposed System Transmission Lines with voltage levels, line name, originating and receiving point, layout, ckt.km length with STU and the Commission s approval; Proposed System List of EHV Substation Bays with Receiving Station name, voltage level, number of bays with STU and the Commission s approval; and v. Transmission Systems submitted to the Commission and STU for approval. l. Commission s approval letter date and number (pertaining to capital investments), and dates of submission of Capex proposals for schemes which are not yet approved by the Commission. 2.2. The Commission held the Technical Validation Session (TVS) on 3 June, 2014, when TPC made a presentation on its competencies, technological best practices adopted by it, current transmission assets and plan for future Transmission Lines. 2.3. TPC also elaborated the provisions of EA 2003 and the MERC Transmission Licence Regulations to support its contention that an Area Specific Licence can be granted by the Commission. TPC requested the Commission to grant it an Area Specific Licence for Mumbai Area and a Line Specific Licence for Transmission Lines which are proposed to bring power from outside to the Mumbai area. 2.4. On 4 June, 2014, TPC submitted its response in respect of the data gaps identified by the Commission, as follows: a. Details of length of Transmission Lines and the transformation capacity were provided. b. TPC would submit the undertaking sought by the Commission shortly and requested the Commission to admit its Application in the meantime. c. Details of Transmission Lines originating from or terminating at Receiving Stations of other Transmission Licensees, and the voltage rating of existing Receiving Stations were submitted. d. Details of year of commissioning and purpose of Receiving Stations at IXORA, Panvel and Ambernath, which are located outside the Mumbai Area. e. The current capacity of the tie lines for import of power to Mumbai was stated to be around 1710 MW without any security margin. TPC also submitted details of the additional schemes planned for enhancing import capacity. f. Details of the share holding pattern as on 31 March, 2014. TPC also mentioned that its website is yet to be updated and only the shareholding pattern as on 31 December 2013 has been uploaded. g. The management information pertaining to IT functions. Case No. 112 of 2014 Page 4 of 33
h. TPC clarified that the Grant Road Sub-Station has no transformer but only bays. Accordingly, it has not been considered in the list of existing Receiving Stations under TPC. The Receiving Stations at Davdi and Central Railway (Wadala) are consumer funded schemes and have not been considered in the list of existing Receiving Stations. Further, the bays in the Maharashtra State Electricity Transmission Company Limited s (MSETCL) Receiving Stations which are maintained by TPC have been included (along with the Receiving Stations) in the list of bays pertaining to Receiving Stations maintained by TPC. i. The Commission had given in-principle approval to the Dehrand-Nagothane Transmission Line vide letter No. MERC/CAPEX/20112012/01103 dated 27 July, 2011. It was resubmitted to the Commission only for approval of the revised capital cost. Accordingly, the Transmission Line has been listed in both the categories, viz., Approved by MERC and To be approved by MERC. j. TPC submitted the revised Single Line Diagram (SLD), and stated that not all the Receiving Stations proposed had been shown in the revised SLD as the incoming lines for some of the Receiving Stations are still to be identified. k. The streets which are required to be repaired/ dug up for the purpose of laying cables or lines are under the purview of the Local Authorities. TPC submitted a list of authorities from whom permissions have been sought for laying Transmission Lines and cables. l. Data on the existing and proposed transmission system has been submitted in the format specified. TPC also submitted details of STU and Commission approvals pertaining to various Transmission Systems. 2.5. TPC also submitted that certain submissions that had been made by it were erroneous. Accordingly, it submitted a revised Application for grant of Transmission Licence fulfilling the data gaps identified by the Commission, on 5 June, 2014. 2.6. After verification, the Commission found the revised Application to be complete and accompanied with the requisite information, particulars and documents. 2.7. The Commission accordingly admitted TPC s revised Application for grant of Transmission Licence on 11 June, 2014 vide letter no. MERC/Case No. 112 of 2014/20142015/00500. The Commission directed TPC to furnish an undertaking as per the Transmission Licence Regulations and to issue a Public Notice in accordance with Section 15(2) of EA 2003 read with Regulation 6 of the Transmission Licence Regulations. TPC was also directed to serve a copy of its Application to the Chief Engineer, STU in accordance with Section 15(3) of EA 2003. 2.8. TPC submitted the undertaking on 14 July, 2014. TPC also published a Notice of its Application in two English language (DNA and Financial Express) and two Marathi language (Loksatta and Prahar) newspapers on 13 June, 2014. A copy of the Application along with enclosures was made available on TPC s website. Case No. 112 of 2014 Page 5 of 33
2.9. In reply to TPC s letter to STU dated 27 May, 2014, STU provided its recommendation for the grant of Transmission Licence vide letter no. MSETCL/CO/C.E-STU/007519 dated 27 June, 2014. 2.10. Section 15(2)(ii) of EA 2003 provides that if an Application for a Licence is received for an area including the whole or any part of any cantonment, aerodrome, fortress, arsenal, dockyard or camp or of any building or place in the occupation of the Central Government for defence purposes, no objection to the grant of the Licence on the part of the Central Government needs to be ascertained. 2.11. Accordingly, the Commission issued letter no. MERC/Case No. 112 of 2014/00701/11072014 dated 11July, 2014 to the Ministry of Defence, Ministry of Shipping and Ministry of Civil Aviation inviting objection(s), if any, with reference to TPC s Application. The Commission did not receive any objections in this respect within two weeks as had been stipulated. 2.12. After evaluating the Application submitted by TPC and considering the recommendations of the STU, the Commission published a Public Notice on 17 July, 2014 in two English (DNA and The Times of India) and two Marathi (Loksatta and Maharashtra Times) newspapers stating the details of the proposed Transmission Licence Application as submitted by TPC in accordance with Section 15(5)(a) of the EA 2003. The Notice specified that the Commission is proposing to grant a Transmission Licence to TPC under Alternative 2 of its Transmission Licence Regulations. Suggestions or objections were invited by 7 August, 2014, and it was stated that the Public Hearing would be held on 12 August, 2014 at the office of the Commission (World Trade Centre, Centre 1, 13th Floor, Cuffe Parade, Mumbai 400 005). 2.13. The Public Hearing was held accordingly on 12 August, 2014. TPC and STU were represented by their respective officials. The list of persons who were present is at Annexure II. 2.14. During the hearing, TPC made a presentation on TPC s history in the transmission business and steps taken to improve the quality and efficiency of transmission. TPC reiterated its claim for a combination of (i) Licence for Mumbai Transmission Area and (ii) Licence for Receiving Stations (or Transmission Receiving Stations) and Transmission Lines which are situated outside Mumbai Area but are owned by it or proposed to be constructed and owned by it in future and which would form a part of the Intra-State Transmission System (InSTS) of Maharashtra. 2.15. At the Public Hearing, the representative of STU reiterated its recommendations dated 27 June, 2014. 3. Objections/ Suggestions 3.1. In response to the Public Notice on the grant of Transmission Licence to TPC, the Commission received no objections from the Central Government. Case No. 112 of 2014 Page 6 of 33
3.2. The Commission received two objections/ suggestions, as set out below along with TPC s response and the Commission s view. Objection/Suggestion of Shri Ulhas Chaudhari (Received within time) 3.3. While supporting the grant of Transmission Licence to TPC, Shri Ulhas Chaudhari enquired whether TPC had, in past, provided transmission connections to the consumers of R-Infra Ltd and BEST as required, or it planned to do so. Otherwise, the Commission should make TPC responsible for making unwarranted investments. 3.4. He suggested that consumers having consumption of more than 1 MW should be kept under the ambit of the transmission tariff instead of distribution tariff. Such consumers may also be declared as ones purchasing power under Open Access as they have made investments. Further, earlier concession given to BEST on the electricity provided through High Tension (110 kv) connections may be resumed. This Concession should be provided through the transmission fund to BEST. 3.5. The investment proposed by TPC in its Transmission Business Plan for the period from FY 2014-15 to FY 2019-20 is unwarranted. Approval should be given only to those schemes that are necessary for capacity building and to meet the rise in demand. 3.6. Shri Chaudhari also submitted that, a. As per the report of Maharashtra Energy Development Agency (MEDA), 70% electricity can be saved. No specific measures have been undertaken so far in this regard; b. Green Buildings can save up to 10% electricity. Additionally, a minimum of 10% of the electricity requirements can be generated through solar rooftop generation in buildings. c. Energy audit of consumption of power in buildings has not been done since long; d. The Commission should make efforts to ensure completion of projects like the Green Liquefied Gas Line project. Approval to the projects proposed by TPC will harm the environment; and 3.7. There is no longer any excavation and back-filling potential in Mumbai and whatever land is available should be utilized judiciously. TPC s Reply 3.8. Vide letter dated 7 August, 2014, TPC responded that the transmission outlets requested by R-Infra and BEST from TPC s transmission system have been given after approval from STU. Further, any capital investment is taken up after due approvals from STU. 3.9. Any consumer can avail of Open Access on the Transmission System by following the procedure specified in MERC (Transmission Open Access) Regulations, 2014, and TPC would play the role of non-discriminatory Open Access provider. Case No. 112 of 2014 Page 7 of 33
3.10. All capital investments related to the transmission network are made as per the STU Plan, and only after approval of the Commission as well as STU. Commission s view 3.11. As regards the objections set out at paras 3.3 and 3.5 above, the Commission has noted TPC s reply. All capital expenditures undertaken by TPC are to be carried out as per the approvals of the Commission and STU. The Commission undertakes appropriate scrutiny of the proposed schemes prior to granting such approvals. 3.12. As regards the objections set out at para 3.4, any consumer can avail of Open Access on the Transmission System by following the procedure specified in the MERC (Transmission Open Access) Regulations, 2014. The issue of tariff for consumers connected to High Tension Line (110 KV) is not relevant to grant of Transmission Licence to TPC and may be raised in the proceedings relating to the Tariff Petition of Distribution Licensee. Objection/Suggestion of Shri Prashant K Zaveri (Received after the due date) 3.13. Shri Prashant K Zaveri has stated that the Supreme Court has passed recent Orders to grant the Licence. He stated that the monopoly of BEST must end and healthy competition must be promoted in light of the reforms in the power sector and global investments. Since TPC is supplying directly, its per unit cost will be less than that of BEST. TPC has been providing better service than BEST for the last several years. With this consideration, TPC should be granted the Transmission Licence. TPC s Reply 3.14. TPC has stated that it understood that Shri. Zaveri is in favour of grant of Transmission Licence to TPC. The other suggestions/objections made pertain to Distribution Licence, which is not the subject matter of the current Application of TPC. Commission s View 3.15. The objection/suggestions of Shri. Zaveri relate to competition in distribution of electricity and are not the subject matter of the present Application for grant of Transmission Licence. 4. Submissions of the Applicant 4.1. TPC had submitted that the following four Licences had been issued to its predecessors under the erstwhile Indian Electricity Act, 1910 to supply electricity in and around Mumbai, which have been amended from time to time by the Industries, Energy and Labour Department, Government of Maharashtra: a. The 1907 Licence: The Bombay (Hydro-Electric) Licence dated 7 March, 1907 was originally granted to Dorabji J. Tata and Ruttonji J Tata. This Licence was Case No. 112 of 2014 Page 8 of 33
assigned on 7 September, 1910 in favour of the Tata Hydro Electric Power Supply Co. Ltd.; b. The 1919 Licence: The Andhra Valley (Hydro-Electric) Licence dated 3 April, 1919 was issued in favour of the Tata Hydro-Electric Power Supply Co. Ltd.; c. The 1921 Licence: The Nila Mula Valley (Hydro-Electric) Licence, 1921 dated 15 November, 1921 was issued in favour of Tata Power; and d. The 1953 Licence: The Trombay Thermal Power Electric Licence, 1953 dated 19 November, 1953 in favour of Tata Hydro-Electric Supply Co. Ltd., The Andhra Valley Power Co. Ltd. and Tata Power. 4.2. On 18 October, 2000, Bombay High Court passed a Judgment in Petition No. 828 of 2000 connected with Company Application No. 336 of 2000, amalgamating the Tata Hydro-Electric Power Supply Co. Ltd. and the Andhra Valley Power Supply Co. Ltd. with the Applicant. Pursuant to that Judgment, the transferor Companies (i.e., Tata Hydro-Electric 'Power Supply Co. Ltd. and the Andhra Valley Power Supply Co. Ltd.) stood dissolved and all the approvals, consents, licences, registration, etc. connected with or related to the undertaking of the transferor entities stood automatically transferred to TPC with effect from 1 April, 2000. 4.3. Upon sanction of the amalgamation by Bombay High Court by its Judgment dated 18 October 2000, the Government of Maharashtra, by its Resolution No. lea-2001/cr-10509/nrg-1 dated 12 July, 2001 gave its consent for the transfer of the 1907 Licence, 1919 Licence and 1953 Licence to the Applicant. The Government of Maharashtra, vide its Notification No. LTT. 6789/C.R.- 1459(iv)/NRG-2 dated 14 June, 1991, extended the validity period outlined under Clause 14 of these Licences up to 15 August, 2014. 4.4. In the view of the above, TPC has submitted the Application in accordance with the provisions of Sections 14, 15 and 81(1)(d) of the EA 2003 and its Amendments, and as per the provisions of Transmission Licence Regulations. The Application was made as per Schedule 1 under the Transmission Licence Regulations with the requisite enclosures. 4.5. In accordance with Schedule 1 of Transmission Licence Regulations, TPC submitted details of incorporation of the Company, address of the registered office, technical information such as area of transmission, existing and proposed transmission network, financial information, list of defence areas and streets, copy of processing fees and an undertaking. 4.6. In its Application, TPC has sought a combination of (i) Licence for Mumbai Transmission Area and (ii) Licence for Receiving Stations (or Transmission Receiving Stations) and Transmission Lines which are situated outside the Mumbai Area that are owned by it or proposed to be constructed and owned by it, in future and which would form a part of the Intra-State Transmission system (InSTS) of Case No. 112 of 2014 Page 9 of 33
Maharashtra. TPC submitted the reasons for seeking a Transmission Licence for such combination as below: a. Its transmission system in and around Mumbai cannot be identified as a single transmission project with agglomeration of Transmission Lines. The existing transmission network comprises composite schemes of over 20 transmission Receiving Stations with over 1100 Ckt. Km of transmission network of overhead lines. It also includes underground cables (220 kv/110 kv/33 kv/22 kv) that cater to the transmission requirement of entire Mumbai and its suburban areas. Further, it connects Generating Stations at Trombay as well as Hydro Generating Stations at Bhira, Bhivpuri and Khopoli. b. As for improvement in the Transmission System, several schemes would be undertaken. Such schemes may range from large schemes such as setting up of Transmission Line or setting up of a Receiving Station, to a small scheme such as replacement of equipment like transformers. c. Any modification in the form of addition of small equipment would entail amendment to the Transmission Licence under Sections 15 or 18 of the EA 2003. Further, each time an approval is granted by the Commission (under the Capital Investment approval procedure) for execution of the scheme, it would require the amendment to the Transmission Licence. This would be extremely cumbersome and time consuming. Hence a Transmission Licence for specific schemes pertaining to Transmission Systems may not be sufficient. d. TPC s transmission network is not restricted to the Mumbai Area alone. In addition to feeding the loads of all the three Distribution Licensees in Mumbai, i.e., R-Infra, BEST and TPC(Distribution), it is feeding around 250 MW of the Maharashtra State Electricity Distribution Company Limited (MSEDCL) load outside Mumbai, i.e., at Ambernath, Kalyan, Kolshet (Thane District) and Salsette (Bhandup), in addition to MSEDCL load in North West Mumbai from Saki Station. TPC is also feeding MSEDCL load at Neral through its Bhivpuri Ambernath lines which are outside the Mumbai Area. e. TPC has existing transmission assets outside Mumbai, and has proposed to construct 400 kv lines from the State Transmission Grid /National Grid along with a 400 kv ring system, which would bring power from outside Mumbai to Mumbai. This would take care of the future load growth of all the four Distribution Licensees in Mumbai city. Accordingly, the grant of a Transmission Licence for the Mumbai Area alone would not be adequate to undertake the schemes pertaining to the existing and proposed transmission business activity by TPC. 4.7. Alternatively, the Commission could grant a Transmission Licence for the entire State of Maharashtra. Case No. 112 of 2014 Page 10 of 33
5. Compliance Evaluation and Analysis by the Commission 5.1. The Commission verified the submissions of the Applicant in relation to compliance with the Schedule 1 of Transmission Licence Regulations as below: Sr. No. Particulars Submission 1 General Information Name, Primary Contact details Submitted 2 Information about the applicant Registered office, date of incorporation etc. Submitted 3 Enclosures Incorporation documents Submitted 4 Enclosures Technical Information Submitted 5 Description of the actual and proposed location of the system of electric lines Submitted 6 Detailed map of the proposed area of transmission Submitted 7 List of defence areas Submitted 8 List of street(s) which are repairable Submitted 9 Financial Information Submitted 10 Copy of receipt of processing fees Submitted 5.2. During verification, the Commission noted that the undertaking envisaged in the Transmission Licence Regulations had not been provided and directed TPC to submit it. TPC submitted the undertaking on 14 July, 2014 in the format specified by the Commission. 5.3. The Commission noted that the TPC s submissions are in compliance with EA 2003 and its Transmission Licence Regulations. 5.4. The Commission evaluated the claims of TPC as per the provisions of EA 2003 and Transmission Licence Regulations and has considered the recommendations provided by the STU on the grant of Transmission Licence to TPC. 5.5. In its Application, TPC has referred to Section 14 of the EA 2003, and claimed that the Commission can grant Licence to an Applicant in any area as specified in the Licence. TPC also contended that Regulation 13 of the Transmission Licence Regulations stipulate that the area of transmission of the Transmission Licensee shall be the area as specified in the Licence. 5.6. The Commission notes that Para 3 Part II General Terms and Conditions in Schedule II of its Transmission Licence Regulations provides for two alternatives for the grant of Transmission Licence: a. Alternative 1: The area of Transmission shall be the State of Maharashtra; and Case No. 112 of 2014 Page 11 of 33
b. Alternative 2: The Licence authorises the Transmission Licensee to establish and operate certain specific Transmission Lines (i.e., Line Based Transmission Licence) 5.7. In accordance with Alternative 1 set out above, the Transmission Licence can be granted for the area which is the entire State of Maharashtra. Any area lesser than this does not qualify under Alternative 1. Hence, the Commission rejects the claim of TPC for grant of Transmission Licence for the Mumbai Transmission Area. 5.8. In its Application, TPC has sought a combination of (i) Licence for Mumbai Transmission Area and (ii) Licence for Receiving Stations (or Transmission Receiving Stations) and Transmission Lines situated outside Mumbai Area which are owned by it or proposed to be constructed and owned by it in future and which would form a part of the Intra-State Transmission System of Maharashtra. TPC has submitted the rationale for seeking Transmission Licence for such combination, and intimated the STU accordingly for its recommendation vide letter dated 27 May, 2014. 5.9. In response, the STU has recommended the grant of Transmission Licence for a combination of (i) Licence for the Mumbai Transmission Area and (ii) Licence for Receiving Stations (or Transmission Receiving Stations) and Transmission Lines situated outside Mumbai Area that are owned by TPC or proposed to be constructed and owned by TPC in future and forming part of the Intra-State Transmission System (InSTS) of Maharashtra, and which are in the STU plan approved by the Commission. In its letter of recommendation dated 27 June, 2014, for grant of Transmission Licence, the STU has also stated that: a. As per the clarification dated 9 October, 2010 issued by the Ministry of Power (MoP) regarding Clause 5.1 and Clause 7.1 of Tariff Policy, excepting transmission projects for which Bulk Power Transmission Agreements (BPTAs) / Transmission Service Agreements (TSAs) have been signed on or before 5 May, 2011, Tariff based Competitive Bidding shall be applicable for the remaining projects. b. The present power scenario in Mumbai is critical and there is an urgent need for transmission system strengthening of the Mumbai power system considering the severe Right of Way (RoW) issues, environmental norms and load growth in the Mumbai Metropolitan area. TPC is already operating a transmission network in the Mumbai Power Transmission System and has enough experience of successful execution of transmission projects in and around Mumbai, and possesses all the technical capabilities, capital adequacy, and managerial and administrative capacity to fulfil the requirements of Sections 14 and 15 of the EA 2003 and the Commission s Transmission Licence Regulations. c. In view of the above, STU has recommended that TPC be granted the Transmission Licence for a combination of i. Licence for Mumbai Transmission Area; and Case No. 112 of 2014 Page 12 of 33
ii. Licence for Transmission Receiving Stations and Transmission Lines situated outside Mumbai Area that are owned by TPC or proposed to be constructed and owned by TPC in future and forming part of the Intra- State Transmission System of Maharashtra, and which are in STU plan approved by the Commission. d. While granting the Transmission Licence, the Commission may specify all the conditions or any other relevant condition, which the Commission deems fit, for Competitive Bidding. 5.10. The Commission noted the recommendation made by the STU. With regard to the combination of Mumbai Area and Line Specific Licence to TPC, the Commission has rejects the Area Basis Licence for reasons specified elsewhere. 5.11. The Commission s views on grant of Transmission Licence for the entire State of Maharashtra are as follows:- a. The clarification dated 9 December, 2010 of the Ministry of Power relating to Clause No. 5.1 & 7.1 of the Tariff Policy, makes it clear that all transmission projects except transmission projects of STUs/CTU for upgradation/strengthening of existing lines and associated sub-stations and projects for which BPTA(s)/TSA(s) have been signed on or before 5 January, 2011, should be through Competitive Bidding. b. Clause 7.1(6) of the Tariff Policy provides that: Investment by transmission developer other than CTU/STU would be invited through competitive bids. The Central Government will issue guidelines in three months for bidding process for developing transmission capacities. The tariff of the projects to be developed by CTU/STU after the period of five years or when the Regulatory Commission is satisfied that the situation is right to introduce such competition (as referred to in para 5.1) would also be determined on the basis of competitive bidding. c. The Tariff Policy was notified by Ministry of Power vide Resolution No. 23/2/2005- R&R (Vol. III) dated 6 January, 2006. While, the substantive provisions of the Tariff Policy came into effect from that date, the procedural part concerning the issue of guidelines within three months for the bidding process for developing transmission capacities was effected when the Ministry took the following actions: (i) Notified the Guidelines for Encouraging Competition in Development of Transmission Projects notified vide Resolution No. 11/5/2005-PG(ii) dated 13th April, 2006 and were amended on 7 July 2007, 10 October 2008 and 2 May 2012 under the provision of Electricity Act 2003 published in the Gazette of India, Part I, Section 1; (ii) Constituted the Empowered Committee on 14th June 2006 to give effect to and implement the provisions of Guidelines for Encouraging Competition in Case No. 112 of 2014 Page 13 of 33
Development of Transmission Projects ; (iii)notified the Tariff based Competitive-bidding Guidelines for Transmission Service on 17th April, 2006 vide Resolution No. 11/5/2005-PG(i) published in the Gazette of India, Part I, Section 1. d. The Tariff based Competitive-Bidding Guidelines for Transmission Service, made under the provisions of section 63 of the EA 2003 state that (under Clause 2.2) the Guidelines shall apply for procurement of transmission services for transmission of electricity through Tariff based Competitive Bidding through the mechanisms described in the Notification, and to select transmission service provider for a new Transmission Line and to Build, Own, Maintain and Operate the specified transmission system elements. e. Clause 2.4 of the Guidelines provides that procurement of transmission services would include all activities related to survey, detailed project report formulation, arranging finance, project management, obtaining Transmission Licence, obtaining right of way, necessary clearances, site identification, land compensation, design, engineering, equipment, material, construction, erection, testing and commissioning, maintenance and operation of Transmission Lines and/or substations and/or switching stations and/or HVDC links, including terminal stations and HVDC Transmission Line. f. Clause 3.2 provides that, for procurement of transmission services required for any inter-state Transmission Project, the Central Government shall notify any Central Government Organization/ Central Public Sector Undertaking or its wholly owned subsidiary (Special Purpose Vehicle) to be the Bid Process Coordinator (BPC). The Ministry of Power may review the nomination of BPC at any time. The Empowered Committee constituted under the Guidelines for encouraging competition in development of Transmission Projects would be the BPC till any other organization is nominated by the Ministry of Power. g. For intra-state transmission, the Guidelines provide that 3.3. For procurement of transmission services required for intra-state transmission, the appropriate State Government may notify any Organization/ State Public Sector Undertaking especially engaged for this purpose by the appropriate state government or BPC notified by the Central Government to be the BPC for the State. h. The Guidelines also require that the bid documentation be approved by the Appropriate Commission, or the BPC could use the standard bidding documents notified by Ministry of Power. Approval of the Appropriate Commission would be necessary if any material deviation is proposed. i. On the requirement of Transmission Licence, the Guidelines state that:- 5.1. The successful bidder shall be designated as the Transmission Service Provider (TSP), hereinafter referred to as the TSP, after executing the TSA and Case No. 112 of 2014 Page 14 of 33
acquiring the SPV. The TSP shall seek transmission license from the appropriate Regulatory Commission, if it is not a deemed licensee. The TSA shall be effective from the date of grant of license from the appropriate Regulatory Commission. j. The Guidelines also have provisions relating to Transmission Charge Structure, Time Table for Bid Process, etc. In the clause on Contract award and conclusion they state as under:- 12.2. The TSP shall make an Application for grant of transmission license to the Appropriate Commission within ten days of issuance of LOI or signing of TSA, whichever is later k. The Commission specified that MSETCL, as the STU has the key responsibility of network planning and development based on the National Electricity Plan in co-ordination with the concerned agencies as provided in the EA 2003. The STU is responsible for planning and development of the Intra-State Transmission System [Paragraph 5.3.10 of the National Electricity Policy (NEP)]. The role and functions of STU under Section 39 EA 2003 and as a Transmission Licensee under Section 40 are different. Paragraph 5.3.10 of the NEP provides that Special mechanisms would be created to encourage private investment in transmission sector so that sufficient investments are made for achieving the objective of demand to be fully met by 2012. l. The Guidelines for Encouraging Competition in Development of Transmission Projects and the Tariff based Competitive-Bidding Guidelines for Transmission Service further these aforesaid objectives. The STU is required to undertake network expansion and procurement of transmission services through a transparent bidding process. 5.12. In view of the above, the Commission notes that TPC cannot be granted Transmission Licence for the entire State of Maharashtra considering that paragraph 5.1 read with 7.1(6) of the Tariff Policy requires tariff based Competitive Bidding for Transmission Services for the projects identified from the STU s 5 year Plan. 5.13. The Commission also noted the submission made by TPC regarding the requirement of amendment to Licence each time there is a modification in schemes if it is granted a Line Specific Licence. The Commission specifies that such Licence is issued for Ckt. Km. of Transmission Lines and a certain number of bays. The Applicant needs to state only the Ckt. Km of Transmission Lines and the number of bays envisaged in its Application for grant of Transmission Licence. Only additions, modification, or upgradation to lines and bays would require amendment to the Transmission Licence. 5.14. The Commission observes that, for any modification or addition to the Transmission Lines and bays, an appropriate evaluation has to be necessarily done in accordance with the provisions of EA 2003 and MERC (Transmission Licence Conditions) Regulations, 2004 as amended in 2006 before the approval can be granted to the Applicant. Case No. 112 of 2014 Page 15 of 33
5.15. The Commission, having considered the submissions made and material placed on record and the provisions of law, is of the view that TPC satisfies the requirements for the grant of Transmission Licence under Alternative 2 of its Transmission Licence Regulations. 5.16. The Commission has verified the existing and proposed transmission schemes submitted by TPC. The Commission notes that the number of transmission schemes claimed by TPC was in variance with the schemes mentioned in the STU Five Year Transmission Plan for FY 2014-15 to FY 2018-19. The Commission also noted discrepancy in the data submitted by the Applicant and the STU Plan pertaining to various schemes. 5.17. The Commission held a meeting with representatives of TPC on 22 July, 2014 and verified the details of existing and proposed transmission systems. TPC clarified that the scope of the proposed schemes were curtailed and clubbed while including them in the STU Plan. The Commission directed TPC to submit revised details of all the transmission schemes in accordance with the STU Plan for FY 2014-15 to FY 2018-19 and to write to the STU to verify and confirm if the proposed transmission schemes are correct and in order. 5.18. TPC submitted revised details of the transmission schemes as per the STU Plan to the Commission under letter dated 23 July, 2014 and also requested STU to verify and confirm if the proposed transmission schemes were correct and in order. 5.19. STU replied to the Commission on 25 July, 2014 that the proposed transmission system mapped with the STU plan have been found to be correct and in order and could be included in the Licence. 5.20. A meeting was also held with the STU, TPC and the Commission s representatives on 5 August, 2014 for reconciliation of the proposed schemes with the STU plan. After reconciliation, TPC submitted revised Annexure 9 (a) & (b) along with 3 schemes which were not a part of the STU Plan but were approved by the Commission and requested that these be included in the Transmission Licence. 5.21. The Commission has validated the proposed transmission schemes submitted as above. It has considered the Transmission Lines and bays pertaining to schemes that are included in the STU Plan, and also the three schemes which were approved by it but not listed in the STU Plan. 5.22. Further, 16 Transmission Schemes proposed by TPC which are neither approved by the Commission and STU nor included in the STU Plan are rejected. The Commission directs TPC to approach the Commission on case to case basis for these 16 Transmission Schemes. 5.23. The Commission, vide letter dated 8 August, 2014 directed TPC to validate the existing transmission system information as submitted in Annexure 7. 5.24. Accordingly, on 11 August, 2014, TPC submitted a copy of the letter from Maharashtra State Load Despatch Centre (MSLDC) Kalwa to the Commission. Case No. 112 of 2014 Page 16 of 33
5.25. In its letter no. MSLDC/Tech-SO/1463/08082014 dated 08 August, 2014, MSEDCL submitted that it has validated the details of TPC s existing transmission system based on: a. Transmission system data of TPC being submitted to MSLDC on monthly basis for certification of the Transmission System Availability; and b. Details of existing transmission system data as on 31 March, 2014 submitted by TPC along with the request for validation. 5.26. MSLDC stated that the validation has been done without any physical verification due to time constraints. 5.27. The Commission considered the details of the existing transmission system as validated by MSLDC, and has accordingly considered the Transmission Lines and bays for the existing transmission network. 5.28. The Transmission Lines and bays pertaining to the existing and proposed transmission schemes have been listed in Annexure I. 6. Grant of Transmission Licence: 6.1. In exercise of the powers vested in the Commission under Section 14 of EA 2003, the Commission grants a Transmission Licence to TPC as a Transmission Licensee, under Alternative 2, in accordance with the MERC (Transmission Licence Conditions) Regulations, 2004 as amended in 2006, for a period of 25 years from 16 August, 2014. 6.2. This Transmission Licence is granted for the Transmission Lines and the Receiving Stations (or Transmission Receiving Stations) located in and outside the Mumbai area, owned by TPC or proposed to be constructed and owned by TPC in future and forming part of Intra-State Transmission System of Maharashtra. The Transmission Lines and Receiving Stations under the Licence are listed in Annexure I. 6.3. The Commission directs that the Transmission Licence as above be issued by the Secretary of the Commission. It also directs its Registry to forward a copy to the Government of Maharashtra, all Electricity Transmission Licensees and Distribution Licensees in the State of Maharashtra, the Central Electricity Authority, the concerned Local Authorities/Self-Governments (Municipal bodies) of the area through which the Transmission Lines pass, and to upload it on the website of the Commission. 6.4. The grant of Licence shall be subject to TPC complying with the provisions of the EA 2003, the Rules framed by the Appropriate Government, applicable Regulations and all tariff parameters specified under the Tariff Regulations by the Commission, the guidelines for in-principle clearance of proposed investment schemes, and all applicable statutes. 6.5. The Commission directs TPC to submit its Tariff filings to the Commission in accordance with the applicable Regulations. Case No. 112 of 2014 Page 17 of 33
7. Summary of Rulings 7.1. The Commission notes that TPC has applied for a Transmission Licence from 16 August, 2014 as its existing Transmission Licence is expiring on 15 August, 2014. The Commission is of the view that TPC satisfies the requirements to qualify for grant of such Transmission Licence in accordance with the MERC (Transmission Licence Conditions) Regulations, 2004 as amended in 2006. 7.2. The Commission observes that TPC has claimed that Transmission Licence can be granted by the Commission for any area under Section 14 of the EA 2003. The Commission has rejected this claim, since a Transmission Licence cannot be granted for any area other than the entire State of Maharashtra in terms of the provisions in its Regulations. 7.3. The Commission also rejects, for reasons detailed elsewhere in this Order, TPC s alternative claim for grant of a Licence for the whole of the State of Maharashtra. 7.4. The Commission notes that TPC has sought grant of Transmission Licence for a combination of (i) Mumbai Transmission Area and (ii) Receiving Stations (or Transmission Receiving Stations) and Transmission Lines which are situated outside Mumbai Area which are owned by it or proposed to be constructed and owned by it, in future, which would form a part of the Intra-State Transmission System of Maharashtra. The Commission rejects TPC s claim for grant of a Transmission Licence for the Mumbai Area, and holds that TPC can be granted a Transmission Licence under Alternative 2 (i.e. Line Specific), in accordance with the Transmission Licence Regulations for a period of 25 years from 16 August, 2014. 7.5. For the purpose of this Transmission Licence, the Commission has included all the existing Transmission Systems as proposed by TPC. The Commission has also included the proposed schemes which are approved by it and included in the STU Plan, and the three schemes which were approved by it but not listed in the STU Plan for the period FY 2014-15 to FY 2018-19. The details of these Transmission Lines and bays are at Annexure I. 7.6. 16 Transmission Schemes proposed by TPC which are neither approved by the Commission and STU nor included in the STU Plan are rejected. The Commission directs TPC to approach the Commission on case to case basis for these 16 Transmission Schemes. The Commission disposes of the Application of TPC in Case No. 112 of 2014 accordingly. Sd/- Sd/- Sd/- (Azeez M. Khan) (Vijay L. Sonavane) (Chandra Iyengar) Member Member Chairperson Case No. 112 of 2014 Page 18 of 33
Annexure I Transmission schemes approved under the Licence Existing Transmission Lines: 1. 220 kv Bhira-Dharavi 7 Transmission Line (106.90 km) from Bhira Receiving Station to Dharavi Receiving Station 2. 220 kv Bhira-Dharavi 8 Transmission Line (106.90 km) from Bhira Receiving Station to Dharavi Receiving Station 3. 220 kv Borivali-Aarey 1 Transmission Line (0.47 km) from Borivali Receiving Station to R-Infra Aarey Receiving Station 4. 220 kv Borivali-Aarey 2 Transmission Line (0.51 km) from Borivali Receiving Station to R-Infra Aarey Receiving Station 5. 220 kv Dharavi-Backbay Transmission Line (17.16 km) from Dharavi Receiving Station to Backbay Receiving Station 6. 220 kv Kalwa-Salsette 3 Transmission Line (7.77 km) from Kalwa Receiving Station to Salsette Receiving Station 7. 220 kv Kalwa-Salsette 4 Transmission Line (7.77 km) from Kalwa Receiving Station to Salsette Receiving Station 8. 220 kv Salsette-Borivali 1 Transmission Line (11.07 km) from Salsette Receiving Station to Borivali Receiving Station 9. 220 kv Salsette-Borivali 2 Transmission Line (11.07 km) from Salsette Receiving Station to Boriavli Receiving Station 10. 220 kv Tata Borivali-MSETCL Borivali 4 Transmission Line (1.70 km) from Borivali Receiving Station to MSETCL Borivali Receiving Station 11. 220 kv Tata Borivali-MSETCL Borivali 5 Transmission Line (1.57 km) from Borivali Receiving Station to MSETCL Borivali Receiving Station 12. 220 kv Trombay-Carnac 5 Transmission Line (12.39 km) from Trombay Receiving Station to Carnac Receiving Station 13. 220 kv Trombay-Carnac 6 Transmission Line (12.39 km) from Trombay Receiving Station to Carnac Receiving Station 14. 220 kv Trombay-Dharavi 5 Transmission Line (11.00 km) from Trombay Receiving Station to Dharavi Receiving Station 15. 220 kv Trombay-Dharavi 6 Transmission Line (11.00 km) from Trombay Receiving Station to Dharavi Receiving Station 16. 220 kv Trombay-MSETCL Tie 1 Transmission Line (0.85 km) from Trombay Receiving Station to MSETCL-Trombay Receiving Station 17. 220 kv Trombay-MSETCL Tie 2 Transmission Line (0.85 km) from Trombay Receiving Station to MSETCL-Trombay Receiving Station Case No. 112 of 2014 Page 19 of 33
18. 220 kv, 3 terminal line Trombay Salsette 1 Backbay Transmission Line (39.45 km) originating at Trombay Receiving Station and terminating at Salsette Receiving Station and Backbay Receiving Station 19. 220 kv Trombay-Dharavi 9 Transmission Line (10.69 km) from Trombay Receiving Station to Dharavi Receiving Station 20. 220 kv Saki-Sahar Transmission Line (2.60 km) from Saki Receiving Station to Sahar Receiving Station 21. 220 kv Kalwa-Salsette 6 Transmission Line (8.93 km) from MSETCL Kalwa Receiving Station to Salsette Receiving Station 22. Intermediate spare section of 220 kv Trombay Salsette#2 Transmission Line (14.23 km) from Pratiksha Nagar to Location 12 (Near Bhandup Village) kept charged from the Trombay Receiving Station 23. 220 kv Saki-Narayan Industrial Estate-Sahar Transmission Line (4.77 km) from Saki Receiving Station to Sahar Receiving Station 24. 110 kv Ambernath-Kalyan 1 Transmission Line (19.85 km) from Ambernath Receiving Station to Kalyan Receiving Station 25. 110 kv Ambernath-Kalyan 2 Transmission Line (19.85 km) from Ambernath Receiving Station to Kalyan Receiving Station 26. 110 kv BMC-Kolshet Transmission Line (18.97 km) from BMC Receiving Station to Kolshet Receiving Station 27. 110 kv Bhira-Davdi Transmission Line (10.13 km) from Bhira Receiving Station to Davdi Receiving Station 28. 110 kv Bhira-Khopoli 2 Transmission Line (50.96 km) from Bhira Receiving Station to Khopoli Receiving Station 29. 110 kv Bhivpuri-Ambernath 1 Transmission Line (46.48 km) from Bhivpuri Receiving Station to Ambernath Receiving Station 30. 110 kv Borivali-Malad 1 Transmission Line (7.40 km) from Borivali Receiving Station to Malad Receiving Station 31. 110 kv Borivali-Malad 2 Transmission Line (7.40 km) from Borivali Receiving Station to Malad Receiving Station 32. 110 kv Carnac-Backbay 1 Transmission Line (4.01 km) from Carnac Receiving Station to Backbay Receiving Station 33. 110 kv Carnac-Backbay 2 Transmission Line (4.00 km) from Carnac Receiving Station to Backbay Receiving Station 34. 110 kv Carnac-Grant Road Transmission Line (3.60 km) from Carnac Receiving Station to Grant Road Receiving Station Case No. 112 of 2014 Page 20 of 33