Central Electricity Regulatory Commission: The present petition was filed under Section 79(1)(b) read with Section 79(1)(f) of the Electricity Act, 2003, seeking adjustment of tariff on account of change in law and force majeure events affecting the project during the operating period to restore the petitioner, DB Power Limited, to the same economic position as the events had not occurred in terms of the Tamil Nadu Generation and Distribution Corporation Limited (‘TANGEDCO’) Power Purchase Agreements (‘PPA’). The three-member Bench of Jishnu Barua (‘Chairperson’), Ramesh Babu V (‘Member’), and Harish Dudani (‘Member’) disposed of the present petition to the extent of remand made by the Appellate Tribunal for Electricity (‘APTEL’) in its judgment dated 25-7-2023.
Background
The petitioner, a generating company, had set up a 1200 MW (2 x 600 MW) coal-based thermal power station at village Badadraha, District Janjgir Champa in the State of Chhattisgarh. For the supply of power from its Project, the petitioner entered into the PPA with Rajasthan Discoms for the supply of 250 MW.
The Commission disallowed claims regarding station heat rate (‘SHR’) and carrying cost following which, the petitioner challenged the order. The APTEL, vide its judgment dated 25-7-2023, set aside the challenged order and remanded the matter to the Commission for determination of the compensation which the petitioner was entitled to towards actual station heat rate, subject to the SHR prescribed in the applicable Tariff Regulations and for re-examination of the issues pertaining to carrying cost, and increase in VAT, Entry Tax, Niryatkar on account of increase in various levies such as NMET, and DMF, etc.
Analysis, Law, and Decision
The issues decided in the present case were as follows:
Issue 1 – Increase in VAT, Entry Tax, and Niryatkar on account of the increase in various levies such as NMET, DMF, etc.
The Commission held that the petitioner shall be eligible to recover the additional expenditure incurred towards the consequential increase in VAT, Entry Tax, and Niryatkar on account of increase in the underlying taxes and duties on which the VAT, Entry Tax, and Niryatkar were computed provided these taxes and duties were recognised as change in law. Further, the consequential increase in VAT, Entry Tax, and Niryatkar on account of introduction/increase in rates of levies such as NMET, DMF, etc., which was recognized as a change in law, would be recoverable from the respondent.
Issue 2 – Station Heat Rate
The Commission observed that the petitioner had claimed a revised differential compensation of Rs 19,41,81,854 which include components such as National Mineral Exploration Trust (NMET), District Mineral Foundation (DMF), Chhattisgarh Development Tax, Chhattisgarh Environment Tax, Clean Energy/Environment Cess, Service Tax/GST on Transportation, and undersupply of coal from SECL. Further, the Commission noted that the respondent did not contest the claim or the methodology adopted by the petitioner, thus the claim was found to be admissible.
Issue 3 – Carrying Cost
After taking into consideration the observations of APTEL in Essar Power Gujarat Ltd. v. Gujarat ERC, Appeal No. 842 of 2023, dated 16-4-2025, and the fact that the actual interest rates on the working capital arranged by the petitioner was lower than the LPS rates, the Commission permitted the petitioner to claim the carrying cost at the actual rate of interest on the working capital arranged by the petitioner. Further, regarding the simple or compound interest and frequency of rests in case of compound interest, the Commission stated that they should be in line with the applicable interest on working capital arranged by the petitioner.
The Commision held that the parties shall reconcile the petitioner’s entitlement to the various compensation allowed by the present order, including the carrying cost.
[DB Power Ltd. v. PTC India Ltd., Petition No. 229/MP/2016, decided on 15-7-2025]
Advocates who appeared in this case:
For Petitioner: Deepak Khurana, Advocate and Nishtha Wadhwa, Advocate
For Respondents: Anusha Nagarajan, Advocate and Swapna Seshadri, Advocate
