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2016 (11) TMI 1698 - AT - Indian LawsDisallowance of fuel cost for the period FY 2014-15 and FY 2015-16 - Whether the Appellant is entitled to claim the fuel costs incurred by it due to delay in execution of Fuel Supply Agreement (FSA) with Coal India Limited (CIL) and its subsidiaries for reasons not attributable to the Appellant in its tariff to Respondent No.2, with whom there is a valid, duly approved Power Purchase Agreement, in accordance with the applicable Tariff Regulations of State Commission? - HELD THAT:- This issue is answered in favour of the Appellant for allowing cost of coal for Unit-I limiting to the extent of what has been allowed/is being allowed by the State Commission for the corresponding period for the supply under FSA arrangement for the generation from Unit-II of the Appellant to Respondent No.2. Approval of Auxiliary Energy Consumption of 9.05% for FY 2014-15 in paragraphs 2.5.9 to 2.5.19 of the Impugned Order as against 9.61% as proposed by the Appellant - HELD THAT:- Considering the actual Auxiliary Energy Consumption as 9.61%, the availability for the year works out to be 85.40% which is more than the Target Availability and consequently, the Appellant is entitled for recovery of entire Annual Fixed Charges for FY 2014-15. The consequent computation of Availability in paragraph 2.3 of the Impugned Order of 84.83% as against 85.40% as proposed by the Appellant - HELD THAT:- The compensation as per IEGC amendments are described under Sub Regulation 6.3 B. Further as per Notification dated 6.4.2016, the IEGC fourth amendment Regulations shall come into force with effect from date of publication in Official Gazette except subregulation 6.3B which shall come into force on such date as the Commission may appoint by notification in the Official Gazette - Hence these Amendments related to APC have not come into effect. Hence the State Commission cannot allow such increase in Auxiliary Power Consumption due to part load compensation due to backing down instructions by SLDC. Consequent to this, there can be no change in the availability of the Power Station for the period FY 2014-15. This issue is decided against the Appellant. Approval of Gross Station Heat Rate of 2401 kcal/kwh as against 2457 kcal/kwh for FY 2014-15 as proposed by the Appellant - HELD THAT:- In view of the fact that the Appellant's Generating Station was in the 1st and 2nd year of operations after its Commercial Date and the Appellant had produced sufficient material before Respondent No.1 for exercise of such powers, is decided against the Appellant. Consideration of actual Interest on Working Capital (IWC) of ₹ 33.43 Crore for computing efficiency gain on the purported basis - HELD THAT:- Once having recognized that there is a requirement of funds to manage operations in business, it cannot be implied that the same has been met through operational efficiency as has been held by the State Commission in the Impugned Order. Interest on Working Capital - HELD THAT:- The State Commission had sought the month-wise cash flow statement from VIPLG to substantiate that the internal accruals were utilised to meet the working capital requirement. However, in the present matter, the Interest on Working Capital as per audited accounts was ₹ 33 Crore. Therefore, the State Commission considered ₹ 33 Crore as the actual Interest on Working Capital. Computation of Income Tax as proposed by the Appellant instead of restatement of the same based on the Impugned Order for the period F.Y. 2014-15 onwards - HELD THAT:- The State Commission has allowed the Income Tax for FY 2015-16 in accordance with the Regulation 34.1 of the MYT Regulations, 2011. The State Commission has considered the Income Tax for FY 2015-16 in the Impugned Order on provisional basis - Further the Regulation 34.2 of the MYT Regulation provides for the the reimbursement of difference between the actual and approved Income Tax at the time of final True –up. Therefore, the provisionally approved Income Tax for FY 2015-16 and the subsequent 3rd Control Period shall be subject to final truing up. Hence we are in agreement with the decision of the State Commission in this issue - the issue is decided against the Appellant. Disallowance of Ash Utilization and Disposal Expenses and the findings - HELD THAT:- The State Commission has not allowed the Ash disposal expenses on the ground of inappropriate design. The Ash disposal area is even not in accordance with the CEA guidelines. Therefore the Appellant was held fully responsible for this lapse and the impact of such disposal difficulties was not allowed to be passed on to the Beneficiaries - the impact of any such lapse in planning/ design of the Ash Utilization facilities should not be passed on to the Beneficiaries. Hence this issue is decided against the Appellant. Disallowance of Additional O&M expenses towards RO Plant - HELD THAT:- The State Commission in its Impugned Order has detailed out the issue related to additional O&M expenses for RO Plant as well as normative O&M expenses allowed in the Impugned Order - We have perused the findings of the State Commission and do not find any infirmity. Jurisdiction of the State Commission to order refund of the excess amount - HELD THAT:- As in the case of FY 2014-15, the State Commission directed the Appellant to refund the Revenue Surplus of FY 2015-16, determined as ₹ 405.89 crore upon provisional truing up, to Rlnfra-D in 6 monthly instalments. Whether Respondent No.1 has the power, authority or jurisdiction to pass an order of refund as has been done in the present case? - HELD THAT:- The Tariff can be determined by the State Commission with either upward revision resulting in increase in charges payable by the Consumer or have the downward revision with reduction in charges payable. Hence we decide this issue against the Appellant. Appeal allowed in part.
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