APTEL Overturns CERC's Order in Greenko Budhil Hydro Power Dispute

The Appellate Tribunal for Electricity (APTEL) has quashed the Central Electricity Regulatory Commission (CERC) review order from 2019, absolving Greenko Budhil Hydro Power Pvt. Ltd. of liability for additional transmission charges.

The dispute stemmed from a tripartite agreement concerning transmission infrastructure built by Central Transmission Utility of India Ltd. (CTUIL) (formerly Power Grid Corporation of India Ltd.) for the evacuation of power from Greenko’s 70 MW hydroelectric plant in Himachal Pradesh.

The core issue revolved around transmission charges for a line connecting Greenko’s plant to CTUIL’s pooling station. The appellant, Greenko Budhil Hydro Power, was engaged in a 2007 BPTA (Bulk Power Transmission Agreement) with CTUIL and PTC India Ltd., requiring the company to construct a transmission line up to the pooling station. CTUIL was to establish the pooling station near the Chamera-II hydroelectric plant (owned by NHPC). Under the terms of the agreement, transmission charges were to be shared between PTC and Greenko until the infrastructure was integrated into the regional grid.

However, delays in completing key components, Greenko’s plant, NHPC’s Chamera-III hydro plant, and CTUIL’s transmission system, led to disputes over who should bear the transmission costs. While CTUIL’s transmission system was commissioned in November 2011 and Greenko’s plant came online in May 2012, the integration into the regional grid took time, complicating the sharing of transmission charges.

CERC’s initial rulings between 2012 and 2016 held Greenko and PTC jointly liable for these charges. In 2019, CERC reviewed the case and issued an order that included NHPC in the sharing of transmission charges, citing a separate indemnification agreement between CTUIL and NHPC. This review order suggested that NHPC’s involvement in the infrastructure could alter the distribution of liabilities, including Greenko’s responsibility for transmission costs.

Greenko, however, contested this, arguing that NHPC was not part of the original BPTA agreement, which explicitly allocated transmission charges between itself and PTC India. The Appellate Tribunal, after reviewing the case, agreed with Greenko’s position. It concluded that the terms of the BPTA clearly defined the parties’ responsibilities and did not extend any liability to NHPC, which was not part of the agreement. The tribunal also ruled that CTUIL had misinterpreted the BPTA by introducing NHPC’s liability without any legal basis or the consent of the original parties.

The tribunal’s judgment set aside both CERC’s 2019 review order and earlier tariff orders. It also quashed the invoices issued to Greenko by CTUIL, directing the utility to issue fresh invoices strictly in accordance with the BPTA’s terms, which allocated transmission charges between Greenko and PTC based on their respective shares of the transmission capacity.

The ruling has significant implications for the energy sector, clarifying that the terms of the BPTA take precedence in such disputes and that the parties involved in the agreement must bear responsibility as outlined in the contract. It also reinforces that separate agreements, such as indemnification agreements, cannot alter the liabilities of parties who are not explicitly bound by those agreements.