2026 Supreme(Online)(CERC) 194

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
Lanco Kondapalli Power Limited – Appellant
Versus
Andhra Pradesh Power Coordination Committee – Respondent
Petition No. 249/MP/2022

Disputes concerning payment of capacity and energy charges under a power purchase agreement constitute 'tariff disputes' within the exclusive adjudicatory jurisdiction of the regulatory commission. Contractually valid declarations of commercial operation based on performance test results are binding, and capacity charges are payable from such dates.

Headnote:(A) Electricity Act, 2003 - Sections 79(1)(b) and 79(1)(f) - Power Purchase Agreement (PPA) - Tariff dispute - Adjudication jurisdiction - Central Commission has jurisdiction to adjudicate disputes between generating company and distribution licensees regarding interpretation of tariff, billing, and payment obligations - Such matters constitute 'tariff disputes' impacting consumers directly, thus falling under statutory regulatory functions rather than non-tariff disputes referable to arbitration. (Paras 26, 27, 28)

(B) Limitation Act, 1963 - Section 14(2) - Exclusion of time - Period spent in bona fide arbitration proceedings and subsequent disposal by high court must be excluded when computing limitation period for filing petition before regulatory commission. (Paras 21, 22, 23)

(C) Contract Law - Commercial Operation Date (COD) - Declaration of COD - Where PPA stipulates successful performance acceptance testing as the sole requirement for declaration of COD, it does not mandate governmental approval or prior consensus with the purchaser for such declaration; once performance standards are met, the generator is entitled to declare COD regardless of the purchaser’s subsequent grid drawal timeline. (Paras 36, 39, 43)

(D) Specific Performance - Obligation to pay capacity charges - Where PPA requires payment of capacity charges upon COD of generating units, the purchasing entity cannot unilaterally shift COD to a later date to avoid payment, and having continued to accept power under the subsisting agreement's terms, remains liable to compensate for the services rendered based on initial declared COD. (Paras 44, 45, 50, 51)

Facts of the case:
The petitioner, a power generation company, sought payment of capacity charges and interest for the period following the achievement of the commercial operation date (COD) of its project units. The respondents, distribution companies, refused payment, contesting the COD date and citing project delays. Previous legal proceedings established that the claims were not time-barred. The dispute was subsequently transferred to the Commission following statutory reorganisation.

Findings of Court:
The Commission held that the petitioner is entitled to capacity charges from the date of respective unit CODs. It rejected the respondents' attempt to unilaterally designate a later date as the project COD based on their convenience or government orders, as the contract specifically provided for the generator's right to declare COD upon passing performance tests.

Issues: Whether the claims were barred by limitation, whether the Commission or an arbitrator should adjudicate the dispute, and the criteria for determining the project COD and subsequent entitlement to capacity charges.

Ratio Decidendi: All matters significantly impacting the tariff of a generating company are 'tariff disputes' assigned to the regulatory commission's adjudicatory power. Once contractually valid test procedures are followed, the declaration of COD is a function of the generator, and capacity charge obligations commence therefrom.

Result: Petition allowed; respondents directed to pay outstanding capacity charges with interest.