Him Urja to recover Rs 103.58 crore from UPCL after 15-year Vanala hydro case
The Uttarakhand Electricity Regulatory Commission (UERC) has directed Uttarakhand Power Corporation Ltd. (UPCL) to pay Rs 103.58 crore, including principal arrears and carrying cost, to Him Urja Pvt. Ltd. following the implementation of the Appellate Tribunal for Electricity’s (APTEL) judgment dated September 15, 2025.
The order relates to tariff determination for the 15 MW Vanala Small Hydro Electric Project in Chamoli district, which was commissioned on December 5, 2009. The dispute arose from additional capitalisation claims following natural calamities in 2013 and 2016 and has been under litigation for more than 15 years.
APTEL directions implemented
The Commission’s order gives effect to APTEL’s decision, which had set aside several disallowances made by UERC in its tariff orders dated May 17, 2018 and April 10, 2019. The Supreme Court subsequently dismissed UPCL’s civil appeal against the APTEL judgment on December 16, 2025.
APTEL held that the time overrun in restoration of the project after the 2013 disaster was not attributable to the generator, as the restoration period should be reckoned from the date the site became accessible.
The Tribunal also ruled that salary and wages paid to casual workers engaged specifically for restoration work could not be treated as part of normative operations and maintenance (O&M) expenses. It further held that the Rs 22 crore loan from L&T had been used to service existing debt rather than finance restoration works, requiring revision of the debt-equity ratio.
APTEL also allowed the full payment made to M/s Ramose Infra Pvt. Ltd., holding that the generator’s decision to engage the contractor was prudent. In addition, it granted the generator liberty to seek downward revision of the capacity utilisation factor (CUF) where generation remained below approved levels due to reasons beyond its control.
Commission findings
While implementing the judgment, UERC rejected several objections raised by UPCL, observing that they amounted to attempts to reopen issues already decided by the appellate tribunal.
The Commission restored the capital cost earlier disallowed on account of time overrun and allowed additional capitalisation towards salary and wages amounting to Rs 0.82 crore for the 2013 restoration works and Rs 0.42 crore for the 2016 restoration works.
The debt-equity ratio for expenditure relating to the 2013 calamity was revised from 83:17 to 70:30 after excluding the L&T loan from the project financing. The Commission, however, declined Him Urja’s claim for interest during construction (IDC) of Rs 2.12 crore for the 2013 restoration and Rs 0.35 crore for the 2016 restoration, holding that the restoration works had been financed through internal resources.
The Commission also approved the full payment of Rs 12.24 crore made to M/s Ramose Infra Pvt. Ltd. instead of restricting the payment to the rates quoted by the lowest bidder.
After examining generation data from the commercial operation date through March 2026, UERC held that the project’s lower generation during FY 2011-12 and FY 2012-13 resulted from factors beyond the generator’s control, including grid failures, voltage issues, excessive silt and low water discharge. It accordingly allowed recovery of Rs 7.85 crore for FY 2011-12 and Rs 8.66 crore for FY 2012-13 on account of CUF shortfall.
For carrying cost, the Commission rejected the generator’s claim for interest at 15% per annum under the Power Purchase Agreement (PPA), holding that the amounts had not crystallised during the relevant period. Instead, it allowed carrying cost at 12.75%, equivalent to the interest on working capital prescribed under the Renewable Energy Regulations, 2010.
Payment and revised tariff
The Commission approved total recoveries of Rs 24.81 crore towards principal claims and Rs 78.77 crore towards carrying cost, taking the total amount payable by UPCL to Rs 103.58 crore.
The revised levelised tariff for the project has been fixed at Rs 5.27/kWh with effect from May 2026, incorporating the additional tariff revisions arising from the present order.
UERC directed that the total arrears of Rs 103.58 crore be recovered by Him Urja from UPCL in nine equal monthly instalments commencing from July 2026.
The featured photograph is for representation only.