TNERC directs TANGEDCO to settle dues to windmill firm

Published: 05th April 2013 08:19 AM  |   Last Updated: 05th April 2013 08:19 AM   |  A+A-

A Tirupur-based wind energy generating company, TT Industries, has won a claim against the Tamil Nadu Energy Generation and Distribution Company (TANGEDCO- previously TNEB) seeking settlement of dues with interest.

The Tamil Nadu Electricity Regulatory Commissioner (TNERC) ruled in favour of TT Industries while passing order on an application from the latter.

TT Industries had in March 2008 entered into an Energy Purchase Agreement with the TANGEDCO and accordingly sold energy generated through their windmill to the latter. However, as on February 2012, the TANGEDCO had failed to settle an outstanding amount of over `66.38 lakh.

Hence TT Industries approached the TNERC to direct the TANGEDCO to settle the principal amount along with `19.55 lakh towards interest at the rate of 1.5 per cent for every month from the respective due date of the respective bills. It pointed out that as per the agreement, the TANGEDCO is obliged to make payment within seven days to the wind energy generator but it failed to make payments despite reminders.

In its reply, the TANGEDCO submitted that the agreement does not provide for payment of interest. Hence, the claim of TT Industries must be rejected.

However, in an earlier case, the TNERC had directed the TANGEDCO to pay interest at the rate of 1 per cent per month to another company. The Appellate Tribunal for Electricity too had then upheld the TNERC decision to impose interest on outstanding dues.

But, the TANGEDCO said it had appealed against the order to the Supreme Court and the matter was sub-judice with the court.

“In view of the decision to file an appeal before the Supreme Court and as any decision in the above petition may likely to result in multiplicity of proceedings on one and the same issue, this Commission may be pleased to dismiss the above petition for the present in public interest,” TANGEDCO’s counsel submitted before the TNERC.

TANGEDCO nonetheless, during a meeting with representatives of the Tirupur company, agreed to settle the outstanding principal amount within three months but without any interest.

However, rejecting the contention, TNERC Members K Venugopal and S Nagalsamy, who heard the petition, pointed out that the respondent (TANGEDCO) has not assailed the Commission’s earlier order on payment of interest on any legal basis.

“Instead in their additional affidavit filed on December 4, 2012 (the TANGEDCO) has stated that an appeal has been filed in the Supreme Court. The respondent has submitted that the payment of interest would involve huge interest commitments and this argument would not be a ground for denying the interest, if the petitioner is eligible for the same,” the member observed.

He further added that since the Supreme Court had not stayed the TNERC’s earlier order, the TANGEDCO should pay up the dues with an interest at the rate of 10 per cent per annum to TT Industries.


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