Back
Next 
Court Decision
2024-12-18
Subject: Energy Law - Tariff Regulation
The case involves an appeal by M/s. Orissa Power Consortium Ltd. (OPCL) against the
OPCL argued that the OERC had incorrectly applied a CUF of 35% instead of the CERC's normative CUF of 30%. They contended that the tariff should be determined based on the actual capital cost of Rs. 154.84 crores, which includes the cost of transmission infrastructure. OPCL sought a tariff of Rs. 4.76 per kWh, asserting that the OERC's decision was arbitrary and did not adhere to the established CERC regulations.
The OERC maintained that the tariff was appropriately set at Rs. 3.42 per kWh, applying the normative capital cost of Rs. 5 crore per MW and a CUF of 35%. They argued that the higher CUF was justified due to the favorable hydrological conditions in
The court analyzed the arguments presented by both parties and emphasized that the tariff determination must align with the CERC regulations, as the project was commissioned during a period when OERC norms were not in effect. The court found that the OERC's decision to apply a CUF of 35% was inconsistent with its own later determinations, which set the CUF at 30% for subsequent projects. The court criticized the OERC for not providing a scientific basis for the higher CUF and for failing to consider the actual capital costs approved by the State Technical Committee.
The court ruled in favor of OPCL, setting the tariff for the HEP at Rs. 4.76 per kWh, based on a capital cost of Rs. 5 crore per MW, a CUF of 30%, and including the transmission cost of Rs. 23.17 crores. The OERC's previous order was set aside, and the court mandated that the differential amount owed to OPCL be paid, along with any applicable delayed payment surcharges. This decision underscores the importance of adhering to established regulatory frameworks in tariff determinations for energy projects.
No Imminent Threat of Infringement Bars Ex-Parte Injunction in Trademark Suit: Belagavi Principal District Court
12 Feb 2026
Centre Justifies Wangchuk Detention as Ladakh Violence Halting Measure
12 Feb 2026
Court Rejects Selective Arbitration Under Section 21
12 Feb 2026
Family Judge Exposes Weaponized Litigation in Custody Dispute
14 Feb 2026
Centre Notifies Two High Court Chief Justice Appointments
16 Feb 2026
Deep Chandra Joshi Appointed Acting NCLT President
16 Feb 2026
Debunking the Myth That Indians Lack Privacy Concepts
16 Feb 2026
Whose View Is It Anyway? Juniors Uncredited
16 Feb 2026
Private Property Disputes Not Human Rights Violations; HRC Lacks Jurisdiction Under PHRA: Gujarat HC
16 Feb 2026
Tariff modifications in power purchase agreements must comply with regulatory approvals as per Section 86(1)(b) of the Act, ensuring valid determination of electricity purchase prices.
The central legal point established in the judgment is the jurisdiction of the Electricity Regulatory Commission to regulate tariff applicability and ensure fair and non-discriminatory tariff determi....
Regulatory bodies must adhere to established tariff orders and ensure procedural fairness in tariff determinations, allowing affected parties the opportunity to be heard.
Power purchase agreements must be aligned with regulatory frameworks and cannot be enforced if unapproved, particularly regarding classifications impacting fixed charges.
Regulations framed under a statute must not conflict with the provisions of that statute; any such conflicting regulation is deemed ultra-vires.
Point of Law : Section 61 of Electricity Act, 2003 deals with tariff regulations and it empowers Regulatory Commission to specify terms and conditions for determination of tariff.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
