TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LIMITED vs Tamil Nadu Electricity Regulatory Commission & Ors on 9 October 2026

JUDGEMENT

PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON

1. The present Appeal has been filed by Tamil Nadu Generation and Distribution Corporation Limited under Section 111(1) of the Electricity Act,

2003 , challenging the Order dated 08.08.2024 passed by the Tamil Nadu Electricity Regulatory Commission in Review Petition No. 1 of 2023, whereby the State Commission allowed the Review Petition filed by Best Cotton Mills Private Limited (“Best Cotton Mills” or “Respondent No. 2”) and modified certain findings contained in its earlier Order dated 20.07.2023 passed in Miscellaneous Petition No. 2 of 2019 (“MP No. 2 of 2019”). Description of parties

2. The Appellant - Tamil Nadu Generation and Distribution Corporation Limited (“TANGEDCO”), is a company registered under the Companies Act, 1956, wholly owned by the Government of Tamil Nadu and is a distribution licensee under the Electricity Act, responsible for distribution of electricity to consumers in the State of Tamil Nadu.

3. Respondent No. 1 is the Tamil Nadu Electricity Regulatory Commission (hereinafter referred as “TNERC/State Commission”), a Regulatory Commission for the State of Tamil Nadu and exercising statutory functions and powers under Electricity Act.

4. Respondent Nos. 2 to 11, 13 to 18, 20 to 22 are High Tension consumers having HT service connections under various Electricity Distribution Circles of the Appellant. Respondent Nos. 12 and 19 are industrial associations representing HT consumers. The concerned consumers, apart from availing electricity from TANGEDCO, have also been procuring electricity through open access from captive generators and third-party sources, in terms of the applicable regulatory framework.

5. It is relevant to note that Tamil Nadu Electricity Board (“TNEB”) is the parent entity that was reorganized in 2010 into a holding company, TNEB Ltd.,

with two subsidiaries: TANTRANSCO (for transmission) and TANGEDCO (for generation and distribution). TANGEDCO is a successor company carved out of TNEB to handle power generation and distribution in Tamil Nadu. In the present Judgement, TNEB and TANGEDCO has been used interchangeably. Brief facts of the case : The case has a chequered history, and facts, which are found pertinent for disposal of the present Appeal, are enumerated below:

6. In the year 2008, owing to shortage of electricity in the Tamil Nadu State, Restriction and Control (“R&C”) measures were introduced for HT industrial and commercial consumers. Pursuant to the Government of Tamil Nadu instruction dated 22.10.2008, TANGEDCO implemented the R&C measures with effect from 01.11.2008 for HT industrial and commercial consumers. The consumers were subjected to a restriction of 40% on the base demand and energy. TANGEDCO thereafter approached the State Commission in M.P. No.42 of 2008 seeking approval of the R&C measures for power supply, including the methodology for levy of excess demand and energy charges.

7. By its memo dated 17.11.2008, TANGEDCO prescribed the methodology for fixing the demand and energy quota of HT captive consumers. The State Commission, by its Order dated 28.11.2008 in M.P. No.42 of 2008, approved the R&C scheme. TNERC vide its order dated 28.10.2009, in S.M.P. No.1 of 2009 held that the formula contained in Memo dated 17.11.2008 is only approved by the commission and stuck down other Memos issued by TNEB in between and also directed that all captive users are required to make advance declaration of the energy proposed to be procured from captive sources for the purpose of fixation of quota.

8. A clarification was issued by TANGEDCO on 25.06.2010 regarding adjustment of power procured from captive/third-party sources while determining the excess demand/energy consumption. The manner and effective date of implementation of the R&C methodology as per this clarification Memo became the subject matter of several proceedings before the State Commission and this Tribunal.

9. TNERC vide its order 28.12.2011 in M.P 32 of 2010 held that Clarification Memo dated 25.06.2010 is in order and it shall take effect from 25.06.2010. This Order of TNERC was assailed before this Tribunal especially regarding the methodology to be adopted during the period in which the advance declaration system was in operation vide Appeals Nos.51 and 56 of 2012. By Judgment dated 12.12.2012, this Tribunal held that the methodology in the clarification memo dated 25.06.2010 cannot be made applicable till Sept 2010, since till this period advance declaration of energy was in vogue and demand and energy quota fixed accordingly.

10. Consequent upon the aforesaid Judgment dated 12.12.2012, further proceedings were undertaken before the State Commission, including R.A. No.4 of 2013 and D.R.P. Nos.21 and 28 of 2011. The State Commission thereafter passed orders dated 25.02.2013 and 17.04.2013 respectively dealing with the implementation and determination of excess demand/energy charges in light of the earlier orders of the Commission and the judgments of this Tribunal.

11. The aforesaid determination was again carried in appeal before this Tribunal. By Judgment dated 29.05.2014 in Appeal No.177 of 2013 and the connected matters, this Tribunal considered the issue and upheld the order

dated 17.04.2013 passed by the State Commission. The matter was thereafter further considered by the State Commission in D.R.P. No.41 of 2014 by Order dated 13.02.2015.

12. The aforesaid proceedings ultimately travelled to the Hon’ble Supreme Court in connected Civil Appeals. The Hon’ble Supreme Court dismissed the said appeals on 25.10.2018, thereby bringing the earlier round of litigation concerning the R&C methodology and its effective date to a conclusion.

13. Thereafter, TANGEDCO filed M.P. No.2 of 2019 before the State Commission seeking clarification regarding the methodology to be followed for calculation of excess demand/energy charges, particularly in cases where HT consumers had procured electricity from captive/third-party sources, as well as regarding the applicability/effective date of the said methodology.

14. On 20.07.2023, State Commission passed the Order in M.P. No.2 of 2019 and held that while determining excess demand/energy charges, the equivalent demand/energy brought in by the consumer from captive sources was required to be adjusted and the excess was to be determined with reference to the balance demand/energy actually supplied by TANGEDCO, as against the applicable TNEB/TANGEDCO quota. The State Commission also distinguished its earlier Orders dated 14.03.2011 and 15.11.2011 on the ground that those orders related to cases where only the total quota had been communicated.

15. Aggrieved by certain findings contained in the Order dated 20.07.2023, particularly paragraphs 8.15(II)(vii), 8.15(II)(viii) and 8.16, Best Cotton Mills filed Review Petition No.1 of 2023 before the State Commission. The Review

Petition, inter alia, alleged that the Judgment dated 12.12.2012 passed by this Tribunal and the consequential proceedings had not been correctly appreciated while passing the Order dated 20.07.2023.

16. By the Impugned Order dated 08.08.2024, the State Commission held that the clarification dated 25.06.2010 would not govern the period during which the advance declaration mechanism was in force and as held by this Tribunal in the Judgement dated 12.12.2012, up to September 2010, the demand and energy quota communicated on the basis of advance declaration would govern the computation of excess demand and energy charges. The methodology based on actual energy consumed/adjusted was held applicable from 01.10.2010 and deleted some paragraphs from the original order dated 20.07.2023.

17. Aggrieved by the Impugned Order dated 08.08.2024, the Appellant has preferred the present Appeal, raising issues concerning the exercise of review jurisdiction, interpretation of the Judgment dated 12.12.2012 passed by this Tribunal, and the methodology for determination of excess demand and energy charges. Submissions urged on behalf of Appellant

18. Learned counsel on behalf of the Appellant submits that the Impugned Order dated 08.08.2024, passed by the State Commission in Review Petition No.1 of 2023, proceeds on the premise that the Original Order dated 20.07.2023 passed in M.P. No.2 of 2019 suffered from an error apparent on the face of the record on account of the alleged non-consideration of paragraph 34 of the judgment dated 12.12.2012 passed by this Tribunal in Appeal Nos.51

and 56 of 2012. It is submitted that the said premise is ex facie erroneous. as the Original Order had considered the aforesaid judgment in detail and had specifically extracted and dealt with paragraph 34 thereof.

19. It is submitted that the Original Order dated 20.07.2023 passed in M.P. No.2 of 2019 correctly and fully implements the judgment dated 12.12.2012 of this Tribunal in Appeal Nos.51 and 56 of 2012, inasmuch as sub-para (vi) of paragraph 8.15(II) expressly provides that the demand and energy quota is to be fixed on the basis of the energy proposed or declared for captive use and that such quota is to be taken for computation of excess demand and excess energy charges, while sub-paras (vii) and (viii) prescribe the manner of determining whether the actual energy drawn from the Appellant exceeded the quota so fixed. It is submitted that this distinction is also logical, since, while the advance declaration may form the basis for fixation of the quota, the question whether the consumer has actually exceeded the quota can only be determined with reference to the actual consumption from the Appellant, for which the actual consumption from the captive source in the relevant month is required to be deducted from the total actual consumption. Learned counsel further submits that, despite the aforesaid position, the State Commission, without assigning any cogent reason, has re-appreciated the same judgment while exercising review jurisdiction and deleted paragraphs 8.15(II)(vii) and

(viii) of the Original Order being not in consonance with the judgment of this Tribunal, while introducing a modified paragraph 8.15(II)(vii) rather than identifying any error apparent on the face of the record warranting exercise of review jurisdiction. In fact paragraphs (vii) and (viii) deal with the determination of excess demand and excess energy charges and not with the fixation of quota, which was the subject matter of the said judgment.

20. It is further submitted that, for working out the quota as well as the excess demand and energy charges during the Second Part, the Appellant had issued the circular dated 25.11.2009, which provided that factor ‘B’, representing the CPP energy for the purpose of quota fixation, was to be determined on the basis of advance declaration, and further clarified that excess energy charges would become payable where the recorded energy, after deducting the energy actually supplied by the CPP, exceeded the quota ‘D’ fixed for the power that could be consumed from the Appellant. Learned counsel submits that this methodology was subsequently affirmed in the orders of the State Commission and this Tribunal, inasmuch as the TNERC, by order dated 07.09.2010 in M.P. No.39 of 2010, did not interfere with the aforesaid circular despite the same having been specifically challenged, while paragraph 4.5 of the TNERC order dated 07.09.2010 in M.P. No.6 of 2010 and batch recognised that energy purchased from captive and third-party sources was to be deducted from the total energy consumed and the balance was to be treated as energy actually supplied by TNEB for determining whether the energy quota had been exceeded. This Tribunal, in its judgment dated 31.10.2012 in Appeal No.36 of 2012 and connected matters, also recognised the distinction between the levy of excess demand and energy charges and the requirement of advance declaration while considering the effective date of the TNERC order dated 07.09.2010. Pursuant thereto, the TNERC, by order dated 25.02.2013 in R.A. No.4 of 2013, determined the effective date in respect of procurement through open access. According to the learned Counsel, these decisions reaffirm the methodology adopted by the Appellant for determining excess consumption and support the approach incorporated in the Original Order.

21. In certain cases where consumers were communicated only the overall quota, i.e. B+D, without separately specifying the TNEB quota, this Tribunal, in its judgment dated 29.05.2014 in Appeal No.177 of 2013, held that the total

quota so communicated would form the basis for determining excess consumption, which decision was not interfered with by the Hon’ble Supreme Court vide its order dated 25.10.2018. However, the said issue is not germane to the present Appeal, as the Impugned Order does not deal with the same. It is pointed out that the Original Order had separately considered this aspect in paragraph 8.16 and directed that, where the quota had been communicated to the captive consumer in total, without separately showing the Appellant and captive portions in terms of the Memo dated 17.11.2008, such total quota alone would be taken into account for computation of excess demand and excess energy charges, and such finding of the Original Order has not been modified or disturbed by the Impugned Order. Submissions urged on behalf of Respondent No. 19

22. Learned Senior Counsel for the Respondent submitted that by Memo dated 17.11.2008, the Appellant prescribed the methodology for computation of demand and energy quota for HT consumers partially availing power from captive power plants, under which factors ‘B’ and ‘F’, representing the captive energy and corresponding demand, respectively, were to be determined on the basis of the actual energy supplied by the captive users, with ‘B’ representing the actual energy supplied by the CPP, calculated on the basis of the monthly average of the aforesaid three-month period, whereas ‘F’ represented the demand derived by applying the formula: actual energy supplied by the CPP in a month/ number of days in the month × 24 hours × P.F. (0.95).

23. The State Commission, vide its order dated 28.10.2009, directed that, with effect from 01.11.2009, the base demand and base energy would continue to be determined in accordance with the formula prescribed by the Appellant in its Memo dated 01.11.2008, however all captive users, whether thermal or

wind, were required to declare on the first day of every month the energy proposed to be utilised for captive consumption during the succeeding month, which declaration was to be taken as ‘B’ and ‘F’ for the purpose of determining the energy quota and demand quota, respectively, in terms of the Appellant’s Memo dated 17.11.2008, the declared energy being approximately equivalent to the monthly average generation. Pursuant thereto, from 01.11.2009, the captive users have been making advance declarations of the energy proposed to be utilised for captive consumption for the succeeding month, on the basis of which the concerned SEs of the respective circles have been issuing monthly quota letters determining the total energy quota (B now proposed + D) and demand quota (E now proposed + H). The captive users have, accordingly, restricted their energy and demand consumption within the respective total energy and demand quotas so fixed.

24. During the operation of the advance declaration mechanism, the Appellant, without the approval of the State Commission, issued a clarification memo dated 25.06.2010, seeking to interpret “actual energy supplied” under the Memo dated 17.11.2008 as “actual energy adjusted”, thereby restricting the deemed/equivalent demand ‘F’ to the units actually adjusted rather than energy supplied to the grid. This resulted in field-level officers retrospectively revising the demand quota ‘F’ already communicated to captive users and levying excess demand charges. The position was thereafter clarified by the TNERC in its order dated 07.09.2010 in M.P. No. 6 of 2010, which dispensed with the requirement of advance declaration and, in Para 4.5, clarified that the equivalent demand brought in by a consumer from captive and third-party sources was to be deducted from the consumer’s maximum recorded demand, with the balance constituting the demand actually supplied by the Electricity Board; only where such balance exceeded the applicable demand quota would excess demand charges become payable. Thus, the procedure for

determination of the demand actually supplied by the Electricity Board and the consequential liability for excess demand charges was expressly clarified only by the order dated 07.09.2010.

25. This Tribunal, vide its judgment dated 12.12.2012, held that the Appellant’s clarification dated 25.06.2010 and the revised formula prescribed in Para 4.4 of the TNERC order dated 07.09.2010 could not be applied retrospectively for the period prior to September 2010, when the mechanism of advance declaration by captive consumers was in force. It was further held that, up to September 2010, the demand and energy quotas duly communicated to the consumers by the Electricity Board on the basis of their advance declarations would govern the computation of any excess demand or energy charges. The Tribunal accordingly directed that, with effect from 01.10.2010, the computation of equivalent demand would be undertaken on the basis of the energy actually consumed/adjusted from the CPP, in terms of the order dated 07.09.2010 read with the Memo dated 17.11.2008. Pursuant to and in implementation of the aforesaid findings and directions of this Tribunal, the 1st Respondent issued an implementation order dated 29.01.2013.

26. This Tribunal, vide its detailed judgment dated 29.05.2014 in Appeal No. 177 of 2013, reconfirmed the order passed in Appeal Nos. 51 and 56 of 2012 and held that the demand and energy quota communicated by the Electricity Board in advance, based on the advance declaration of energy proposed to be made available from captive generation, would form the basis for calculation of excess demand and energy charges until implementation of the new procedure, as decided by the State Commission vide order dated 07.09.2010, dispensing with the requirement of advance declaration by the captive consumer. Accordingly, for the second period, i.e., from November 2009 to September 2010, the total demand and energy quota communicated by the

Electricity Board/the Appellant on the basis of the advance declaration of energy proposed to be made available from captive generation was held to be the basis for calculation of excess demand and energy charges. The Appellant challenged the said judgment before the Hon’ble Supreme Court in C.A. No. 8214 of 2015, which came to be dismissed vide order dated 25.10.2018. In view thereof, the State Commission rightly reviewed Para 8.15 II (vii) and (viii) of the main order dated 20.07.2023 in conformity with the binding precedent laid down by this Tribunal in Appeal Nos. 51 and 56 of 2012 dated 12.12.2012, and consequently deleted Para 8.16 in terms of the judgment of this Tribunal in Appeal No. 177 of 2013 dated 29.05.2014 and the order of the Hon’ble Supreme Court in C.A. No. 8214 of 2015 dated 25.10.2018. DISCUSSION AND ANALYSIS

27. We have heard Ms. Anusha Nagarajan, Learned Counsel appearing for the Appellant and Mr. M.G. Ramachandran, Learned Senior Counsel appearing for the Respondents. Elaborate submissions have been made by Appellant and Respondents. We have perused written submissions filed by the parties as well as Impugned Order dated 08.08.2024, the Original Order dated 20.07.2023, and other judgments referred by the parties and other documents on record.

28. At the threshold, it is apposite to reiterate the settled proposition that the jurisdiction of review is a narrow one. A review is not an appeal in disguise; it cannot be invoked to re-argue or re-appreciate matters already adjudicated. The permissible grounds are confined to correction of errors apparent on the face of the record, discovery of new and important matter which could not be produced earlier despite due diligence, or analogous grounds recognized

under Order XLVII Rule 1 of the Code of Civil Procedure, read with Section 94(1)(f) of the Electricity Act, 2003.

29. The main grievance of the Appellant is that TNERC, in the Impugned Order dated 08.08.2024, has proceeded on the premise that the Original Order dated 20.07.2023 passed in M.P. No.2 of 2019 suffered from an error apparent on the face of the record and has deleted the paragraph 8.15 (II), (vii) and (viii) and 8.16 of the said order, being contrary and in non-consideration of the judgement rendered by this Tribunal dated 12.12.2012 in Appeal No 51 & 56 of 2012. It has been contended by the learned counsel for the Appellant that in the original order dated 20.07.2023, the judgement dated 12.12.2012 has been considered in detail and TNERC in the Impugned Order has essentially re- appreciated the Tribunal judgement dated 12.12.2012, which is impermissible in review. It is further submitted that by deleting the sub-paras vii and viii, the methodology for arriving the excess demand and excess energy charges has been left completely unaddressed.

30. Per contra, the Respondents contend that the Tribunal’s judgment dated 12.12.2012 was not properly applied in the Original Order, and that the Impugned Order merely corrects an error apparent on the face of the record. It is their submission that the directions of this Tribunal were binding, and any deviation therefrom required rectification in review to ensure conformity with binding precedent.

31. The controversy thus crystallizes into a singular issue: whether the Original Order dated 20.07.2023 had considered and rightly applied the Tribunal’s judgment dated 12.12.2012, and whether the directions contained in

the order is contrary to the Tribunal Judgement dated 12.12.2012, thereby, necessitating correction in review.

32. Before deliberating the issue, we take note that in the original order dated 20.07.2023, the whole R&C period was categorized into three parts in the matter of calculation of excess charges; i) First Part, from the month 12/2008 to 10/2009 ii) Second part from the month 11/2009 to 08/2010 iii) Third Part from the month of 09/2010 onwards

33. The Impugned Order pertains to the period falling within second part i.e. 11/2009 to 08/2010, when the advance declaration of energy by captive consumers was in vogue and demand and energy quota were issued to captive users, based on such declaration in terms of the order of TNERC order dated 28.10.2009. Accordingly, in the present judgement, we are concerned only with the second part.

34. Resolution of the issue in the present Appeal requires a careful juxtaposition of (i) the Impugned Order dated 08.08.2024. (ii) the Original Order dated 20.07.2023, and (iii) the Tribunal’s judgment dated 12.12.2012, and various Memo issued by TNEB and other orders and are deliberated in following paragraphs : TNERC Order dated 08.08.2024 (Impugned Order)

35. The State Commission, in this order has framed following issues for consideration in the review petition.

“5. The points for determination that arise in the present review petition are as follows:

Whether there exists an error apparent on the face of record to paragraph 8.15 (II) (vii) and (viii) and 8.16 of the order dated 20.07.2023 passed by this Commission in M.P. No.2 of 2019 as contended by the Review Petitioner?

Whether exercise of jurisdiction conferred upon this Commission u/s 94(f) of the Electricity Act 2003 read with Regulation 43(1) of TNERC (Conduct of Business) Regulations 2004 is warranted in the present case?

To what extent the order dated 20.07.2023 require modification?”

36. Under issue No 1, TNERC, after extracting the contents of this Tribunal Judgment dated 12.12.2012 and taking note that the said judgement had attained finality as it has not been challenged by any the parties, observed that this Tribunal has directed that TANGEDCO can resort to the calculation of demand and energy quota, based on actual energy consumed/adjusted by the captive users in the same month from 01.10.2010. The Tribunal in the Judgement dated 12.12.2012, had observed that procedure of advance declaration of energy was in vogue as per order dated 28.10.2009 and it was modified only by the order dated 07.09.2010 and accordingly till September 2010, the demand and energy quota as communicated to the consumers by the electricity Board based on the advance declaration of energy by consumers, will have an effect on the calculation of excess demand and energy. In paragraph 6.9 of the Impugned Order, TNERC held as under : “6.9) Based on the above discussions, this Commission has to necessarily hold that Paragraphs 8.15 (II) (vii) & (viii) of the order dated 20.07.2023 passed by this Commission clarifying that the TANGEDCO can arrive at the excess demand & energy charges on captive consumers, by calculating monthly equivalent demand, based on the energy adjusted/consumed during the second part of the months from 11/2009 to 08/2010 i.e., prior to 01.10.2010, is not only contrary but also non-

consideration of the Judgment rendered by the Hon'ble APTEL dated 12.12.2012 in Appeal No.51 & 56 of 2012. As rightly pointed out by the Review Petitioner, the implementation order dated 29.10.2013 in R.A.No.2 of 2013 was completely lost sight of by this Commission while passing the order dated 20.07.2023 in M.P.No.2 of 2019. As the intention and true purport of the judgment rendered by Hon'ble APTEL in the order dated 12.12.2012 and the consequential implementation order dated 29.10.2013 in R.A.No.2 of 2013, is proved to have been lost sight of by the Commission while passing the order dated 20.07.2023 in M.P.No.2 of 2019, the same tantamount to an error apparent on the face of record, as contended by the Review Petitioner Paragraph 8.16 of the impugned order came to be passed in the light of the order passed in para 8.15 (II) (vii) and (viii). Hence the conclusion that an apparent error on face of record exists in respect of para 8.16 also is inevitable. Hence this Commission decides that there exists an error apparent on the face of record in regard to paragraph 8.15 (II) (vi) and (viii) and 8.16 of the order dated 20.07.2023 passed by this Commission in M.P. No.2 of 2019. Accordingly, this point is determined.”

37. Under Issue No 2, TNERC observed that, in order to prevent miscarriage of justice, the exercise of jurisdiction conferred upon the commission in terms of Section 94(f) of the Electricity Act and Regulation 43(1) of TNERC (Conduct of Business) Regulations, 2004, is warranted. Accordingly, TNERC decided to make the following modification, as extracted hereunder: “9) In the result the Review Petition is allowed. Paragraph 8.15 (II) (vii) and (viii) and 8.16 of the order dated 20.07.2023 passed by this Commission in M.P. No.2 of 2019 is reviewed and modified as hereunder.

(a) "Para 8.15(II) (vii) The clarification dated 25.06.2010 issued by the 1st Respondent CFC/TANGEDCO cannot be applied during the Second Part of the months from 11/2009 to 09/2010 when the procedure of advance declaration of energy by the captive consumer as per the order of this Commission in S.M.P.No.1 of 2009 dated 28.10.2009 was in vogue. As held by the Hon'ble APTEL in the Judgement dated 12.12.2012 in Appeal No.51 & 56 of 2012, till September 2010, the demand and energy quota, as communicated to the consumers by the Electricity Board based on the advance declaration of energy by the consumers, will have the effect for calculation of excess demand and energy charges. Further, with effect from 01.10.2010, TANGEDCO shall resort to

levying excess demand and energy quota on captive users based on the energy actually consumed/adjusted in consonance with the memo dated 17.11.2008 and para 4.5 of the Commission order dated 07.09.2010 as held by the Hon'ble APTEL in Appeal No.51 & 56 of 2012 dated 12.12.2012 and the consequential Implementation order dated 29.10.2013 in R.A. No. 2 of 2013.

(b) Para 8.15(II) (vii) and (viii) and 8.16 in the original order shall stand deleted.”

38. It is also apposite to refer to the TNEB/TANGEDCO Memo dated 17.11.2008, with regard to calculation of Energy quota and demand quota during the period of R&C, as well as time period for applicability for such determination in terms of these Memos. TNEB/TANGEDCO memo dated 17.11.2008

39. The memo stipulates the fixing of demand and energy quota for HT consumers partially using power from CPP and following methodology and consequences of violating the demand and energy quota is also stipulated. The methodology stated in the memo is extracted as under: “The SEs of concerned EDC may fix demand and energy quota for HT Consumers partially using power from CPPs as stated below: - Fixing of Energy quota: -

(i) Monthly base energy consumption as illustrated in working instructions dated 1.11.2008. } } A

(ii) In that the actual energy supplied (monthly average) for the above three months average by the CPP } } } B

(iii) The actual energy availed by consumer from TNEB } } A – B = C

(iv) 60% energy on C (C x 60/100) = D

(v) The quota fixed for energy = B + D Fixing of Demand quota: -

(i) The base demand consumption as illustrated in working instructions dated 1.11.2008. } } E

(ii) In that the calculated demand supplied for the Energy for the month by CPP } } F F = Energy supplied by CPP in a month -------------------------------------------------------------- No. of days in the month x 24 hours x P.F 0.95

(iii) The actual demand availed by consumer from TNEB } } E – F = G

(iv) 60% demand of G (G x 60/100) = H

(v) The demand quota fixed = F + H (Calculation of demand supplied by generator may be worked out on par with calculation made for wheeling of power to the captive consumers as communicated in CE/PPP memo. dated 6.11.2007 and subsequent amendment thereof). The Superintending Engineers/Electricity Distribution Circle should get a letter from the CPP for each HT service connection they intend to supply power before fixing quota. The SEs of the circle where the generator unit is available will arrange to take a check reading on every Saturday slot wise and the details of energy actually sent out and shared by various industries who have wheeled energy from the generator should be communicated to the SEs concerned where the HT service are available by every Monday. The SE of the circle where the HT Service availing the wheeled energy, is situated will check the actual consumption with respect to the total quota fixed and take appropriate action. At the time of every weekly check/monthly reading the concerned SEs should closely watch the demand and energy used by the consumer and compare it with the deemed demand and energy supplied by the generators. If there is any violation of the demand quota and energy as determined above, then the excess demand charges may be collected for the excess energy used from TNEB Grid at the rate to be specified by TNERC.”

40. It is evident that in terms of Memo dated 17.11.2008, the total quota fixed for energy (B+D) consisted of actual energy supplied by CPP in three months plus 60 % of actual energy availed by the consumer from TNEB, by subtracting energy supplied by CPP from monthly base energy consumption. Likewise, the demand quota (F+H) was also determined. And only if there is any violation of the demand quota and energy as determined in the Memo, the excess demand charges were to be collected for the excess energy used from TNEB. TNERC order dated 28.10.2009

41. We take note that the State Commission, by Order dated 28.11.2008 in M.P. No.42 of 2008, approved the R&C measures being enforced by TNEB since 01.11.2008 and approved the basis for computation of demand and energy quota for wind energy generators as per the formula contained in Memo dated 17.11.2008.

42. However, subsequently in its order dated 28.10.2009, in S.M.P. No.1 of 2009 TNERC observed that TNEB has tempered with the formula on its own through its Memos dated 19.12.2008, 04.08.2009 and 21.08.2009, which were stuck down by the TNERC holding that the formula contained in Memo dated 17.11.2008 is only approved by the commission. It was also held in this order that all captive users are required to make advance declaration of the energy proposed to be procured from captive sources for the purpose of fixation of quota as extracted hereunder: “(13) From 1-11-2009, all captive users, whether thermal or wind, shall declare on the first day of every month, the energy proposed for captive use for the following month, which shall be considered as B and F for the purpose of energy quota and demand quota respectively in terms of the memo of TNEB dated 17-11-2008; the energy so declared shall roughly be the monthly average generation.”

43. In terms of this order, the average consumption of energy in the formula contained in Memo dated 17.11.2008 was substituted with advance declaration of energy for the following month for the purpose of working out the energy quota and demand quota. There were some other dispensations with regard to utilization of banked energy which is not a matter of dispute in the present Appeal. In terms of this order, TNEB issued a memo dated 25.11.2009, which stated the methodology for calculation of demand and energy quota for various periods, including with effect from 01.11.2009 onwards, the period under dispute in present Appeal. Under the said memo also, the total demand and quota worked out included the component of advance declaration of energy for captive use and percentage of energy to be used from TNEB.

44. A petition (M.P. No 39 of 2010) filed against the said Memo issued by TNEB was, however, dismissed by TNERC in limine vide its order dated 07.09.2010. TNERC Order dated 07.09.2010 (M.P No 6,9, 17 of 2010 & DRP No 09 of

45. TNERC, vide this order dispensed the need for advance declaration of the consumer for procurement of power through open access. Further the order enabled a consumer to consume power up to sanctioned demand including TNEB quota demand and procurement of power from captive sources and third party sources. TNERC Order dated 28.12.2011 (in M.P No 32, 41 of 2010)

46. TNEB issued a clarification letter dated 25.06.2010, vide which it was stated that actual energy supplied in the Memo dated 17.11.2008 to mean

actual energy adjusted. Indian Wind Power Association and the Southern India Mills Association, vide above referred M.Ps approached TNERC to contend that the clarification letter 25.06.2010 issued by TNEB amount to will full violation of earlier orders of TNERC approving the formula contained in Memo dated 17.11.2008. TNERC, came to the conclusion that the memo dated 17.11.2008 stipulated the monthly base energy consumption as (A)and energy supplied by the captive generator is termed as B and since A is measured against consumption, B should also be measured against consumption and therefore held that the Clarification letter dated 25.06.2010 is in order and approved its applicability from 25.06.2010.

47. However, at the same time, while approving the said clarification, TNERC observed that TNEB has usurped the authority of the commission in clarifying a matter from the previous orders of the commission and also proceeded to initiate action against the concerned department of TNEB under section 142 of Electricity Act, 2003. Tribunal Judgment dated 12.12.2012 (in Appeal No 51 and 56 of 2012)

48. Indian wind power Association and Southern India Mills association filed Appeals against the TNERC order dated 28.12.2011. This Tribunal in its judgement dated 12.12.2012 set aside the applicability of the clarification letter dated from 25.06.2010 as considered in the order dated 28.12.2011, observing that procedure of advance declaration of the energy by the consumer and communication of demand and energy quota as per order dated 28.10.2009 was still in vogue and same was modified only by order dated 07.09.2010, the demand and energy quota based on advance declaration shall be applicable till September 2010. Thereafter, from 01.10.2010, the method of calculating the

equivalent demand on the basis of energy from wind energy generator actually consumed or adjusted from the wind energy generator shall take effect. Relevant paragraph of this Tribunal Judgement is extracted here under: “ 39. Summary of Findings ………..

iii) However, once the system of advance declaration was dispensed with by the order dated 07.09.2010, the memo dated 17.11.2008 in original form as interpreted in this judgment as read with the order dated 07.09.2010 shall take effect.

iv) Thus, it has to be held that the State Commission was not correct in holding that the clarification will take effect from 25.06.2010 because the procedure of advance declaration of energy by the consumer and communication of demand and energy quota as per the order dated 28.10.2009 was still in vogue and the same was modified only by the order dated 07.09.2010. Thus till September, 2010, the demand and energy quota as communicated to the consumers by the Electricity Board based on the advance declaration of energy by the consumers will have effect for calculation of excess demand and energy charges. Thereafter, from 01.10.2010, the method of calculating the equivalent demand on the basis of energy from wind energy generator actually consumed or adjusted in consonance with the order dated 07.09.2010 read with order dated 17.11.2008 shall take effect.”

49. It is evident that the methodology for calculation of quota based on actual energy consumed in terms of clarification memo dated 25.06.2010 is to be made applicable from 01.10.2010 and prior to that date i.e upto September 2010, which is also the matter of dispute in the present Appeal, earlier approved methodology of calculation of demand and energy quota, based on advance declaration of energy and charges for excess consumption to be worked out accordingly.

50. In this backdrop, it is important to note the contents of TNERC Original Order dated 20.07.2023, in which review order dated 08.08.2024 has been passed, which is impugned in the present Appeal. TNERC Original Order Dated 20.07.2023

51. This order came to be passed in a miscellaneous petition filed by TANGEDCO with regard to methodology for calculation of excess demand and excess energy consumed by a HT consumer who are partially using TANGEDCO power by way of adjusting captive /third party and the date from which TNERC order dated 07.09.2010 is required to be implemented for both captive and third party users in connection with calculation of excess demand. In this order, following three periods were considered and dispute in the present appeal pertains to only second part.

1. First Part = 12/2008 to 10/2009

2. Second Part = 11/2009 to 08/2010

3. Third Part = 09/2010 onwards

52. Under the findings for second part (from the month 11/2009 to 08/2010), TNERC recorded the following findings: “8.15

II. Second part From the month of 11/2009 to 08/2010:

(i) From 01.11.2009 the base demand and base energy should continue to be fixed with reference to the formula laid down by TNEB in their OM dated 01.11.2008

(ii) In respect of captive consumers, the demand and energy quota is fixed in accordance with the formula contained dated 17.11.2008 by duly complying the order dated 28.10.2009 in S.M.P No. 1 of 2009.

(iii) From 01.11.2009, all captive users, whether thermal or wind should declare on the first day of every month, the energy proposed for captive use for the following month, which shall be considered as B and F for the purpose of energy and demand quota respectively in terms of the memo of TANGEDCO OM dated 17.11.2008, the energy so declared shall roughly be the monthly average generation.

(iv) The ceiling limits upto which a open access HT consumer could utilize power including the TANGEDCO quota demand, captive power and third party purchase would be the sanctioned demand.

(v) In respect of third party open access HT consumers, the demand and energy quota should be fixed at par with normal HT consumers and need not to be refixed in accordance with OM dated 17.11.2008, since, the method of fixation was laid down in the said memo should be applicable only for Captive users of HT consumers.

(vi) In this connection, the demand and energy quota should be fixed based the energy proposed for captive use (proposed/declared energy) and such quota should be taken for computation of excess demand and excess energy charges.

(vii) The monthly equivalent demand for the adjusted units (including units drawn from banking) by the captive /third party open access consumer should be subtracted from the highest recorded demand in respective month. Balance would be the demand actually supplied by the TANGEDCO. If this figure exceeds the demand quota fixed for TANGEDCO’s power, the consumer would be liable to pay excess demand charges.

(viii) Similarly, the energy adjusted by the captive/third party open access would be subtracted from the total energy consumed by the open access HT consumer in respective month from TANGEDCO. Balance would be the energy actually supplied by the TANGEDCO. If this figure exceeds energy quota fixed in respective month for the TANGEDCO’s power, the consumer would be liable to pay excess energy charges. ……….

8.16. Further, it is ordered that if TANGEDCO, in their letter captive consumer, had communicated the quota in total, i.e. shown without splitting of the quota of TANGEDCO’s part and captive consumer’s part in accordance with the OM dated 17.11.2008, said quota in total alone shall

be taken for calculation of excess demand charges, and excess energy charges.”

53. As already noted above, the detailed methodology for calculation of demand and energy quota and calculation/ charges for excess energy utilization are explained in the Memo dated 17.11.2008 and with regard to clarification memo dated 25.06.2010, in which working of B was substituted by actual energy consumed instead of advance declaration/ supplied has been directed to be made applicable from 01.10.2010 by this Tribunal in its judgement dated 12.12.2012.

54. It is pertinent to note that this Tribunal in its judgement dated 29.05.2014 in Appeal No. 177 of 2013, reaffirmed the order dated 12.12.2012 passed in Appeal Nos. 51 and 56 of 2012 and held that the demand and energy quota communicated by the Electricity Board in advance, based on the advance declaration of energy proposed to be made available from captive generation, would form the basis for calculation of excess demand and energy charges until implementation of the new procedure, as decided by the State Commission vide order dated 07.09.2010, dispensing with the requirement of advance declaration by the captive consumer. The challenge to the said judgment before the Hon’ble Supreme Court in C.A. No. 8214 of 2015 by Appellant herein, was dismissed vide order dated 25.10.2018, which further corroborates the finality of the directions contained in order dated 12.12.2012 of this Tribunal.

55. In the Original Order dated 20.07.2023, findings recorded at points

(i) ,(ii),(iii) affirms the methodology for calculation of demand and Energy quota in terms of Memo dated 17.11.2008, based on advance declaration of energy proposed to be used by the captive consumer in the following month. However

paragraphs 8.15(II)(vii) and (viii) prescribed a methodology for determining excess demand and excess energy charges, in which the monthly equivalent demand corresponding to the adjusted units was required to be deducted from the highest recorded demand, and the balance to be treated as the demand actually supplied by TANGEDCO. Similarly, the energy adjusted through captive/third-party sources was required to be deducted from the total energy consumed, with the balance being treated as the energy actually supplied by TANGEDCO. If such balance exceeded the applicable TANGEDCO demand or energy quota, the consumer is liable to pay for excess demand or excess energy charges. Thus, although paragraph 8.15(vi) proceeded on the basis of the advance declaration for fixation of the quota, paragraphs 8.15(II)(vii) and

(viii) introduced, for the purpose of determining excess charges, the actual energy adjusted/consumed during the relevant month as the basis for such computation. This distinction is material.

56. As already noted above, TNERC in its order dated 28.12.2011 came to the conclusion that the memo dated 17.11.2008 stipulated the monthly base energy consumption as (A) and energy supplied by the captive generator is termed as B and since A is measured against consumption, B should also be measured against consumption and therefore the Clarification letter dated 25.06.2010 is in order and approved its applicability from 25.06.2010. However, applicability of Clarification dated 25.06.2010 was made applicable from 01.10.2010, in terms of this Tribunal order dated 12.12.2012 making it clear that for the period from November 2009 to September 2010 the demand and energy quota communicated to the consumers on the basis of their advance declaration shall form the basis for computation of excess demand and energy charges. The methodology contained in paragraphs 8.15(II)(vii) and (viii), by requiring the actual adjusted/consumed energy to be taken into account for

determining the balance energy or demand supplied by TANGEDCO, effectively brings into operation the methodology for the period under dispute, which this Tribunal had held to be applicable only from 01.10.2010.

57. Appellant, has also contended that in the Original Order dated 20.07.2023, where consumers were communicated only the overall quota, i.e. B+D, without separately specifying the TNEB quota, such overall quota alone would be taken into account for computation of excess demand and excess energy charges, and such finding of the Original Order has not been modified or disturbed by the Impugned Order. However, we do not find merit in these submissions, as this Tribunal, in its judgement dated 12.12.2012, has not distinguished whether consumers were communicated overall quota or separate quota, and made the Methodology contained in the Memo dated 17.11.2008 applicable for the period under dispute. It is already noted in preceding paragraphs that in terms of Memo dated 17.11.2008, the quota fixed for energy and demand consists of two components i.e B+D & F+H respectively. Thus, we find that direction contained in paragraph 8.15 II (vii) &

(viii) , 8.16 of Original Order dated 20.07.2023 is not in conformity with this Tribunal Judgement dated 12.12.2012.

58. Learned counsel on behalf of Appellant has placed reliance on the orders dated 07.09.2010 in M.P. No.39 of 2010, and M.P. No. 6 of 2010, which did not interfere with the circular dated 25.11.2009 issued by TNEB and recognised that the energy purchased from captive and third-party sources was to be deducted from the total energy consumed and the balance was to be treated as energy actually supplied by TNEB for determining whether the energy quota had been exceeded. We do not feel it necessary to deliberate each and every order of the TNERC, as these are not a subject matter of

present Appeal, the issue in the present Appeal is confined whether the Original Order dated 20.07.2023 is in conformity with this Tribunal order dated 12.12.2012 or not, which has already been deliberated in the previous paragraphs.

59. We therefore find that, the State Commission, in the Impugned Order has rightly observed that direction under paragraph 8.15 (II) (vii) and (viii) and 8.16 under original Order dated 20.07.2023 tentamounts to an error apparent on the fact of record as the same is contrary to the findings of this Tribunal in judgement dated 12.12.2012. The error was therefore apparent on the face of the record, warranting exercise of the review jurisdiction by the State Commission. Accordingly, paragraphs 8.15 (II) (vii), (viii) and 8.16 have been rightly deleted from the order dated 20.07.2023 vide Impugned Order dated 08.08.2024.

60. In view of the foregoing discussion, we find no ground to interfere with the Impugned Order dated 08.08.2024 passed by the State Commission in R.P. No.1 of 2023. The Appeal is, accordingly, dismissed. Pending IAs, if any, stand disposed of. PRONOUNCED IN THE OPEN COURT ON THIS 09th DAY OF OCTOBER, 2026. (Virender Bhat) Judicial Member (Seema Gupta) Officiating Chairperson REPORTABLE / NON-REPORTABLE Pr/ag/ak