Intra-state entities must pay state transmission charges despite using inter-state lines for power evacuation.

The Appellant (HVPNL), a State Transmission Utility (STU) in Haryana, challenged a CERC order dated 29.06.2016.

NTPC (Respondent No. 2) operates the Faridabad Gas Power Station (GPS), which supplies its entire output to Haryana via CTUIL-owned lines (Faridabad-Samaypur and Faridabad-Palla).

NTPC set up a 5 MW Solar Project at the same site to supply power to Odisha (GRIDCO) via the same lines.

While these lines are owned by CTUIL, CERC had previously ruled they are "akin to state lines" because Haryana bears their full cost.

In 2014, NTPC signed Connectivity and LTA Agreements with HVPNL and obtained an NOC that stipulated payment of State transmission charges.

Later, NTPC filed a petition before CERC claiming the system was ISTS and the HVPNL agreements were void.

CERC ruled in favor of NTPC, holding that no State network was used and the agreements were non-est.

1. Whether the transmission lines and substations (specifically Palla) used for evacuation are ISTS or State assets, and whether HVPNL is entitled to transmission charges.

2. Whether the Connectivity and LTA Agreements entered into between NTPC and HVPNL are legally valid under the Connectivity Regulations.

3. Whether the scope of an NOC from a State Utility for an intra-State entity seeking LTA on ISTS is limited only to metering and scheduling.

The court applied Section 2(36)(iii) of the Electricity Act, 2003, which defines Inter-State Transmission System (ISTS) to include lines within a State owned or controlled by the CTU.

It referred to the CERC (Grant of Connectivity, Long-term Access and Medium-term Open Access) Regulations, 2009, specifically the 3rd Amendment regarding "Principal Generators".

It relied on the precedent in PTC India Ltd. v. CERC (2010), establishing that statutory regulations override private contracts.

It also considered the CERC (Sharing of Inter-State Transmission Charges and Losses) Regulations, 2010, regarding exemptions for solar power.

The Tribunal found that CERC made a factual error in claiming the Palla substation belongs to BBMB; it is owned by HVPNL, meaning the State network is indeed utilized.

While the 220 kV lines are technically ISTS under the Act, they are uniquely treated "akin to state lines" for cost recovery.

The Tribunal reasoned that since the Solar Project was treated as an "intra-State entity" (because it connects through a Principal Generator dedicated to the State), it must follow the "Detailed Procedure" which requires an NOC from the STU.

This NOC (Format LTA-3) explicitly allows STUs to specify state-level transmission charges.

However, regarding the 2014 Agreements, the Tribunal held that since CTUIL is the designated "Nodal Agency" for ISTS connectivity under the Regulations, HVPNL had no authority to sign independent Connectivity/LTA contracts; thus, those specific contracts were void as they contravened statutory regulations.

CERC’s finding that no State transmission system was used is set aside, as the Palla substation is a State asset.

The finding that an STU’s NOC is limited only to scheduling/metering is set aside as it contradicts the approved Detailed Procedure.

HVPNL is entitled to receive applicable State transmission charges and losses from the date of commissioning.

It upheld CERC’s view that the specific Connectivity and LTA Agreements signed with HVPNL were non-est in law because only the CTU can grant such access to ISTS.