APTEL Upholds Rejection Of Bhoruka Power’s Tariff Revision For Dadupur Plant, Finding It Failed To Verify The 916-Ft Pond Level Was Achievable

The Appellant developed a 6 MW small hydel project at Dadupur, Haryana, after preparing a DPR that contemplated an FSL of 916 ft and estimated annual generation of 31.5 MU.

The project’s tariff was initially approved in 2007 and revised in 2010, after commissioning, from Rs. 2.80 to Rs. 3.18 per unit for the first 12 years and from Rs. 1.70 to Rs. 1.93 per unit for years 13–15; the revised tariff was upheld in Appeal No. 78 of 2011.

Because seepage affected adjoining land, the Irrigation Department did not maintain the pond at 916 ft, and the Appellant sought a further tariff redetermination based on the lower FSL.

The Haryana Electricity Regulatory Commission dismissed that petition on 18 December 2015, finding inadequate due diligence by the Appellant.

The Appellant appealed.

Under the tariff framework of the Electricity Act, 2003, including Sections 62 and 86, the Commission’s tariff-setting authority operates within the applicable regulations and contractual framework; the Tribunal had previously held in Appeal No. 78 of 2011 that the final tariff could reflect the actual cost of the completed project.

The Tribunal applied the principles that a developer must exercise due diligence in investigating and finalising project parameters, and that an agreed and finally determined tariff cannot be reopened merely to shift project risks to the purchaser or consumers where the PPA does not provide for that adjustment.

It relied on GUVNL v. GERC, Appeal No. 279 of 2013, concerning finality, estoppel and res judicata in relation to an accepted tariff, and Puri Oil Mills Ltd. v. HPPC, Appeal No. 90 of 2013, concerning the developer’s responsibility to assess canal conditions and the limits on reopening a PPA.

The Tribunal distinguished Patikari Power Ltd. v. HPERC, Appeal No. 179 of 2010, because the DPR here was prepared by the Appellant rather than being based on hydrological data supplied by the Discom.

It also relied on Supreme Court authority emphasising the sanctity of PPAs and the limits on altering agreed tariffs.

The Tribunal found that the Appellant had undertaken responsibility under the MoU for further investigations and preparation of the DPR, and that the DPR itself recorded earlier leakage and the inability to achieve the FSL before construction of a new barrage.

It therefore considered the attainable FSL and seepage risks matters that the Appellant should have assessed when finalising the project’s capacity, design energy and financial viability.

The earlier tariff revision had allowed additional expenditure associated with gate and barrage works, but the Appellant had not then sought a revision of design energy due to the unavailable FSL; that tariff order had attained finality.

Further, the PPA contained no term making the tariff conditional on an FSL of 916 ft or requiring the Discom to bear the consequences of its non-availability.

The Tribunal accordingly held that the dispute over FSL did not justify imposing a higher tariff on the Discom and consumers.

Although it examined the additional documents, it found that they neither guaranteed an FSL of 916 ft nor established a basis for tariff relief against the Discom.

It dismissed the appeal and disposed of all pending interlocutory applications.