The court affirmed that power producers can determine tariffs based on their depreciation benefit status, rejecting the imposition of rates for those availing accelerated depreciation on entities not partaking in such benefits.

JUDGMENT :

SANJAY KUMAR, J

1. Gujarat Urja Vikas Nigam Limited (GUVNL), the appellant in these four appeals, assails the common judgment dated 28.09.2015 rendered by the Appellate Tribunal for Electricity (APTEL), New Delhi, in Appeal Nos. 198, 199, 200 and 291 of 2014. Thereby, the APTEL confirmed the orders dated 13.06.2014, 11.06.2014, 13.06.2014 and 20.09.2014 passed by the Gujarat Electricity Regulatory Commission (GERC), Gandhi Nagar, in Petition Nos. 1239 of 2012, 1221 of 2012, 1241 of 2012 and 1365 of 2013 filed by Green Infra Corporate Wind Private Limited, New Delhi; Vaayu (India) Power Corporation Private Limited, Daman; Green Infra Wind Power Limited, New Delhi; and Tadas Wind Energy Private Limited, Mumbai, respectively, viz., the four contesting respondent companies.

2. By order dated 05.05.2016, this Court requested the GERC to defer its proceedings till the matter was finally decided and disposed of by this Court. This order was passed in view of the fact that, pursuant to the APTEL’s common judgment under appeal, the GERC began hearings for determination of tariff on the petitions filed by each of the four respondent companies. Thereafter, by order dated 03.02.2023, this Court permitted the GERC to proceed with the tariff determination hearings subject to the condition that no final order should be passed without the leave of this Court. We are informed that the hearings before the GERC have concluded but the final orders have not been pronounced owing to the aforestated order.

3. The short issue for consideration is whether the four respondent companies were entitled to approach the GERC for determination of the tariff for procurement of power by GUVNL from their wind energy projects. The GERC answered this issue in their favour and the same stood confirmed by the APTEL. Hence, these statutory appeals.

4. By Order No. 1 of 2010 dated 30.01.2010, passed in exercise of the powers conferred by Sections 61 (h), 62(1)(a) and 86(1)(e) of the ELECTRICITY ACT , 2003 (for brevity, ‘the Act of 2003’), the GERC determined the tariff for procurement of power by distribution licensees, such as GUVNL, from wind energy projects. This order was applicable for a control period of 3 years with effect from 11.08.2009. In consequence, all wind energy projects commissioned during that 3-year control period were covered by this order. One of the factors considered by the GERC for tariff determination thereunder is ‘Depreciation’. In relation thereto, GUVNL and others had pointed out that some of the wind energy projects availed the benefit of ‘Accelerated Depreciation’ as a tax-planning measure and if the same is taken into account, the tariff would reduce drastically, i.e., to about Rs.3.05 per unit, but if it is not taken into account, the tariff would be higher, working out to Rs.3.77 per unit. They, therefore, suggested that the GERC should specify either an average tariff of Rs.3.50 per unit or two different tariffs for wind energy projects - (i) those which are availing the benefit of accelerated depreciation; and (ii) those which are not availing the benefit of accelerated depreciation. They also suggested that the wind energy projects which did not avail accelerated depreciation benefit should be asked to submit affidavits along with supporting documents that accelerated depreciation was not being claimed by them. Upon considering these objections/suggestions, the GERC ruled as follows: -

‘Commission’s Ruling

Depreciation is a