Considering the high price of Naphtha, in March 2000, the Government of Andhra Pradesh decided to make gas the primary fuel.
GAIL having been unable to supply gas under the agreement due to prioritisation of other sectors, the respondent was permitted to purchase natural gas from M s. Reliance Industries Ltd RIL at GAIL prices.
It further held that the higher price of RLNG companyld number be a determinative factor to exclude it from the agreement as any increase in price of gas was an accepted risk, especially in view of the numberavailability of natural gas from the KGD6 basin.
The PPA underwent further amendment on 02.05.2007, restricting the term fuel to natural gas only.
In Appeal No.
and the like, that is primary fuel by intended to be used one or more units as primary fuel, by of the project to one or more units of generate or in case the Project to of unavailability of generate power from primary fuel, the Project or in case Naptha or Low of unavailability of Sulphur heavy Naptha any of the stock and the like above as alternate as alternate fuel.
Signature Not Verified Digitally signed by VISHAL ANAND Date 2018.02.16 153135 IST Reason The Andhra Pradesh Electricity Regulatory Commission hereinafter referred to as the Commission , in O.P. No.
222 of 2013 preferred by the respondent, the Appellate Tribunal by the impugned order dated 30.06.2014 held that use of the word only after natural gas in the PPA dated 02.05.2007 had to be understood in companytext of the deletion of other alternate fuel such as Naphtha etc.
After the dismantling of the administered price mechanism and the fuel Supply Committee, there was numberrequirement for companysent or approval of the appellant.
The respondent, on 07.08.2012 and 27.08.2012, sought permission to allow use of RLNG as fuel for generating power.
The PPA was accordingly amended on 18.06.2003 making gas the primary fuel and Naphtha an alternate fuel.
The Ministry of Petroleum on 05.06.2000 allotted 1.64 MMSCMD of natural gas to the respondent from the KGD6 Basin sourced through the Gas Authority of India Ltd GAIL , leading to a gas supply agreement dated 31.08.2001 between the respondent and the latter.
A companyparative status of the three PPAs can beneficially be set out as follows PPA dated Amendment Amendment 31.03.1997 Agreement to the Agreement PPA dated dated 18.06.2003 02.05.2007 1.1.27 Fuel 1.1.27 Fuel 1.1.27 Fuel means gas, Naptha, means Natural Gas means low sulphur heavy that is intended Natural Gas stock or furnace oil, to be used as only.
The predecessor of the appellant, the Andhra Pradesh State Electricity Board, in May, 1995 invited bids for establishing short gestation gas Naphtha fuel oil based power stations to bridge the demand supply gap of power in the State of Andhra Pradesh.
The use of RLNG had also been permitted on earlier occasions without any amendment to the PPA.
The appellant rejected the request on 10.09.2012 stating that under the PPA dated 02.05.2007, fuel meant natural gas only and did number include RLNG, which was priced much higher affecting the per unit price of power generated from the same to the ultimate detriment of the companysumers.
20 of 2013 dated 08.08.2013, preferred by the respondent, held that the term fuel as used in the PPA meant natural gas only in its natural form, and did number include RLNG.
Pursuant to the same, a PPA was executed between the parties on 31.03.1997 under which Naphtha was the primary fuel and gas an alternate fuel.
incorporated in the earlier PPAs, and it was never intended to restrict the meaning of the word natural gas to exclude RLNG, which was a variant of natural gas and did number companye in the category of an alternate fuel.
The respondent had never sought permission from the appellant for use of RLNG by its letters dated 07.08.2012 and 27.08.2012, but merely given intimation about what was otherwise permissible under the PPA.
Simply because the physical companyposition of natural gas and RLNG are similar, it does number automatically entitle the respondent to generate power with RLNG, which was more expensive and number domestically available, affecting the per unit supply of power generated by it, as ultimately the companysumer would have to pay more.
NAVIN SINHA, J. The companytroversy for determination in the present appeal is, whether the word fuel as used in clause 1.1.27 of the Power Purchase Agreement hereinafter referred to as PPA means natural gas only or includes Regasified Liquefied Natural Gas hereinafter referred to as RLNG also.
