Any change resulting in a cost impact on selling electricity constitutes a Change in Law event, entitling affected parties to compensation under PPAs.

JUDGMENT :

(B.R. Gavai, J.)

1. The present appeals challenge the judgment and order dated 28th September 2020 passed by the Appellate Tribunal for Electricity (hereinafter referred to as ‘APTEL’), in cross appeals being Appeal No. 116 of 2019, filed by Maharashtra State Electricity Distribution Company Limited (hereinafter referred to as ‘MSEDCL’), the appellant herein, and Appeal No. 155 of 2019, filed by ADANI Power Maharashtra Limited (hereinafter referred to as ‘APML’), respondent No. 1 herein, thereby challenging the order dated 7th February 2019, passed by Maharashtra Electricity Regulatory Commission (hereinafter referred to as ‘MERC’).

2. The facts, in brief, giving rise to the present appeals are as under:

APML and MSEDCL had entered into four long term Power Project Agreements (hereinafter referred to as ‘PPA’) dated (a) 8th September, 2008 for 1320 MW (hereinafter referred to as ‘1320 MW PPA’); (b) 31st March, 2010 for 1200 MW (hereinafter referred to as ‘1200 MW PPA’); (c) 9th August, 2010 for 120 MW (hereinafter referred to as ‘120 MW PPA’) and (d)16th February, 2013 for 440 MW (hereinafter referred to as ‘440 MW PPA’), pursuant to the competitive bidding process conducted by MSEDCL.

3. APML, being aggrieved by the Change in Law on account of the Ministry of Coal bringing into force the New Coal Distribution Policy, 2013 (hereinafter referred to as ‘NCDP, 2013’), which revised the arrangements prescribed under New Coal Distribution Policy, 2007 (hereinafter referred to as ‘NCDP, 2007’) for supply of coal, had filed a petition being Case No. 189 of 2013, seeking compensation in Tariff on account of Change in Law under the PPAs before MERC. Finally, in the light of the judgment of this Court in the case of Energy Watchdog v. Central Electricity Regulatory Commission and Others, (2017) 14 SCC 80, the said petition, after being remanded by the APTEL, was heard afresh by the MERC.

4. Vide order dated 7th March, 2018, the MERC allowed the claims of APML on account of Change in Law due to changes brought about by NCDP, 2013. APML, thereafter, preferred a review petition, being Review Petition No. 167 of 2018 seeking extension of Change in Law relief for domestic coal shortfall beyond March, 2017 on account of changes introduced by the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (hereinafter referred to as ‘SHAKTI Policy’) which had been released by the Ministry of Power on 22nd May, 2017. As per Clause 6.1 of the SHAKTI Policy, the Appropriate Commission was required to consider the cost of imported/market based e-auction coal procured for making up the shortfall in the domestic coal for pass-through.

5. The MERC dismissed the said review petition. However, liberty was granted to APML to file a fresh petition to seek extension of Change in Law relief for domestic coal shortfall beyond March, 2017 in view of the introduction of the SHAKTI Policy. Subsequently, APML filed a fresh petition, being Case No. 290 of 2018, before the MERC seeking relief in support of Change of Law under the respective PPAs for non-availability/short supply of domestic coal under SHAKTI Policy after March, 2017.

6. The MERC, vide its order dated 7th February 2019, allowed the petition and granted relief for Change in Law due to the promulgation of SHAKTI Policy. However, the relief was directed to be computed on the same methodology and parameters as approved by the MERC vide its order dated 7th March, 2018. Cross appeals were filed before the APTEL by APML and MSEDCL against the aforesaid order.

7. The learned APTEL framed the following five issues for adjudication :