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Jurisdiction of State Commission in inter-state PPAs

The Appellate Tribunal for Electricity in its recent order has held that Haryana State Electricity Regulatory Commission has no jurisdiction to go into the dispute on validity of termination of Power Purchase Agreement (PPA) between the power producer (appellant) and the inter-state power trading licensee in a petition filed by purchaser who was not a party to the said PPA.

In the case before the Tribunal, the trading concern had another Power Sale Agreement (PSA) with the purchaser for sale of power generated by the appellant. The Tribunal held that there was no nexus between the generating company and the state where the power was going to be consumed and even between the PPA and the PSA. Further, it held that the State Commission had committed an error by construing that PPA and PSA were fully inter-dependent as the trader had undertaken not to terminate PPA without prior consent of the purchaser.
It was observed that there was no agreement between the distribution licensee of the State and the generating company and that identification of purchaser just prior to the execution of PSA without reference to the said identification in the PPA or in the amendment of PPA, cannot be construed to be “nexus”.

The Tribunal also noted that the inter-state trader is under the jurisdiction of Central Commission and the generating company was situated in Himachal Pradesh which is out of the jurisdiction of the Haryana State Commission. [Lanco Budhil Hydro Power Private Ltd. v. Haryana Electricity Regulatory Commission – Appellate Tribunal for Electricity, Order dated 9-8-2012 in Appeal No. 188 of 2011].
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