No 'Error Apparent' if Tariff is Trued-Up with Actual Data Despite Initial Lack of Measurement Infrastructure: CERC - 2025-07-16

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CERC Upholds Tariff Order, Rejects Review Plea on Coal GCV Data

New Delhi - The Central Electricity Regulatory Commission (CERC) has dismissed a review petition filed by GRIDCO Limited, affirming its earlier decision on the tariff truing-up for NTPC 's Farakka Super Thermal Power Station. The Commission, in its order dated June 18, 2025, ruled that its reliance on 'as received' Gross Calorific Value (GCV) data for coal, submitted by NTPC for the period of January to March 2014, did not constitute an "error apparent on the face of the record" warranting a review.

The bench, comprising Chairperson Jishnu Barua and Members Ramesh Babu V. and Harish Dudani , held that a conscious decision to use actual data for final tariff truing-up, even if the measurement infrastructure was admittedly lacking at the time, is a matter of merit and not a reviewable error.

Background of the Dispute

The case originated from a CERC order dated April 17, 2023, which finalized the trued-up tariff for NTPC 's Farakka power plant for the 2014-19 period. GRIDCO, a distribution company and a key stakeholder, sought a review of this order on a specific ground: the calculation of Interest on Working Capital (IoWC).

The IoWC is partially determined by fuel cost, which in turn depends on the GCV of coal. Regulations require using the GCV on an 'as received' basis for the three months preceding the tariff period, i.e., January to March 2014.

Arguments from Both Sides

GRIDCO's Contentions:

The review petitioner, GRIDCO, argued that the Commission committed a clear error by accepting NTPC 's 'as received' GCV data for the disputed period. Their primary arguments were: -

Admission of No Infrastructure: NTPC had explicitly stated in its filings that it lacked the necessary infrastructure to measure 'as received' GCV during January-March 2014. -

Questionable Data: The data NTPC eventually submitted showed an abnormally large variation from the 'as billed' GCV, suggesting it was either based on assumptions or related to inferior quality coal. -

Deviation from Methodology: GRIDCO claimed the Commission had deviated from a provisional formula it had prescribed in a 2017 tariff order, which was meant to be used in the absence of reliable 'as received' data.

NTPC 's Rebuttal:

NTPC , the respondent, countered that the review petition was an attempt to re-argue the case and failed to meet the legal standard for a review. They submitted that: - The data was provided in compliance with the 3rd Amendment to the 2009 Tariff Regulations and in response to the Commission's specific directions during the truing-up proceedings. - While the formal methodology for GCV measurement was clarified later in 2016, NTPC had commenced manual sampling and hosted the data on its website as required. - Using actual submitted data for a final truing-up is more appropriate than relying on an interim, provisional formula.

Commission's Analysis and Decision

The CERC systematically analyzed the arguments and concluded that no grounds for review were established. The Commission's reasoning rested on several key points:

Conscious Decision, Not an Error: The Commission clarified that its decision to use the data submitted by NTPC was deliberate. In the impugned order, it had rejected NTPC 's alternate proposal to use an average GCV from a later period (2016-19) and instead opted for the data corresponding to the actual reference period (Jan-Mar 2014). The judgment highlighted this as a considered application of regulatory principles.

Truing-Up Corrects Provisional Arrangements: The Commission noted that the use of a formula based on 'as billed' GCV in the original 2017 tariff order was a provisional measure. The very purpose of a truing-up exercise is to replace such provisional figures with actual data. The judgment stated, "There is also no change in the methodology at the time of truing up of tariff... the provisional GCV value of coal... was corrected at the time of truing up of tariff by considering the ‘as received’ GCV of coal for the said three months."

High Bar for Review: Citing the Supreme Court in Parsion Devi Vs. Sumitra Devi , the Commission reiterated that a review is not an appeal in disguise. An error must be self-evident and not one that requires a detailed process of reasoning to uncover. The Commission found that GRIDCO's arguments were essentially a disagreement with the merits of the decision, not an identification of a patent error.

Consistency with Precedent: The CERC also noted that it had recently rejected a similar review petition (Petition No. 12/RP/2024) filed by GRIDCO on the same issue concerning another NTPC power station.

Final Order

The Commission disposed of the review petition, holding it to be not maintainable on merits. The decision reinforces the principle that a regulatory body's considered choice to rely on actual data furnished by a party during a final truing-up process, in place of a previously used provisional methodology, does not in itself constitute a reviewable "error apparent on the face of the record."