Facts
The Appellant, operator of the Baspa-II (300MW) hydroelectric project, sought a declaration that notifications increasing the mandatory minimum water discharge from 5 cusecs to 15% of the minimum inflow (~0.72 cumecs) constituted a "Change in Law" event under the Power Purchase Agreement (PPA)
Source reference: p. 2, para. 1In the impugned order dated 28.09.2021, the Himachal Pradesh Electricity Regulatory Commission (HPERC) recognized the Change in Law but denied tariff adjustments
Source reference: p. 3, para. 3HPERC reasoned that actual energy generation had exceeded the "Design Energy" (DE) specified in the PPA, meaning no financial loss was incurred
Source reference: p. 3, para. 3During the pendency of the appeal, a subsequent HPERC order dated 01.04.2025 directed the Central Electricity Authority (CEA) to reassess the project's DE for the 2024–2029 control period due to historical over-generation
Source reference: p. 5-7, para. 8Issues
1. Whether there is an increase in the minimum discharge obligation of the project as a result of a Change in Law
Source reference: p. 2, para. 22. Whether the Petitioner is entitled to a revision of energy charges/tariff adjustment on account of the increased mandatory water release, particularly regarding the reduction of saleable design energy from January 2021
Source reference: p. 3, para. 2-3Law Applied
The Tribunal applied Clause 20.21(b)(ii) of the Power Purchase Agreement (PPA), which defines "Change in Law" events and the subsequent entitlement to financial compensation or tariff adjustment
Source reference: p. 3, para. 3Procedurally, the Tribunal relied on the regulatory principle that the Central Electricity Authority (CEA), having originally accorded Techno-Economic Clearance (TEC), is the competent technical body to compute and revise "Design Energy" based on hydrological data and statutory environmental mandates
Source reference: p. 5, para. 8Reasoning
The Commission had initially denied relief because the project's actual generation was higher than the PPA's Design Energy, concluding no impact on cost
Source reference: p. 3, para. 3However, the Appellant argued that the net saleable design energy for tariff calculation should be reduced (from 1213.18 MUs to 1028 MUs) to reflect the higher water discharge obligation
Source reference: p. 3-4, para. 4The Tribunal noted that HPERC itself, in a later proceeding, had acknowledged that the project’s hydrological series needed review and had referred the matter to the CEA for the 2024–2029 period
Source reference: p. 5-6, para. 8The Tribunal reasoned that since a technical assessment by the CEA was already mandated for future years, the same expertise should be applied to determine the specific impact of the Change in Law on Design Energy and net saleable energy retrospectively from January 2021
Source reference: p. 7-8, para. 12-13Holding
The Tribunal set aside the impugned order regarding Issue No. 2
It directed the CEA-constituted committee to analyze past hydrological data and compute the impact of the Change in Law on the project’s Design Energy and net saleable energy effective from January 2021
Source reference: p. 8, para. 13The committee must submit its report to the CEA and the Commission within three months, following which the Commission shall determine the consequential tariff adjustment/relief
Source reference: p. 8, para. 13-14The appeal was disposed of with directions to the Directorate of Energy (HP) to provide all necessary records to the CEA within 15 days
Source reference: p. 8, para. 15-16Original Court PDF
M/s JSW Hydro Energy Limited v. Himachal Pradesh Electricity Regulatory Commission & Anr. [Appeal No. 327 of 2021 & IA No. 1237 of 2025.]
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