Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CERC) 51

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V, Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
KSK Mahanadi Power Company Limited – Appellant
Versus
Southern Power Distribution Company of AP Limited – Respondent
Petition No. 91/MP/2018 | Petition No. 53/MP/2021 | Petition No. 149/MP/2021 | Petition No. 61/MP/2021

Advocates:
Shri Anand K. Ganesan, Ms. Harsha V. Rao, Ms. Aishwarya Subramani, Ms. Sanjukta Das
Shri Sanjay Sen, Shri S. Vallinayagam, Ms. Neha M. Dabral, Shri Ruth Elwin, Shri K. Sudheer, Shri V. Venkateswarulu, Shri K.G. Sreenivasulu

The Central Commission has exclusive jurisdiction to adjudicate disputes concerning tariff under inter-state Power Purchase Agreements and can refer non-tariff disputes for arbitration.

Headnote:(A) Electricity Act, 2003 - Sections 79(1)(b) and 79(1)(f) - Disputes under Power Purchase Agreement (PPA) - The Commission adjudicated claims related to non-payment of tariff and related issues under the PPA, establishing its jurisdiction over inter-state generation and sale disputes. (Paras 19-24, 34-35)

(B) Jurisdiction - The jurisdiction of the Central Commission was upheld, affirming its exclusive authority to regulate tariffs and adjudicate disputes concerning generating companies under PPA, emphasizing the distinction from State Commission laws. (Paras 20-26)

(C) Arbitration - The Commission recommended referral of disputes for arbitration under provisions of the PPA, emphasizing that only disputes related to regulation of tariff are within its direct adjudicatory powers, while non-tariff matters should be referred to arbitration. (Paras 36-40)

Facts of the case:
The Petitioner, KSK Mahanadi Power Company Ltd., claimed wrongful deductions and non-payments from the Respondents (AP Discoms) under various petitions related to the Power Purchase Agreement dated 31.7.2012, after jurisdictional issues were challenged in court.

Findings of Court:
The Central Commission affirmed its jurisdiction over disputes arising out of established PPAs, including tariff claims in inter-state contexts, while mandating arbitration for claims not directly impacting tariff.

Issues: The court addressed whether the Commission had jurisdiction over the disputes raised concerning the past claims under the PPA and the appropriate avenues for resolution, specifically distinguishing between tariff and non-tariff disputes.

Ratio Decidendi: The court found that both statutory provisions and prior jurisprudence mandated that electricity generation and sales involving multiple states fall directly under the jurisdiction of the Central Commission, with the authority to refer non-tariff disputes for arbitration.

Result: Disputes referred to arbitration, except for the termination matter, which was also referred for being classified as non-tariff.

Table of Content
1. background on power purchase agreements (ppas) and parties involved. (Para 1 , 2 , 3 , 4 , 8 , 10)
2. disputes arise from non-payment and unilateral deductions by respondents. (Para 5 , 7 , 9 , 11)
3. procedural history of the petitions and jurisdictional issues. (Para 6 , 12 , 13)
4. court's noted arguments regarding jurisdiction over ppa disputes. (Para 14 , 15 , 16 , 18 , 19)
5. court’s observations on the jurisdiction of the central commission. (Para 20 , 21 , 22 , 23)
6. court’s analytical discussion on the relationship between sections 79 and 86. (Para 25 , 26 , 27)
7. criteria for adjudicating disputes related to tariff vs. non-tariff. (Para 28 , 29 , 30)
8. judgment surrounding the distinction of tariff-related claims. (Para 31 , 32)
9. court's decisions on arbitration for dispute resolution. (Para 33 , 34)
10. conclusion and directions related to arbitration agreement. (Para 36 , 38)

ORDER

Background

The Petitioner, KSK Mahanadi Power Company Ltd. (KSKMPCL), is a company incorporated under the Companies Act, 1956 , and is presently governed by the Companies Act, 2013 . The Petitioner is a generating company within the meaning of Section 2(28) of the Electricity Act, 2003 (the Act) and is in the process of establishing a 3600 MW (6x600 MW) coal-based generating station at Village Nariyara, Tehsil Akaltara, and District Janjgir-Champa, in the State of Chhattisgarh (in short “the project/ generating station”). The Petitioner had commissioned only 1800 MW (3x600 MW) and has entered into a Power Purchase Agreement (PPA) dated 31.7.2012 under the Case-I Medium Term Open Access (MTOA) bid, floated by the erstwhile undivided State of Andhra Pradesh, for the collective procurement of 400 MW of electricity capacity by the Southern Power Distribution Company of Andhra Pradesh (APSPDCL), Northern Power Distribution Company of Andhra Pradesh (APNPDCL), Central Power Distribution Company of Andhra Pradesh (APCPDCL) and Eastern Power Distribution Company of Andhra Pradesh (APEPDCL) (hereinafter collectively referred to as the ‘AP Discoms’). The tariff for the supply of power was adopted by the Andhra Pradesh Electricity Regulatory Commission (APERC) vide its order dated 18.6.2013 in O.P. No. 38/2013, and the supply of power under the said PPA was for a period of three years, i.e. till 15.6.2016.

2. After the enactment of the Andhra Pradesh Reorganisation Act, 2014 and post- bifurcation of the undivided State of Andhra Pradesh, the capacity of 400 MW under the PPA dated 31.7.2012 was divided between the distribution licensees of the newly created State of Telangana (for 215.56 MW) and the distribution companies in the State of Andhra Pradesh (for 184.44 MW). Thereafter, vide the amended PPA agreement dated 19.12.2014, the Respondents, AP Discoms, agreed to purchase the entire 400 MW from the Petitioner for the period from 16.6.2016 till 31.3.2021, on the same terms and conditions, as contained in the PPA dated 31.7.2012. The amended PPA was also approved by APERC vide its order dated 19.8.2015 in O.P No. 3/2015. In addition, the Petitioner has entered into a PPA for the supply of 1000 MW with the UP Discoms on 26.2.2014 and PPA dated 27.11.2013 with TANGEDCO (distribution licensee in the State of Tamil Nadu) for 500 MW under the Case-1 bid in terms of Section 63 of the Act, and the tariff for the same has been adopted by the State Electricity Regulatory Commissions. The Petitioner has also entered into a PPA dated 18.10.2013 with the Chhattisgarh State Power Trading Company (CSPTradeco), towards host state obligatory power supply of 5%/ 7.5% of the net generated power at variable cost, in terms of the Memorandum of Understanding dated 13.2.2008 and the Implementation Agreement dated 13.8.2009 entered into by the Petitioner with the Government of Chhattisgarh.

Petition No.91/MP/2018

3. The Petitioner KSKMPCL, filed Petition No.91/MP/2018 on 16.3.2018, before this Commission, seeking the adjudication of the disputes under the PPA

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2026 Supreme(Online)(CERC) 51

The Central Commission has exclusive jurisdiction to adjudicate disputes concerning tariff under inter-state Power Purchase Agreements and can refer non-tariff disputes for arbitration.

Cases Referred (2)