Railway electrification mandates post-cut-off qualify as Change in Law under PPAs, allowing cost recovery with carrying cost; water rate increases do not, being input costs. Limitation from cost crystallisation; no in-principle future approvals.

ORDER

Jhajjar Power Limited (JPL) owns and operates a 1,320 MW coal-based thermal power plant comprising two units of 660 MW each at Jhajjar, Haryana, supplying power to the State of Haryana and the National Capital Territory (NCT) of Delhi. Uttar Haryana Bijli Vitran Nigam Limited and Dakshin Haryana Bijli Vitran Nigam Limited, the distribution licensees, procure power through the Haryana Power Purchase Centre (HPPC), and Tata Power Trading Company Limited (TPTCL), an inter-State trading licensee, sells power procured from the Petitioner to Tata Power Delhi Distribution Limited (TPDDL) under back-to-back arrangements.

2. JPL has filed the instant petition under Section 79(1)(b) read with Section 79(1)(f) of the Electricity Act, 2003 (hereinafter referred to as “the Act”) inter alia, seeking compensation on account of additional cost incurred/ to be incurred by the Petitioner due to occurrence of certain Change in Law events, namely, (i) electrification of Railway sidings in terms of Railway Electrification Notifications, and (ii) increase in water rates in terms of Notification of Irrigation and Water Resources Department, Government of Haryana, along with carrying cost thereon. It is noted that the Commission, vide order dated 14.2.2022, had disposed of this petition directing the Petitioner to approach the procurers for settlement of Change in Law claims among themselves in terms of the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 (2021 Change in Law Rules) and to approach the Commission only in terms of Rule 3(8) of the 2021 Change in Law Rules. The relevant portions of the said order are as follows:

“3. The matter was heard on 24.1.2022 through video conferencing. During the course of the hearing, learned senior counsel for the Petitioner submitted that the Petitioner had issued the notices regarding the occurrence of the aforesaid Change in Law events to the Respondents. However, there is no agreement/ admission between the parties regarding the aforesaid events being a Change in Law. In fact, the Respondents in their replies to the Petition have already contested the Change in Law claims made by the Petitioner. Thus, the entire matrix of the dispute is already before the Commission in the present case. Learned senior counsel further submitted that at the time of filing of the present Petition on 22.6.2020, the Electricity (Timely Recovery of Costs due to Change in Law) Rules, 2021 (in short 'the Change in Law Rules') were not in existence. The Change in Law Rules have been notified only on 22.10.2021. However, the Commission, in its various recent decisions, has taken a view that the Change in Law Rules are only procedural and, therefore, apply retrospectively. However, the Petitioner having invoked the jurisdiction of the Commission by way of filing the present Petition on 22.6.2020, the law applicable for the adjudication of the Petitioner's claims is that prevailing as on the date of institution of the Petition. It is well settled that the law