Summary
The Haryana distribution utilities challenged concurrent orders of CERC and APTEL granting Adani Power (Mundra) Change in Law compensation for shortfall in domestic coal under the New Coal Distribution Policy, contending that the generator's bid was premised on 70% domestic and 30% imported coal so that relief should be limited to 70% of the linkage, and that the computation methodology departed from the GMR Kamalanga formula. The Supreme Court dismissed the appeal, holding that no document showed a 70:30 bifurcation, that the entire linkage coal of 1386 MW (70% of installed capacity) was admittedly used for the Haryana supply so the restitutionary principle entitled the generator to relief for the whole shortfall against that quantity, and that the utilities, having accepted the GMR methodology before CERC, could not approbate and reprobate.
Issues
- Whether the generator's bid and PPAs were premised on 70% domestic and 30% imported coal, so that Change in Law relief for domestic coal shortfall should be restricted to 70% of the linkage quantity.
- Whether the methodology adopted by CERC for computing Change in Law compensation, based on the GMR Kamalanga order and accepted by the utilities before CERC, could be challenged on appeal.
- What is the scope of interference by the Supreme Court with concurrent findings of expert regulatory bodies under the Electricity Act, 2003.
Provisions considered
- Section 63, Electricity Act, 2003The PPAs were entered into through tariff-based competitive bidding under this provision; the Court examined the bid documents and found no representation of a 70:30 domestic-imported coal split. (¶¶ 4, 29, 30, 31, 44)
- Article 13 (Change in Law) and its restitutionary principle, Power Purchase Agreements dated 7 August 2008Compensation must restore the generator to the economic position it would have occupied had the Change in Law not occurred; denying relief for shortfall of the coal assured under the FSA would be contrary to this principle as applied in Energy Watchdog and Adani Power Rajasthan. (¶¶ 7, 41, 45)
Held
- Courts should be slow to interfere with concurrent decisions of expert bodies like CERC and APTEL unless they ignored mandatory statutory provisions, acted on extraneous considerations or were ex facie arbitrary or illegal. (¶¶ 26, 55)
- No document showed that the generator's bid was based on 70% domestic and 30% imported coal; the executive summary only cited the plant's proximity to Mundra Port, and the MoUs with foreign suppliers were general and merely demonstrated competence to bid. Since the entire linkage coal of 1386 MW was admittedly used for the Haryana supply, it would be unjust to bifurcate that 70% again, and the generator was rightly held entitled to Change in Law relief for the whole linkage quantity and no more. (¶¶ 29, 30, 31, 33, 34, 35, 36, 39, 40, 41, 42, 44, 46)
- Having told CERC that the methodology in the GMR Kamalanga case was acceptable and not objected to the calculation, the utilities, as State instrumentalities, cannot approbate and reprobate by challenging that methodology after final orders. (¶¶ 49, 50, 51, 52, 53)
- The questions of computing shortfall relief on actuals against 100% of the normative requirement under NCDP 2007, of station heat rate and auxiliary consumption as per Regulations or actuals whichever is lower, and of 1 April 2013 as the start date, stand concluded by MSEDCL v. APML. (¶¶ 21, 22, 23, 24)
Result
Appeal dismissed; concurrent orders of CERC and APTEL granting Change in Law compensation for domestic coal shortfall upheld. No costs.