The Central Electricity Regulatory Commission (CERC) has disposed of a petition filed by NERGS-I Power Transmission Limited seeking an inter-state transmission license for the North Eastern Region Generation Scheme-I (NERGS-I) in Bokajan, Assam. The transmission project was planned to provide grid connectivity for a proposed 750 MW solar power project being developed by Assam Power Distribution Company Limited (APDCL).
The transmission project had been awarded to Techno Electric & Engineering Company Limited through a competitive bidding process. The company secured the project by quoting annual transmission charges of ₹303.68 million. However, the future of the project changed after the proposed solar plant was suspended.
During the proceedings, APDCL informed the commission that the Government of India had withdrawn its proposal to obtain funding from the Asian Development Bank (ADB) for the 750 MW solar project. The withdrawal followed a request from the Government of Assam, leading to the suspension of the solar development. As a result, APDCL’s board decided to surrender the inter-state transmission connectivity that had been granted for the project. With no other beneficiaries connected to the scheme, the dedicated transmission infrastructure was no longer required.
CERC had earlier directed NERGS-I, APDCL, and the Central Transmission Utility of India Limited (CTUIL) to hold discussions and resolve the issue of expenses already incurred for the transmission project. However, the parties were unable to reach an agreement due to significant differences over the amount of compensation.
NERGS-I claimed that it had incurred actual project-related expenses amounting to ₹28.51 crore. In addition, it sought ₹40.84 crore towards opportunity losses and cancellation charges associated with the project. APDCL disputed these claims, maintaining that it was liable only for verified and project-specific expenditures. According to APDCL, the admissible costs were around ₹5.12 crore.
With the transmission project no longer required, NERGS-I filed an application requesting permission to withdraw its transmission license petition. The company stated that it intended to file a separate petition to recover compensation from CTUIL. However, both CTUIL and APDCL opposed the request, arguing that withdrawing the petition at this stage could lead to multiple legal proceedings and bypass the termination process specified under the Transmission Service Agreement (TSA). APDCL also sought the release of its bank guarantee worth ₹214 crore, which was being held by CTUIL.
In its final order, CERC observed that constructing the transmission system without the associated solar project would create a stranded and uneconomical asset, which would be contrary to the objectives of the Electricity Act. The commission therefore declared the transmission license petition infructuous and disposed of the matter.
CERC directed the concerned parties to complete the formal termination of the Transmission Service Agreement and ensure the return of the applicable performance bank guarantees. The commission also clarified that it would not decide the financial disputes within the scope of the license proceedings. However, it granted NERGS-I the liberty to file a separate petition seeking compensation, while preserving the rights of all parties to raise their arguments in any future legal proceedings.
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