Regulatory Developments in Power Generation Sector: April 21, 2025

The Commission admitted Rs 79.61 crore in additional capitalisation, subject to prudence checks. MPPGCL also sought approval for Rs 218.57 crore in other charges (including water charges and chemicals) and Rs 176.41 crore for fly ash transportation expenses, which were accepted based on actual audited accounts.

MPERC directed MPPGCL to recover the true-up gap in six equal monthly installments. The order also noted delays in submission of audited accounts and supporting documents by MPPGCL, urging timely compliance in future filings to avoid procedural lags.

Petition No: 76 of 2024 | Read the full order here.

UPERC approves UPPCL’s revised 1,843.68 MW allocation from Ghatanpur TPS

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved Uttar Pradesh Power Corporation Limited’s (UPPCL) revised allocation of 1,843.68 MW from the 1,980 MW Ghatanpur Thermal Power Station (3×660 MW), following a Ministry of Power (MoP) directive restoring Uttar Pradesh’s 93.11% share. This revision replaces the earlier allocation of 1,487.28 MW.

The decision follows delays in equity acquisition by the Assam government, which was to purchase a 20% stake in NUPPL (Neyveli Uttar Pradesh Power Limited), the plant operator. As of now, Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) is finalizing Assam’s equity valuation.

Unit-1, commissioned in December 2024, is currently delivering 93.11% of its output to UPPCL as scheduled by UPSLDC, with the remaining 6.88% distributed among states like Rajasthan and Uttarakhand as per NRPC allocation.

UPERC’s order aligns with its October 2023 directive requiring fresh petitions for allocation revisions. The Commission also directed UPPCL to submit updates on Assam’s equity transfer before the commissioning of Unit-3, expected in December 2025.

Petition No: 2182 of 2025 | Read the full order here.

UPERC approves Rs 5.05 crore truing-up claim by Dhariwal Infrastructure for FY24

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has approved a Rs 5.05 crore truing-up claim filed by Dhariwal Infrastructure Limited (DIL) for additional costs incurred due to ‘Change in Law’ events during FY 2023–24. The order, issued on 15 April 2025, follows a directive under UPERC’s earlier decision dated 29 May 2020, which had established a framework for such claims.

DIL sought compensation for increased statutory charges, including a rise in the Chhattisgarh Environment Cess (from Rs 7.50 to Rs 11.25 per ton), adjustments in Development Cess, and removal of duties like excise and central sales tax. The company demonstrated that the cumulative impact exceeded the 1% threshold of the Letter of Credit value, justifying the claim under the power purchase agreement (PPA).

Noida Power Company Ltd (NPCL), the respondent, had already disbursed Rs 4.95 crore after deducting a 2% rebate. With this payment made, UPERC noted that no additional amount was due. The Commission rejected NPCL’s proposal to defer such adjustments until the end of the PPA period, citing the need to avoid undue carrying costs for generators.

The ruling upholds the annual reconciliation mechanism established in 2020 and will continue to apply during the FY 2024–29 tariff period.

Petition No: 2116 of 2024 | Read the full order here.

CERC trues up Pragati-III gas plant tariff for 2014–19 

The Central Electricity Regulatory Commission (CERC) has issued its final true-up order for the 1371.2 MW Pragati-III Combined Cycle Power Station (CCPS) operated by Pragati Power Corporation Limited (PPCL), revising the capital cost and annual fixed charges for the 2014–19 tariff period.

The order follows detailed scrutiny of PPCL’s claims for additional capital expenditure (ACE) and component upgrades. CERC admitted a revised opening capital cost of Rs 3,84,562.93 lakh as of April 1, 2014, which included revised figures from a prior review order. PPCL sought approval for Rs 75,585.80 lakh in additional capitalisation across the five years, primarily citing restoration and upgrades of gas turbines after a catastrophic failure of GT-I in 2015.

While CERC admitted several claims—such as bought-out items and capitalization of pending works from the original scope—it rejected substantial costs related to turbine upgrades in GT-1, GT-2, GT-3, and GT-4, citing absence of third-party verification or test reports. Notably, the Rs 33.98 crore for GT-I and Rs 45.32 crore for GT-II upgrades, which included advanced monitoring systems, were not allowed except for Rs 80 lakh toward a Historian system already approved in a previous tariff order.

Capital spares beyond the regulatory ceiling for gas-based plants (4% of project cost) were also curtailed. Initial spares were capped at Rs 16,679.25 lakh, with only Rs 7,920.51 lakh of new spares admitted, over and above the Rs 8,758.74 lakh already capitalised before 2014.

Discharge of liabilities was allowed for works within the original scope. However, claims for additional assets post cut-off date lacked regulatory justification and were largely disallowed.

CERC directed PPCL to provide better documentation in future tariff filings, particularly for post-scope enhancements. 

Petition No: 361/GT/2020 | Read the full order here.

WBERC allows APNRL to recover Rs 1.06 billion from WBSEDCL for FY23

The West Bengal Electricity Regulatory Commission (WBERC) has allowed Adhunik Power & Natural Resources Ltd. (APNRL) to recover Rs 1.06 billion from the West Bengal State Electricity Distribution Company (WBSEDCL) for FY 2022–23. The decision, issued on March 28, 2025, followed a review under the Fuel & Power Purchase Cost Adjustment (FPPCA) and Annual Performance Review (APR) mechanisms. It addressed fuel cost discrepancies, operational metrics, and capital expenditures related to APNRL’s 540 MW coal-based thermal power plant in Jharkhand.

WBERC reduced APNRL’s admissible fuel cost to Rs 1.38 billion from the claimed Rs 1.83 billion. The reduction was due to coal procurement at higher-than-approved prices from vendors such as Agrawal Coal Limited. The Commission also revised the gross calorific value (GCV) of coal and capped transportation costs to normative levels.

APNRL’s Plant Availability Factor (PAF) was 83.95%, below the 85% norm, which led to a Rs 52.1 million disallowance in capacity charges. However, WBSEDCL gained Rs 8.58 million due to APNRL’s better performance in auxiliary power consumption (8.48% against a 9% norm) and oil usage (0.25 ml/kWh against a 1 ml/kWh norm).

Capital costs were admitted at Rs 3.27 billion. This was after disallowing Rs 221.4 million due to accounting adjustments and Rs 635.6 million related to right-of-use assets. The Commission allowed Rs 1.17 billion in depreciation and capped the return on equity at Rs 275.8 million in line with prudence norms.

The final recoverable amount includes Rs 832.3 million for the FY23 revenue gap and Rs 232.2 million in carrying costs. These were calculated using the State Bank of India’s marginal cost of lending rate (MCLR) plus 250 basis points. WBERC also directed APNRL to improve future disclosures, particularly in interest expenses, coal handling charges, and contractual labour costs.

Petition No: FPPCA-125/24-25 AND APR-127/24-25 | Read the full order here.

WBERC sets tariff for APNRL’s 100 MW supply to WBSEDCL for FY24–FY26

The West Bengal Electricity Regulatory Commission (WBERC) has approved the tariff for Adhunik Power and Natural Resources Limited (APNRL) to supply 100 MW of electricity to West Bengal State Electricity Distribution Company Limited (WBSEDCL) for the fiscal years 2023–24 to 2025–26. The order, issued on March 31, 2025, finalizes charges under the eighth control period, including capacity charges, energy charges, and fuel cost adjustments.

APNRL operates a 540 MW coal-based thermal power plant in Jharkhand and supplies electricity under a long-term Power Purchase Agreement (PPA) with WBSEDCL. The Commission approved annual capacity charges of Rs 1.0466 billion for 2023–24, Rs 1.0249 billion for 2024–25, and Rs 1.0163 billion for 2025–26. These figures are based on an 85% plant availability factor. Energy charges were set at Rs 2.756 per kWh for 2023–24 and Rs 2.129 per kWh for 2024–25 and 2025–26. The approved rates reflect a Rs 0.13 per kWh discount under the SHAKTI coal allocation scheme.

Key matters in the case involved capital cost determination, fuel costs, and operational norms. The Commission reduced the admitted fuel cost for 2023–24 from Rs 14.901 billion to Rs 9.5157 billion. It also capped employee and operational expenses based on regulatory benchmarks. Environmental compliance was noted, particularly ash disposal and the future installation of flue gas desulfurization (FGD), though cost claims related to these were deferred for later assessment.

The tariff will apply from April 1 of each respective fiscal year. Over- or under-recovery will be addressed through annual performance reviews. APNRL is required to submit monthly fuel cost data to WBSEDCL and publish the order summary within the specified timelines.

Petition No: TP-108/24-25 | Read the full order here.

KERC approves tariff revision for KPCL’s power plants for FY 2023–24

The Karnataka Electricity Regulatory Commission (KERC) has approved the final tariff for 19 power stations operated by Karnataka Power Corporation Limited (KPCL) for the financial year 2023–24. The order was issued following KPCL’s petition under the relevant tariff regulations for hydro, thermal, and gas-based plants.

The final approved tariffs reflect station-specific revisions based on audited data. In several cases, the Commission has allowed recovery of the differential tariff amounts already paid under the provisional tariff for FY 2023–24. However, any excess payment made by electricity supply companies (ESCOMs) will need to be refunded with interest at bank rate plus 1%.

KERC clarified that KPCL is required to submit true-up petitions for FY 2023–24 by 30 November 2025, based on audited financials. Tariff changes were computed considering capital cost, return on equity, operation and maintenance expenses, interest on loans, and depreciation, among other components.

For hydropower stations, approved tariffs vary significantly. For instance, the tariff for the Sharavathy Generating Station is now Rs 0.455/kWh, while for Ghataprabha, it is Rs 3.568/kWh. The drastic variation reflects plant-specific capital recovery and operational efficiency.

Thermal plants also saw revised tariffs. The approved tariff for RTPS Unit 1 is Rs 3.921/kWh, and for BTPS Unit 3, it is Rs 4.195/kWh. Gas-based plant tariffs, such as for Yelahanka, were also finalised, with the tariff set at Rs 4.162/kWh.

The revised tariffs are applicable for FY 2023–24 only. ESCOMs must incorporate these final tariffs into their cost computations for power procurement.

Read the full order here.

KERC withdraws 2018 order on group captive power plants

The Karnataka Electricity Regulatory Commission (KERC) has withdrawn its earlier communication dated September 18, 2018, regarding the status of group captive power plants (CGPs). The withdrawal follows the Supreme Court’s order dated October 9, 2023, in Civil Appeal Nos. 8527–8529 of 2009, which upheld the Appellate Tribunal for Electricity’s decision in the Kadodara case.

The 2018 KERC communication had stated that unless a power plant was set up by group captive users themselves, it would not qualify for CGP status. It instructed Electricity Supply Companies (ESCOMs) to verify that such plants were established by group captive users and that electricity consumption complied with Rule 3 of the Electricity Rules, 2005.

The Supreme Court clarified that the term “set up” in Section 2(8) of the Electricity Act, 2003 should not be interpreted narrowly to exclude transferred ownership. It held that under Section 9(1), a person may construct, maintain, or operate a CGP, and these functions need not all be performed by the same entity. Ownership transfers do not disqualify a plant from CGP status if the new owners meet the criteria under Rule 3, including equity ownership and proportional consumption.

Following this interpretation, the KERC has decided to withdraw its earlier directive, bringing it in line with the Supreme Court’s ruling.

Read the full order here.

KERC issues new captive power verification rules 

The Karnataka Electricity Regulatory Commission (KERC) has issued a new procedure for verifying the captive status of generating plants and users within the state, effective from FY 2024–25. This follows the Supreme Court’s decision in Dakshin Gujarat Vij Company Ltd. vs. Gayatri Shakti Paper and Board Ltd., clarifying the interpretation of Rules under the Electricity Act, 2003 and the Electricity Rules, 2005.

The key issue addressed in the order is the verification of ownership and electricity consumption conditions that qualify a generating plant as a Captive Generating Plant (CGP). The Supreme Court held that ownership and consumption requirements under Rule 3 must be maintained throughout the financial year. It upheld the proportionality principle and introduced the concept of a “unitary qualifying ratio” to assess compliance, preventing abuse through disproportionate consumption by minor shareholders.

The Court also clarified that Special Purpose Vehicles (SPVs) owning and operating CGPs are considered “associations of persons” under Rule 3(1)(a), and thus must meet the same ownership and consumption criteria. It ruled that any change in ownership or consumption during the year must be assessed using a weighted average to ensure compliance.

In response, KERC finalized and approved a comprehensive procedure that standardizes data collection, scrutiny, and verification for captive status claims. The procedure will apply to captive energy consumed in FY 2024–25, with monitoring beginning in FY 2025–26. It outlines detailed documentation requirements, assessment formats, and methodology, including how to handle changes in ownership and the role of energy storage systems.

Read the full order here.

GERC allows partial relief to GSECL in tariff review for FY22 and FY24

The Gujarat Electricity Regulatory Commission (GERC) has partially upheld a review petition filed by Gujarat State Electricity Corporation Limited (GSECL), seeking corrections in the Commission’s tariff order dated March 31, 2023. The petition was filed under Section 94(f) of the Electricity Act, 2003, and Regulation 72 of GERC’s Conduct of Business Regulations, 2004.

GSECL raised concerns over the true-up of FY 2021–22 and tariff determination for FY 2023–24. Key issues included the weighted average interest rate, loan additions, energy charges for Bhavnagar Lignite Thermal Power Station (BLTPS), and depreciation for Kadana Hydro Electric Project (HEP).

The Commission rejected GSECL’s claim of an 8.18% interest rate, upholding the previously approved 7.08%, and maintained its position on loan additions, finding no computational errors.

However, GERC admitted to inadvertent omissions in the original order. It revised the energy charges for BLTPS from Rs 2.83/kWh to Rs 3.20/kWh after including previously excluded limestone costs. The Commission also approved Rs 5.53 crore in depreciation for Kadana HEP that was earlier overlooked.

The partial relief corrects certain cost elements but retains the Commission’s stance on financial parameters found to be in compliance with approved norms.

Petition No: 2212 of 2023 | Read the full order here.

AERC approves generation costs and multi-year investment plan with moderate revisions

The Assam Electricity Regulatory Commission (AERC) has released its latest tariff order for the Assam Power Generation Corporation Limited (APGCL), covering the true-up for FY 2023-24, Annual Performance Review (APR) for FY 2024-25, Aggregate Revenue Requirement (ARR) for FY 2025-26 to FY 2029-30, and the generation tariff for FY 2025-26. The order, passed on March 25, 2025, aligns with the newly notified Multi-Year Tariff (MYT) Regulations, 2024.

For the true-up of FY 2023-24, AERC approved an aggregate revenue requirement of Rs 1,249.25 crore against a total revenue realization of Rs 1,198.23 crore, resulting in a net revenue gap of Rs 51.02 crore. The Commission validated APGCL’s fuel and fixed cost claims, including operation and maintenance (O&M) expenses of Rs 177.59 crore, depreciation of Rs 94.26 crore, and return on equity of Rs 85.23 crore. Adjustments were made for auxiliary consumption and plant availability, with approved reductions in fixed cost recovery due to performance shortfalls.

In the APR for FY 2024-25, APGCL projected a total ARR of Rs 1,334.21 crore, with revenues from power sales estimated at Rs 1,273.86 crore. This resulted in a projected revenue gap of Rs 60.35 crore. The performance metrics, such as gross generation of 2,186.72 MU and auxiliary consumption averaging 4.4%, were used to determine cost efficiencies. The Commission considered normative O&M costs, depreciation, and capital charges, along with special repair and maintenance allocations totaling Rs 62.44 crore.

For the MYT control period from FY 2025-26 to FY 2029-30, AERC approved annual revenue requirements growing from Rs 1,314.64 crore in FY 2025-26 to Rs 1,434.88 crore by FY 2029-30. Fuel cost projections remain a dominant component, particularly for thermal stations such as LTPS, LRPP, and NRPP. The approved capital investment plan focuses on life extension, efficiency upgrades, and modernization at stations including KLHEP and LTPS, with funding entirely through equity. Total CAPEX across the control period is estimated at Rs 312.48 crore.

The generation tariff for FY 2025-26 has been moderately revised. For NTPS, the approved tariff stands at Rs 8.13/kWh, with fixed charges of Rs 1.72/kWh and energy charges at Rs 6.42/kWh. For LTPS, the total tariff is Rs 11.37/kWh, reflecting its higher fuel costs and capital servicing needs. KLHEP’s tariff remains low at Rs 2.25/kWh, consistent with hydro generation economics. LRPP and NRPP tariffs are set at Rs 8.28/kWh and Rs 5.64/kWh respectively, factoring in plant efficiency and fuel procurement.

Petition No: 22/2024 | Read the full order here.

AERC approves 500 MW long-term coal power procurement by APDCL

The Assam Electricity Regulatory Commission (AERC) has granted in-principle approval to Assam Power Distribution Company Limited (APDCL) for the long-term procurement of 500 MW of coal-based power. The order, dated April 8, 2025, allows phased procurement—200 MW from FY 2025-26 and 300 MW from FY 2028-29—for a period of 25 years at a tariff of Rs 5.79 per unit.

APDCL cited rising demand from industrial, urban, and rural segments and emphasized the need for stable base-load power, especially during low-hydro periods. The proposal aligns with the Central Electricity Authority’s Resource Adequacy Plan, which prioritizes coal capacity to meet projected demand.

Power will be procured through competitive bidding on the Ministry of Power’s DEEP portal under Section 63 of the Electricity Act, 2003. DB Power Limited was the lowest bidder (L1), offering 125 MW at Rs 5.79/unit. To meet the full 500 MW requirement, APDCL invited L2 to L4 bidders—Jindal India Thermal Power, MB Power Madhya Pradesh, and Adani Power—to match the L1 tariff.

The Commission found the approved tariff to be cost-effective, noting it is lower than NTPC Bongaigaon’s rate of Rs 6.46/unit.

Petition No: 01/2025 | Read the full order here.

APTEL directs GERC to recalculate interest on GST compensation delay for EPGL

The Appellate Tribunal for Electricity (APTEL) has ruled in favor of Essar Power Gujarat Limited (EPGL), ordering the Gujarat Electricity Regulatory Commission (GERC) to reconsider its denial of carrying costs linked to delayed GST compensation. The order requires GERC to recalculate interest payments for the period April 2019 to March 2021.

The dispute stems from compensation under a Power Purchase Agreement (PPA) for additional costs incurred due to the introduction of the Goods and Services Tax (GST). While GERC acknowledged EPGL’s entitlement to compensation, it had denied interest on the delayed payments.

APTEL has now directed GERC to hold a fresh hearing where EPGL can present supporting documents. GERC must assess whether interest should be simple or compound, determine the appropriate rate, and set the compounding frequency. The recalculation process must be completed within four months of the tribunal’s order.

Appeal No. 842 OF 2023 & IA NO. 1826 OF 2024  | Read the full order here.

CERC directs pilot two-shift thermal operations to manage high grid frequency

The Central Electricity Regulatory Commission (CERC) issued an order on 29 March 2025 in Suo Motu Petition No. 2/SM/2025, directing measures to address persistent high grid frequency, including a pilot to operate thermal units in two shifts. The action was triggered by Grid-India’s report citing high frequency operations on 4, 11, and 25 August 2024, when the grid frequency exceeded 50.05 Hz for 26.27%, 33.32%, and 37.97% of the day respectively. These conditions persisted for up to 258 minutes on 25 August.

The Commission identified the key reasons as suppressed demand, over-injection by renewable energy sources, limited hydro flexibility, inadequate intra-state thermal ramping, and lack of down reserves. Notably, multiple thermal generators over-injected to maintain minimum technical load despite being scheduled below that threshold. On 25 August, aggregate over-injection by such generators peaked at 2,248 MW.

CERC also highlighted under-drawal by states and over-injection by renewable generators. Tamil Nadu, for instance, under-drew by up to 2,847 MW during solar hours. Renewable generators exceeded schedules by up to 2,094 MW in individual blocks. At the same time, the Day Ahead Market prices fell to 50 paise/unit, below variable costs of Rs 3–5/unit for many thermal plants, making it commercially unviable for them to sell in the market.

CERC ordered a pilot project for two-shift operation of regional thermal generating stations whose tariffs are regulated under Section 62 of the Electricity Act. NLDC will identify units in consultation with the Central Electricity Authority (CEA) and plant owners, preferably 500 MW rail-fed units. Incentives of 20 paise per kWh will be paid for down reserves during off-bar hours.

NLDC must frame detailed operating procedures within two months and submit performance feedback after six months of pilot implementation. It must also evaluate Primary Response Ancillary Services (PRAS) delivered by renewable energy plants during the high-frequency events and explore automatic generation control (AGC) pilots with renewables.

The Commission also directed its staff to work on energy storage system (ESS) implementation at thermal stations to absorb surplus generation and maintain grid stability.

Petition No: 2/SM/2025 | Read the full order here.

CERC to reconsider pooling of lignite costs for NLC Mine-II Expansion

The Central Electricity Regulatory Commission (CERC), in its 29 March 2025 order in Petition No. 9/RP/2015, was directed to re-examine the pooling of lignite costs from NLC India Limited’s Mine-II Expansion. The order follows the Appellate Tribunal for Electricity (APTEL) judgment dated 3 July 2024 in Appeal No. 49/2016, which partially allowed NLC’s appeal and set aside CERC’s earlier review order dated 21 January 2016.

The case concerns the inclusion of lignite costs from Mine-II Expansion into the pooled lignite price used for calculating energy charges at NLC’s other power stations before the associated TPS-II Expansion was commissioned. The integrated project was sanctioned in 2004, but while Mine-II Expansion began operations in March 2010, the TPS-II Expansion was delayed and commissioned only in July 2015.

In its 2015 order, CERC had permitted cost pooling from the Mine-II Expansion from its commissioning date, considering that its lignite was used in other operational stations. The Commission also directed that incentives earned by NLC for generation above 75% availability at TPS-II Stage-I and Stage-II be refunded to beneficiaries, and profits from surplus lignite sales be shared with them.

NLC filed for review, seeking reversal of these conditions. CERC in 2016 partly allowed the request, modifying only the sharing of surplus sale profits. NLC then appealed to APTEL, which ruled in its favour on the incentive issue but upheld the requirement to share profits from third-party lignite sales.

APTEL emphasized that pooling of Mine-II Expansion costs must align with Ministry of Coal guidelines and CERC regulations. It found no directive from the Ministry permitting such pooling before TPS-II Expansion was commissioned. It held that any enrichment to NLC through early pooling or diversion of lignite must not come at the cost of end consumers.

CERC is now required to pass a fresh order on the pooling of lignite costs under applicable laws, with both NLC and TANGEDCO having submitted written arguments on the remand’s scope and implications.

Petition No: 9/RP/2015 in 68/MP/2013 | Read the full order here.

CERC disposes of THDC’s petition as Khurja STPP power evacuation begins

The Central Electricity Regulatory Commission (CERC), in its order dated 30 March 2025 in Petition No. 497/MP/2024, disposed of a petition filed by THDC India Limited seeking interim connectivity relief for Unit 1 of the Khurja Super Thermal Power Project (STPP). The case became infructuous after the evacuation line became operational.

THDC had sought exemption from obtaining additional connectivity beyond 465.6 MW and approval to evacuate power from Unit 1 through the existing 400 kV Khurja–Aligarh lines, pending commissioning of the LILO (line-in-line-out) of the Aligarh–Shamli 400 kV double circuit line.

Following several hearings, the Commission had allowed temporary scheduling of 194.4 MW over and above the granted GNA (general network access) of 465.6 MW under T-GNA (temporary GNA), valid until 31 January 2025 and later extended.

THDC informed that Unit 1 achieved commercial operation at 00:00 hrs on 26 January 2025, with power being evacuated under the interim arrangement. UPPTCL later confirmed that the LILO had been constructed by Tirwa Transmission Limited under a TBCB (tariff-based competitive bidding) mode and was successfully commissioned on 10 March 2025.

With the new evacuation line operational and power flow underway, the Commission held that the relief sought had been addressed and dismissed the petition as infructuous.

Petition No: 497/MP/2024 | Read the full order here.

For more regulatory updates, read the latest orders covered on Power Peak Digest: Energy Regulatory Updates – Power Peak Digest 

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