Powergrid Corporation of India Limited vs Central Electricity Regulatory Commission & Ors.

Held: Not called for – Appellate tribunal and CERC justified in rejecting the appellant’s claim of additional capitalization due to replacement of the damaged ICTs – Reg. 53 provides that additional capital expenditure incurred after the commercial operation date and upto the cut-off-date may be admitted by the CERC if such expenditure relates to deferred liabilities, deferred works, procurement of initial spares, etc. – Reg. 53 does not include within its scope replacement of transformers due to damage or failure – As per Reg. 53(2)(iv) any additional work/services which becomes necessary for the efficient and successful operation of the project but not included in the original project cost may be admitted by CERC as additional capital expenditure – All that the appellant had done was diversion and replacement of transformers which cannot be construed as doing any additional work/services u/Reg.53(2)(iv) – Nothing on record to show that prior to the breakdown of transformers the transmission systems were in bad shape or had started wearing out – As regards the self-insurance policy, the loss caused to the appellant by fire would be covered by the policy as it covered all fires which caused loss without any exception and as all the ICTs were operating until those got burnt – Proximate cause for the damage to the transformers is the implosion/explosion in the internal/external machinery of the transformers which caused fire – Self-insurance policy of the appellant covered the cost of replacement of the damaged ICTs – Appellate tribunal justified in directing the appellant to finance the net cost from the self-insurance fund reserve as part of the operation and maintenance charges – As decapitalization and additional capitalization of the replaced ICTs have not been allowed, issuance of direction to NRPC for revised availability certificate for the transmission assets does not arise. [Paras 28-35, 37-39]