HINDUJA NATIONAL POWER CORPORATION LIMITED (HNPCL) vs ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION & Ors
- Court
- Appellate Tribunal For Electricity
Judgement in Appeal Nos. 27 of 2026
IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL No. 27 OF 2026 & IA No. 41 OF 2026
rd
Dated: 03 July, 2026
Present: Hon`ble Ms. Seema Gupta, Officiating Chairperson
Hon`ble Mr. Virender Bhat, Judicial Member
IN THE MATTER OF:
HINDUJA NATIONAL POWER CORPORATION LIMITED (HNPCL)
Through its authorized Signatory – Vice President Commercial
Post Bag No.1, Kukatpally,
Shanthnagar I.E. Hyderabad 500 108,
Telengana … Appellant(s)
VERSUS
1. ANDHRA PRADESH ELECTRICITY REGULATORY COMMISSION
Through its Secretary ,
Vidyut Niyantrana Bhavan,
220/132/33/11KV AP Carbides Sub Station,
Dinnedevarapadu road,
Kurnool – 518002
Andhra Pradesh.
2. SOUTHERN POWER DISTRIBUTION COMPANY OF ANDHRA PRADESH
LIMITED (APSPDCL)
Srinivasapuram, Thiruchanoor Road,
Tirupati – 517503,
Andhra Pradesh.
3. EASTERN POWER DISTRIBUTION COMPANY OF ANDHRA PRADESH
LIMITED (APEPDCL)
P & T Colony, Seethammadhara,
Vishakhapatnam – 530013,
Andhra Pradesh.
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Judgement in Appeal Nos. 27 of 2026
4. ANDHRA PRADESH CENTRAL POWER DISTRIBUTION CORPORATION
LIMITED (APCPDCL)
Corporate Office,
Beside Polytechnic College,
ITI Road, Vijayawada – 520008,
Andhra Pradesh …. Respondent(s)
Counsel on record for the Appellant(s) : Mr. M.G. Ramachandran, Sr. Adv.
Mr. Atul Sharma
Mr. Abhishek Sharma
Mr. Aditya K. Singh
Ms. Anukriti Jain
Mr. Pranshul Kulshreshtha
Mr. Shubham Arya
Mr. Mridul Gupta
Ms. Poorva Saigal
Ms. Pallavi Saigal
Mr. Akshaya Lal
Mr. Vineet Gupta
Ms. Adyasha Patra
for App. 1
Counsel on record for the Respondent(s) : Mr. Gaichangpou Gangmei
Mr. Arjun D Singh
Mr. Maitreya Mahaley
Mr. Yimyanger Longkumer
from Res. 2 to Res. 4
Mr. Rudrajit Ghosh
Ms. Ritika Singhal
Mr. Avi Leuna
Mr. Ritik Raj
JUDGEMENT
PER HON’BLE MRS. SEEMA GUPTA, OFFICIATING CHAIRPERSON
1. The present Appeal No. 27 of 2026 has been filed by Hinduja National
Power Corporation Limited (“Appellant”) under Section 111 of the Electricity Act,
2003, assailing the order dated 30.12.2025 (“Impugned Order”) passed by
Andhra Pradesh Electricity Regulatory Commission – the Respondent No.1
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Judgement in Appeal Nos. 27 of 2026
hereinafter referred as (“APERC / State Commission") in O.P. No.12 of 2024,
whereby the State Commission determined the Multi-Year Tariff ("MYT") and
Annual Revenue Requirement ("ARR") for the Fifth Control Period (FY 2024-25
to FY 2028-29) in respect of HNPCL's 1040 MW (2 × 520 MW) coal-based
thermal power station located at Visakhapatnam, Andhra Pradesh.
Description of Parties
2. The Appellant is a Company incorporated under the provisions of the
Companies Act, 1956 having its registered office in Hyderabad, Telangana. The
Appellant has established a 1040 MW (2x520 MW) coal based thermal power
station (“ the Project”) at Vishakhapatnam, in the State of Andhra Pradesh.
3. The Respondent No.1, i.e. Andhra Pradesh Electricity Regulatory
Commission (hereinafter referred to as “APERC/State Commission” ).
4. The Respondent No.2, i.e., Southern Power Distribution Company of
Andhra Pradesh Limited (APSPDCL), Respondent No.3, - Eastern Power
Distribution Company of Andhra Pradesh Limited (APEPDCL) and Respondent
No.4 - Andhra Pradesh Central Power Distribution Corporation Limited
(APCPDCL) are state-owned power distribution companies.
Factual matrix of the Case:
5. The contractual relationship between the parties to the present case has a
long history spanning over the decades. On 17.07.1992, a Memorandum of
Understanding ("MoU") was signed between the Appellant and the erstwhile
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Judgement in Appeal Nos. 27 of 2026
Andhra Pradesh State Electricity Board ("APSEB") for setting up the 1040 MW
coal-based thermal power station at Visakhapatnam by Appellant. The present
case also has a history of protracted litigation at multiple levels, a brief snapshot
is given hereunder:
Date Proceeding/ Events
31.01.2018 AP DISCOMs had filed O.P. No. 19 of 2016 seeking
approval of restated PPA and Appellant had filed No. 21 of
2015 seeking determination of capital cost and multi-year
tariff for the Project. During the pendency of O.P 21 of 2015,
State Commission fixed interim tariff from time to time. State
Commission vide its order dated 31.01.2018, permitted the
DISCOMs to withdraw O.P. No. 19 of 2016 and closed O.P.
21 of 2015 with liberty to Appellant to pursue remedies in
law.
07.01.2020 Appellant filed an Appeal 41 of 2018 before this tribunal,
against the order dated 31.01.2018, which was allowed by
the Tribunal vide judgment dated 07.01.2020
02.02.2022 Discoms filed a Civil Appeal No.1844 of 2020 before Hon'ble
Supreme Court, wherein Supreme Court directed APERC to
adjudicate O.P. No. 21 of 2015 and O.P. No. 19 of 2016 on
merits.
01.08.2022 APERC passed Common Order in O.P. No. 21 of 2015 and
O.P. No. 19 of 2016, which is under challenge by Appellant
in Appeal No. 743 of 2023 before this Tribunal, and is
pending for the adjudication.
02.04.2024 In pursuance to liberty granted by this Tribunal, Appellant
had filed an O.P No 1 of 2024, seeking determination of
base rate of variable charges as on 01.04.2023, and
extension of time for completion of railway corridor works.
APERC passed order in O.P. No. 1 of 2024 on 02.04.2024,
revising base variable cost and disallowing road
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transportation charges of Rs. 0.58/kWh effective
01.08.2023.
12.04.2024 Hon'ble High Court of Andhra Pradesh (W.P. No. 8782 of
2024) vide an interim order stayed APERC's direction to
deduct Rs. 0.58/kWh from Appellant’s energy charges. Writ
petition pending.
15.04.2024 CERC (Terms and Conditions of Tariff) Regulations, 2024
notified and brought into force.
6. Appellant had filed O.P. No. 12 of 2024 before APERC seeking determination
of Multi Year Tariff for the fifth Control period from FY 2024-25 to FY 2028-29 for
its 1040 MW project, without prejudice to the outcome of Appeal No. 743 of 2023
wherein issue of disallowance of capital cost, tariff parameters, IDC, IEDC etc.
have been challenged, . In the O.P 12 of 2024, Appellant has also sought
additional capital expenditure incurred and proposed.
7. APERC passed the order in O.P. No 12 of 2024 on 30.12.2025 and disallowed
some claims, aggrieved thereby Appellant has filed the present Appeal and
following five issues have been raised:
(i) Penal deductions from variable charges on account of shortfall in
availability;
(ii) Entitlement towards part load compensation;
(iii) Determination and recovery of water charges;
(iv) Treatment and admissibility of capital spares and related claims;
(v) Claims pertaining to ash disposal expenses and additional capitalization.
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ANALYSIS AND DISCUSSION
8. During the hearing, it is suggested and consented by the counsels for the
Appellant and Respondents and as recorded in this Tribunal’s daily order dated
27.04.2026, that adjudication in the present appeal be confined to the following
two issues:
(A) Deductions from Variable Charges for shortfall in monthly availability;
(B) Part Load Compensation.
9. Appellant sought liberty to file fresh appeal, if so desired, with respect to
balance issues. Accordingly, we heard Mr. Ramachandran, learned senior
counsel & Mr. Shubham Arya, learned counsel on behalf of Appellant and - Mr.
Gaichangpou Gangmei on behalf of Respondent No.1; and Mr. Yelamanchi Shiva
Santosh Kumar and other counsels appearing for Respondent No. 2 to 4 , on the
above two issues and perused written submissions filed by parties, Impugned
Order and other documents. Present judgment is confined to the aforesaid two
issues only. Appellant has been granted liberty to raise balance issue, if required,
by way of fresh Appeal.
ISSUE A: DEDUCTIONS FROM VARIABLE CHARGES FOR SHORTFALL IN
MONTHLY AVAILABILITY
10. The issue pertains to reduction of variable charge at graded rates of 5 paise
/10 paise/15 paise per unit, in the event of monthly availability falling below the
normative level, relevant extract of the Impugned Order is reproduced hereunder:
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Judgement in Appeal Nos. 27 of 2026
"22. Consistent with the directives issued for APGENCO, APPDCL and
SELL thermal stations, the Commission hereby directs the DISCOMs to
apply the following deductions from the Variable Cost:
Five paise per unit, if the actual monthly availability falls up to 5%
below the normative/target level;
Ten paise per unit, if the shortfall is between 5% and 15%; and
Fifteen paise per unit, if the shortfall exceeds 15%.
HNPCL may seek release of any amounts withheld by the DISCOMs on
this account by filing an appropriate petition before the Commission,
justifying the reasons for the shortfall and establishing that the
underperformance was attributable to uncontrollable factors."
It is submitted on behalf of Appellant that the Contractual and regulatory scheme
itself demonstrates that fixed charges are linked to actual availability, whereas
energy charges are linked to actual scheduled energy. As per common order
dated 01.08.2022, the State Commission has adopted the CERC Tariff
Regulation, 2024 norms for the units of 500 MW and above capacity and as such
CERC Regulation, APERC Regulation or the PPA do not provide for the reduction
on energy charges for lower availability declaration, therefore, the impugned
deductions are without Statutory or Contractual Authority. Appellant has
specifically relied on State’s Commission’s order dated 27.09.2025 passed in
relation to the reductions in variable charges in which State Commission
recognized that the regulatory framework does not allow separate penalties for
underperformance and that disallowance of fixed charges itself operates as the
in-built deterrent for the generator. It is further submitted that just because similar
illegal deductions were applied to APGENCO units, does not validate their
application in the Appellant’s case, as the principle of "negative equality" cannot
be used to perpetuate an unlawful tariff treatment. In terms of the Impugned
Order, deduction of Rs. 12.26 Crore has already been erroneously withheld from
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its bills for the months of December 2025 through February 2026 and prays for
setting aside of Impugned Order and reimbursement of the withheld amount
along with applicable interest. While it is contended on behalf of State
Commission that CERC Tariff Regulations, 2024 were adopted for guidance, where
necessary and Computation of Variable charges is in accordance to Clause 13.1 of
APERC Regulation 1 of 2008- landed cost of fuel, Gross Calorific Value (GCV) of
fuel, and normative parameters for specific oil consumption, auxiliary consumption,
and Station Heat Rate and the aid formula is uniformly applied across similar thermal
generators- APGENCO, APPDCL. It is further contended on behalf of State
Commission that subject to filing a Petition demonstrating that such
underperformance in achieving monthly availability is attributable to uncontrollable
factors, liberty is already granted to the Appellant to seek release of withheld
amounts, if any, thus ensuring natural justice, preventing arbitrariness.
11. Regarding adoption of CERC Regulations for the Appellant’s project, we
note from the APERC order dated 01.08.2022, that APERC Regulation 1 of 2008,
specifies operational norms for certain parameters like auxiliary consumption,
Station heat rate (SHR), which are used for computation of Working Capital, for
units upto 500 MW capacities only, accordingly, APERC adopted CERC norms
with regard to operational parameters like auxiliary consumption and Station heat
rate (SHR) for the Appellant’s project. With regard to specific fuel consumption
and target availability, which are also operational parameters and used in
working capital computation, State Commission referring to Tariff Policy 2016
specifically noted that norms should be efficient and therefore commission finds
it appropriate to adopt stricter norms specified by CERC for these parameters
and adopted 0.5 ml/ kwh for specific oil consumption and the target normative
availability of 85 %. The working capital amount was worked out accordingly for
the Appellant’s project.
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12. It is of relevance to note the provisions of CERC Regulations, APERC
Regulations and PPA signed between the parties, with regard to recovery of fixed
cost and variable charges. The relevant provisions are reproduced hereinbelow:
i. CERC Regulation 2024;
As per CERC Regulation, the tariff for the supply of electricity from
thermal generating station would comprise of two parts, capacity charge
(for recovery of annual fixed cost) and Energy Charges (recovery of
primary and secondary fuel). The Components of fixed cost are defined
in Regulation 15, which consists Return on Equity (ROE), Interest on
Loan, Depreciation, Interest of working capital and O&M expenses. The
Energy charge is defined in Regulation 16, which comprises of Landed
cost of primary fuel, Cost of Secondary fuel, cost of limestone as
applicable.
The methodology of computation of Capacity charge and Energy
Charges is defined in Chapter 11 of the Regulation. In the formula for
computing capacity charge, the plant availability factor achieved during
the Month (both peak and off peak) vis a vis Normative Annual Plant
availability has been factored; meaning thereby, that the recovery of
Fixed cost is linked with the Plant availability factor during the month.
The Computation of Energy Charge is stipulated in Regulation 64 for
thermal Generating station and is defined as under: -
Energy Charge= (Energy Charge Rate in Rs /kwh)x ( scheduled energy(ex
bus) for the month in kwh).
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ii. PPA dated 16.07.2024 signed between Appellant and Respondent
2 – 4;
In terms of Schedule F of the PPA, the full fixed charges are payable
based on target availability and in case of actual availability being lower
than the target availability, the fixed charges shall be payable on a
proportionate basis corresponding to actual availability. The
components of Monthly tariff payment are defined in clause 1.2 of
Schedule-F, reproduced hereinbelow:-
“1.2 Monthly Tariff Payment
1.2.1. Components of Monthly Tariff Payment
The Monthly Tariff Bill for any Month in a Year shall consist of the following:
(i) Monthly Fixed Charge Payment in accordance with Article 1.2.2 below;
(ii) Monthly Energy Charge for scheduled energy in accordance with Article
1.2.3 below;
(iii) Incentive Payment determined in accordance with Article 1.2.4 below;”
Monthly Fixed Charges payment is stipulated in clause 1.2.2, and
same is reproduced as under: -
“1.2.2. Monthly Fixed Charge Payment
The Monthly Fixed Charge Payment for any month in a Year shall be
calculated as below:
AFC x {(NDM/NDY) x AA/NA} (in Rupees);
Where,
AFC=Annual fixed cost specified for the Tariff Year as approved by the
Commission, in Rupees as determined by the Commission
NA=Target Availability in percentage
NDM=Number of days in the month
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NDY=Number of days in the year
AA=Availability achieved during the month including Deemed Availability,
Monthly Energy Charge is defined in Clause 1.2.3 of Schedule F, as
extracted hereunder:-
“1.2.3. Monthly Energy Charges
The Monthly Energy Charge Payment for any month in a Year shall be
calculated as below:
Energy charge rate in Rs./kWh x scheduled energy (ex-bus) for the month
in kWh.
Energy charge rate (ECR) in Rupees per kWh on ex-power plant basis shall
be the sum of energy charge rate as determined by the Commission as per
the Tariff Regulations which may be computed to three decimal places in
accordance with the following formulae and Fuel Cost Adjustment:
ECR= [ {(SHR-SFC x CVSF) x LPPF / CVPF+LPSF x SFC) x 100/ (100-
AUX)] +FCA
Where,
AUX=Normative auxiliary energy consumption as per Prescribed
Parameters CVPFGross Calorific Value of coal as fired, in kCal per kg to
be calculated as given below:
Initially, Gross Calorific Value of coal shall be taken as per actual of the
preceding three months. Any variation shall be adjusted on month to month
basis on the basis of Gross Calorific Value of coal received and burnt and
landed cost incurred by the Company for procurement of coal.
CVSF=Calorific value of secondary fuel, in kCal per ml.
SHR=Station Heat Rate, in kCal per kWh.
LPP= Weighted average landed price of primary fuel i.e. coal, in Rupees
per kg during the month.
LPSF=Weighted average landed cost of Secondary fuel oil in Rs/ml
SFC=Normative Specific fuel oil consumption as per Prescribed
Parameters
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The landed cost of fuel for the month shall include price of fuel
corresponding to the grade and quality of fuel inclusive of royalty, taxes
and duties as applicable, Washery charges as applicable, transportation
cost by rail/ road or any other means, and, for the purpose of computation
of energy charge, and shall be arrived at after considering normative transit
and handling losses for coal of 0.8% of the quantity of coal dispatched by
the coal supply company during the month.
iii. APERC Regulations 2008;
As per Regulation 11.1.1, the Target Availability for full recovery of
Annual fixed charges in case of coal/gas base plants is set as 80 % . In
these Regulations, the Components for annual fixed charges are Return
on Capital Employed, Depreciation, taxes on Income and O&M
expenses as defined in Regulation 12 and their recovery is related to
Target Availability. Energy Charge Computation is defined in Regulation
13 and formula for the same is extracted as under:
Energy Charge (Rs) = rate of Energy Charge in Rs /kwh)x Ex-bus energy
sent out corresponding to scheduled energy for the month in kwh .
13. It is clear from the above that 85 % normative availability for Appellant’s
plant is in accordance with CERC norms as adopted by State Commission in
its order dated 01.08.2022, because APERC Regulations stipulates normative
availability of 80 %. It is also clear from the above, that the governing
framework, whether under the CERC Regulations, the APERC Regulations, or
the Power Purchase Agreement executed between the parties expressly
stipulates the methodology for recovery of monthly charges. The scheme is
clear and unambiguous: monthly fixed charges are linked to the Plant
Availability Factor (PAF) for the month vis-à-vis the normative annual plant
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Judgement in Appeal Nos. 27 of 2026
availability, whereas energy charges are linked solely to the fuel cost/energy
charge pertaining to the quantum of energy actually supplied during the month.
14. CERC Regulations as well PPA provide that in the event, generator fails to
achieve the targeted availability, there shall be a penalty in the monthly fixed
capacity charges. Simultaneously, the payment of monthly energy charges is
limited strictly to recovery of fuel charges for the energy supplied, irrespective
of the plant availability in that month. Thus, the regulatory and contractual
scheme draws a clear distinction: fixed charges are availability-linked, subject
to penalty for shortfall, whereas energy charges are supply-linked, confined to
reimbursement of actual fuel cost.
15. It is submitted on behalf of State Commission that the Denial/reduction of
Capacity Charges for availability shortfalls accounts for the generator's lost
fixed-cost recovery but it does not compensate DISCOMs or consumers for
the additional burden of forced higher-cost procurement from the market, to
replace the shortfall in energy from the Appellant. The deductions from
Variable Charges provide partial compensation for these avoidable costs and
serve as a direct disincentive against chronic monthly under performance.
Accordingly, the main issue is whether APERC, while determining tariff, can
regulate instances of drastic and unpredictable monthly availability shortfall by
generators even in the circumstances where such generators largely meet
their annual availability requirements. It is submitted on behalf of Respondents
that while the PPA and Regulations focus on annual normative availability, they
do not preclude monthly adjustments. According to the Respondents, APERC,
being a statutory body, is empowered and obligated to fill contractual and
regulatory gaps to ensure reliable supply. The Respondents placed reliance
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Judgement in Appeal Nos. 27 of 2026
on the Supreme Court Judgements; “PTC India Ltd. v. CERC, (2010) 4 SCC
603 ”, “Power Grid Corporation of India Limited vs. Madhya Pradesh
Power Transmission Company Limited & Ors., (2025) 8 SCC 705” to
support their contentions with regard to imposition of graded deductions on
variable charges. State Commission submit that under Sections 62 and 86 of
the Electricity Act, 2003, APERC has broad statutory powers to determine
tariffs, including specifying incentive/penalty structures for performance
metrics such as availability, even when Regulations are silent on the specific
matter.
16. Some force may be found in the submissions advanced on behalf of the
Respondents, to the effect that mere reduction in fixed cost recovery for failure
to achieve the targeted availability in a month may not adequately compensate
or offset the financial burden occasioned by procurement of costly short-term
power, and therefore a penalty by way of reduction in the variable
charge/energy charge could appear justifiable. However, such considerations
of equity or expediency cannot prevail in a regulated framework. In a statutory
regulatory regime, the Commission is bound to act strictly in accordance with
the governing provisions of the Act.
17. The scheme of recovery of fixed cost and energy charge in a given month
is prescribed by the Regulation itself. Once the Regulation stipulates the
manner in which fixed cost is to be recovered, and the manner in which energy
charge is to be computed and levied, the Commission has no jurisdiction to
interfere with or modify that scheme by way of adjudication or in a tariff order.
Any departure from the prescribed mechanism can only be effected by way of
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Judgement in Appeal Nos. 27 of 2026
a formal amendment to the Regulation in accordance with law, and not
otherwise.
18. Accordingly, although the grievance of the Respondents may have some
practical appeal, the State Commission cannot substitute its own view for the
statutory prescription. The recovery of fixed cost and energy charge must be
effected strictly in the manner laid down in the applicable Regulation, and any
penalty or disallowance must be confined to the mode expressly provided
therein. Moreover, in the present case PPA also stipulates the same
methodology as stipulated in the Regulations for recovery of monthly energy
charge delinked with the availability achieved in that month. Therefore we don’t
find any merit in the contention of State Commission that Appellant has been
granted liberty to approach the Commission with a petition if the shortfall is for
reasons beyond their Control.
19. It is further evident from the foregoing discussion that the CERC
Regulations framed under Section 181 of the Electricity Act, 2003, were
adopted for the Appellant’s plant and as such both CERC as well as APERC
Regulations clearly stipulate the methodology for recovery of energy charges
for a given month. Once such methodology is prescribed, the Commission is
bound to apply it in its entirety. We therefore, find no merit in the submission
of the Respondents that there exists a gap in the regulatory scheme which the
State Commission, as a statutory body, is empowered or obligated to fill in
order to ensure reliable supply. The doctrine of casus omissus has no
application in the present context, for the Regulations are complete in
themselves and leave no vacuum for the Commission to legislate by way of
adjudication.
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20. We may also observe that the application of similar reduction in energy
charges for other intra-State generators by the State Commission is of no
relevance in the present proceedings. Those orders are not under challenge
before us, and this Tribunal is not bound to apply the same principle in the
case of the Appellant merely because it has been applied elsewhere. Each
appeal must be adjudicated on the basis of the statutory framework and the
specific impugned order under consideration. The doctrine of parity cannot be
invoked to perpetuate an illegality or to justify a deviation from the Regulations.
21. In consequence, we hold that the reasoning adopted by the State
Commission in the impugned order, as well as it seeks to justify reduction of
energy charges by reference to similar treatment accorded to other intra-State
generators, is unsustainable in law.
22. The reliance placed by the Respondents on the ratio of PTC India Ltd. v.
CERC, (2010) 4 SCC 603 and Power Grid Corporation of India Limited v.
Madhya Pradesh Power Transmission Company Limited & Ors., (2025) 8
SCC 705 is wholly misplaced. Those decisions dealt with the binding nature
of regulations and the scope of regulatory powers in different contexts. They
do not advance the Respondents’ contention that the Commission may, in the
guise of filling contractual or regulatory gaps, alter the express methodology
prescribed for recovery of charges. In the present case, the Regulations
themselves provide the governing framework, and the Commission is
duty-bound to adhere to them.
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23. We hold that the findings recorded in the Impugned Order on this issue
cannot be sustained in law. The Commission’s attempt to deviate from the
prescribed methodology of recovery of energy charges, under the pretext of
filling an alleged regulatory gap, is ultra vires the Regulations and contrary to
settled principles of delegated legislation. It is settled position that once the
methodology is expressly prescribed in Regulations, the same is required to
be applied in its entirety.
24. In view of above deliberations, the findings in the Impugned Order on the
issue cannot be sustained in law and need to be set aside and the Appellant
is entitled for refund of the amount withheld/deducted from the energy charge
along with applicable carrying cost as per Regulations.
ISSUE B: PART LOAD COMPENSATION
25. It is submitted on behalf of the Appellant that the provisions of CERC
Regulations (4th Amendment to the Grid Code), the applicability whereof to
the Appellant has been determined by the State Commission vide its Order
dated 01.08.2022, specifically provides for Part load compensation (PLC). The
Appellant further submits that its claim towards PLC claim is in accordance
with the Detailed Procedure as approved by CERC vide order dated
05.05.2017. However, the Impugned Order contains no discussion, analysis,
or finding on the PLC claim.
26. It is admitted on behalf of the Respondent Discom that Revised
Consolidated PPA, entered into between the Appellant and DISCOMs
explicitly provides for part load compensation. The Respondents have further
submitted that PLC pertaining to the previous Control Period has been claimed
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Judgement in Appeal Nos. 27 of 2026
as a part of True-Up process on actuals basis and therefore, no separate
determination was required in the framework of multi-year tariff and ARR vide
Impugned order. It has also been contended that no claim towards PLC had
been raised by the Appellant.
27. We note from the Schedule-F of the PPA dated 16.07.2024 that Monthly
Part Load Compensation is required to be computed in accordance with the
Grid Code as notified by CERC, relevant clause is extracted hereunder:
“1.2.5. Monthly Part load Compensation Charges: Monthly Part
Load Compensation Charges shall be computed in accordance with
CERC (Indian Electricity Grid Code) (Fourth Amendment)
Regulations, 2016, notified on 6th April 2016, as amended from
time to time.”
28. In the Impugned Order, State Commission has recorded the submissions
of Appellant that it was claiming Part Load Compensation from the Discoms in
terms of Clause 1.2.5 of Schedule-F of the PPA read with Regulation 6.3B of
IEGC (fourth amendment), 2016.
29. In view of these submissions/acknowledgment by Respondents, there
seems to be no dispute with regard to the entitlement of the Appellant for Part
Load Compensation. Accordingly, the Appellant is entitled to part load
compensation in terms of the provision of the PPA executed between the
Appellant and Discom and to claim the same as per Regulation 6.3B of the
IEGC (fourth Amendment) 2016 as amended from time to time.
30. We further note from the Petition filed by Appellant before State
Commission that the Appellant has claimed part load compensation amounting
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Judgement in Appeal Nos. 27 of 2026
to Rs 119,12,56,167 (excluding carrying cost) from the AP Discoms and has
attached letter written to AP Discoms, and Appellant has also asserted that the
said claim was never disputed by the Respondents. However, it is not clear
from the submissions on record whether such an amount has already been
paid or continues to remain outstanding. Since, the issue itself is not under
the dispute, the controversy, if any, appears to be confined only to
quantification and reconciliation of the amount payable/paid, we deem it
appropriate and in the interest of justice to remand the matter to the State
Commission for determination and finalization of the amount payable towards
Part Load Compensation in accordance with the applicable Regulations.
CONCLUSION
In view of above deliberations, two issues are decided as under:
A) Deductions from Variable Charges for shortfall in monthly availability ;
the Impugned order is set aside on this issue and recovery of energy
charges to be enforced strictly in accordance with the applicable CERC
Regulations and the stipulations contain in the PPA. The Respondents are
directed to refund the amount deducted/withheld from the energy bills along
with applicable carrying cost in terms of Regulation within the period of four
weeks from the date of this judgement.
B) Part Load Compensation; Issue is remanded to the State Commission for
determination and finalization of part load compensation to the Appellant in
terms of Regulation 6.3B of the IEGC (fourth Amendment), 2016, as
amended from time to time, read with the provision of PPA executed
between the Appellant and Discom
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The Captioned Appeals along with pending IAs, if any, stand disposed of in above
terms.
rd
PRONOUNCED IN THE OPEN COURT ON THIS 03 DAY OF JULY, 2026.
(Virender Bhat)
Judicial Member
(Seema Gupta)
Officiating Chairperson
REPORTABLE / NON-REPORTABLE
_________________________________________________
Pr/dk/ag/ak
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