Tariff determination for hydro projects with enhanced capacity, binding nature of prior PPAs on successors, and writ jurisdiction limited; exclusive domain of regulatory commission, not courts, to fix composite tariffs per regulations.

JUDGMENT :

G.S. Sandhawalia, C.J.

Challenge by the appellant-Himachal Pradesh State Electricity Board Ltd. (hereinafter referred to as ‘the appellant-Board’) in the instant Letters Patent Appeal, is to the judgment dated 10.09.2024, rendered by the learned Single Judge in CWP No.7177 of 2024, titled Kundan Hydro (Luni) Private Limited vs. State of Himachal Pradesh through its Addl. Chief Secretary (MPP & Power) & anr., whereby the writ petition filed by the petitioner-Kundan Hydro (Luni) Private Ltd-respondent No.1 herein has been allowed by quashing impugned communication dated 16.07.2024 (Annexure P-13) holding the Power Purchase Agreement (for short the "PPA") dated 31.05.2000 executed between appellant-Board and "SPML” not binding upon it being unenforceable against it. The appellant-Board was directed to execute a "PPA" with the writ petitioner-Power Company in respect of the entire Project capacity of 4.50 MW at the "HPERC Regulations- 2017" determined tariff applicable as on Scheduled Commercial Operation Date of the Project in accordance with law and complete all codal formalities in furtherance thereof without unnecessary delay. In order to avoid loss of electricity generated at the Project, it was ordered that till the determination of tariff as on the date of commissioning of the Project by the "HPERC Regulations-2017" in terms of direction supra, the petitioner-Hydro Company was permitted by the respondents to sell the electricity generated from its Power Project to third parties after adjusting the free power supply to the respondents in accordance with law.

Reasoning of the learned Single Judge:

2. The learned Single Judge had allowed the writ petition primarily on the ground that the "PPA" dated 31.05.2000 (Annexure P-14) had been executed between the Board and "SPML” and therefore was not binding upon the petitioner and could not be enforced. The necessary directions thus came to be issued to execute the "PPA" in respect to the entire Project capacity of 4.50 MW at the HPERC (Promotion of Generation from Renewable Energy Sources and Terms & Conditions for Tariff Determination) Regulations, 2017 as on Scheduled Commercial Operation Date. It was further directed that the determination of tariff shall be as on the date of commissioning of the Project by the "HPERC Regulations-2017" in terms of direction No.(iii), the petitioner was permitted by the respondents to sell the electricity generated from its Power Project to third parties after adjusting the free power supply to the respondents in accordance with law.

3. Principally, the reasons which weighed with the learned Single Judge were that both the Implementation Agreement (IA) and the "PPA" dated 31.05.2000 for the 3.00 MW was an agreement which provided specific terms for execution of separate Agreement for purchase of power generated which was to be done within three months. The petitioner-Company was not a party to the said Agreement and the assignment could only be done as per Article 15.10 by written Agreement and the petitioner was not a successor to be bound by it and therefore have come into the picture only later on 25.09.2004 (Annexure P-3) by virtue of Tripatite Agreement executed by "SPML” and respondent No.1-State. The separate "PPA" was required to be executed which was not done a