Petition of the CERC (Conduct of Business) Regulations for NRSS XXIX Transmission Ltd – EQ

Summary:

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### 1. Background: Factual & Procedural History

**The Incident:**
Tower no. 286 of the 400 kV Sambha–Amargarh line, located on a hill slope in the Rajouri region of Jammu & Kashmir, developed cracks in its revetment wall and structural distress. NRSS claimed this was due to **unauthorized excavation** by BRO for road expansion (Bulfihaz–Rajouri stretch) in August 2021. The line was shut down for 20 days to de-string and re-string sections to bypass the affected tower.

**Prior Litigation:**
– **May 2022:** NRPC denied deemed availability, finding no evidence of natural calamity and noting the matter as bilateral between BRO and NRSS.
– **August 2022:** CEA also declined to intervene.
– **Petition No. 318/MP/2022 (CERC):** On April 19, 2024, the CERC upheld NRPC’s decision, observing that:
– NRSS had not served a force majeure notice.
– Bracket bends were observed in the tower as early as January–February 2021 (before BRO’s excavation).
– CSIR-CBRI scientists recommended further investigation; no conclusive proof linked the distress solely to BRO’s action.
– The outage could have been avoided with prudent maintenance practices.
– **Appeal No. 277/2024 (APTEL):** NRSS appealed. On January 23, 2025, APTEL permitted NRSS to withdraw an interim application with **liberty to approach CERC** for relief under the newly issued CEA revised SOP dated January 14, 2025. APTEL expressed **no opinion** on the SOP’s applicability.

### 2. The Revised SOP (January 14, 2025): Key Changes

| **Provision** | **SOP dated March 10, 2023** | **Revised SOP dated January 14, 2025** |
| :— | :— | :— |
| **Deemed availability for past shifting** | Expressly excluded: *”deemed availability for past shifting of lines, where the diversion work has already been completed, shall not be considered”* | **No such exclusion**; clause 14 states: *”All such applications for deemed availability shall be considered irrespective of date of application”* |
| **Trigger for SOP** | Shifting of transmission lines for national infrastructure projects (NHAI, Railways, BRO) | Same, plus *any construction that may affect safety, reliability, or clearances* of transmission lines |
| **Retrospective application** | Not permitted | Not expressly stated; petitioner argued implied retrospectivity |

**Petitioner’s Argument:**
NRSS contended that the removal of the “past shifting” exclusion in the revised SOP creates a **fresh statutory entitlement** for its 2022 outage, even though diversion work (bypassing tower 286) was completed in February 2022. It argued that the CEA consciously removed the temporal limitation to allow past cases to be reconsidered.

### 3. CERC’s Analysis & Decision (Key Extracts)

The Commission rejected the petition on multiple grounds:

#### 3.1. No Retrospective Application of Revised SOP
> *”It is a fundamental legal principle that a statute or rule provides no retrospective application unless they expressly state, or by necessary implication demonstrates, that they are meant to apply retrospectively. Here, a revised SOP has been issued to bring greater clarity, simplify and streamline the SOP dated 10.02.2023.”*

**Business Implication:** Regulatory procedures (SOPs) are not amnesty schemes. Even if the exclusion clause is removed, that does not automatically entitle past outages to relief unless the SOP explicitly says so. The CERC refused to read retrospective intent into the revised SOP.

#### 3.2. Failure to Establish Causal Link with BRO’s Action
The Commission noted NRPC’s submission that the petitioner **has not established** that the shifting of the line or the distress to the tower was due to BRO’s road expansion. Key evidence gaps:
– CSIR-CBRI report called for **scientific/elaborate investigation**; no such report was provided.
– Bracket bends were recorded in **January–February 2021** — months before BRO’s August 2021 excavation.
– NRSS itself knew of BRO’s work in **August 2021** but did not take adequate preventive action.

#### 3.3. Prior Adjudication Stands
The CERC reaffirmed its earlier order (April 19, 2024), which had already concluded:
– The outage was **not due to force majeure**.
– It **could have been avoided** with prudent practices.
– NRSS had **not served a force majeure notice** as required.

> *”The matter of deemed availability has already been decided by NRPC and CEA and upheld by the Commission… the revised SOP is neither relevant nor enforceable on NRPC to certify availability for January–February 2022.”*

#### 3.4. Revised SOP Does Not Override Underlying Facts
Even if the SOP were applicable, the **substantive condition** for deemed availability is that the outage must be *for shifting of transmission lines due to infrastructure projects*. Here, NRSS could not prove that the outage was *necessitated solely* by BRO’s work, given the pre-existing distress in the tower.

### 4. Business Analysis: Implications for Transmission Licensees

#### 4.1. Key Takeaways for Transmission Service Providers (TSPs)

| **Risk / Lesson** | **Detailed Implication** |
| :— | :— |
| **SOPs are not retrospective amnesty** | Do not assume that a newer, more lenient SOP will automatically apply to past outages. CERC requires **express retrospective language** or a clear statutory amendment. |
| **Burden of proof is high** | To claim deemed availability due to third-party action (e.g., BRO, NHAI, Railways), TSPs must produce **conclusive technical evidence** (geo-investigation reports, time-stamped patrol logs, independent expert analysis). A mere allegation is insufficient. |
| **Proactive maintenance & documentation** | The CERC penalized NRSS for not noticing bracket bends during routine patrols and for failing to take timely preventive action. TSPs must maintain **rigorous inspection records** and act immediately upon detecting any anomaly. |
| **Force majeure notices are mandatory** | NRSS did not issue a force majeure notice within 7 days of the event, as required under the Transmission Service Agreement (TSA). This single lapse was fatal to its claim. |
| **Bilateral disputes are not regulatory matters** | If the dispute is between a TSP and an infrastructure agency (BRO), the CERC and NRPC may decline to intervene, treating it as a **contractual or tortious issue** to be resolved between the parties (including claims for damages). |

#### 4.2. Strategic Implications for Lenders & Investors

– **Revenue certainty risk:** Deemed availability directly affects transmission charges. A denial of deemed availability for even 20 days can result in **significant revenue loss** (pro-rated annual transmission charges × outage days). Lenders to TSPs should scrutinize historical outage claims and the TSP’s track record in securing deemed availability.
– **Regulatory precedent:** This order confirms that CERC will **not lightly reopen** concluded matters based on subsequent procedural changes (like a revised SOP). Parties must exhaust all factual evidence in the first hearing itself.
– **Alternative recourse:** NRSS can still pursue a claim against BRO for damages (civil liability for trespass / negligence) or seek a revision of the APTEL appeal. However, regulatory deemed availability is now closed.

#### 4.3. Comparison with Adani–SECI Disputes (Previous Summary)

Unlike the Adani–SECI petitions (which involve contractual interpretation of *Change in Law* under PPAs), this case is about **operational availability** under transmission regulations. The CERC has taken a **fact-driven, evidence-heavy** approach here, whereas the Adani matters involve legal questions of statutory interpretation (force majeure vs. change in law). Both, however, underscore the Commission’s reluctance to grant relief without **contemporaneous documentation and compliance with procedural requirements**.

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