Case Note & Summary
The Supreme Court of India heard appeals from the Madhya Pradesh Power Management Company Ltd. and another against a High Court judgment that directed them to enter into a Power Purchase Agreement (PPA) with M/s Dhar Wind Power Projects Pvt. Ltd. at the higher tariff rate of Rs 5.92 per unit under the Tariff Order dated 26 March 2013. The dispute centered on whether the respondent's wind power project was commissioned before 31 March 2016, as claimed, or after that date. The Government of Madhya Pradesh had issued a Wind Power Project Policy in 2012, and the State Electricity Regulatory Commission issued Tariff Orders setting tariffs for wind energy. The earlier Tariff Order (2013) fixed a tariff of Rs 5.92 per unit for projects commissioned between 1 April 2013 and 31 March 2016, while the later Tariff Order (2016) reduced the tariff to Rs 4.78 per unit for projects commissioned on or after 1 April 2016. The respondent applied for project approval in 2014 and received final approvals in March 2016. It claimed to have commissioned the project on 31 March 2016 and obtained a commissioning certificate from the distribution licensee. However, the appellants disputed this, citing guidelines issued on 18 March 2016 that required verification of actual power injection into the grid before issuing commissioning certificates. Data from the State Load Despatch Centre (SLDC) showed that power was first injected into the grid on 1 April 2016, not before. The appellants refused to enter into a PPA at the higher tariff, leading the respondent to file a writ petition. The High Court allowed the petition, directing the appellants to act under the 2013 Tariff Order. The Supreme Court examined the Tariff Orders and the guidelines, noting that the 2016 Tariff Order explicitly stated it would apply to projects commissioned at 00:00 hrs on 1 April 2016 or thereafter. The Court found that the commissioning certificate was issued without proper verification and that the SLDC data clearly indicated power injection only from 1 April 2016. The Court held that actual injection of power into the grid is the decisive criterion for commissioning, and the respondent's project was commissioned after the cutoff date. Consequently, the respondent was entitled only to the lower tariff under the 2016 Tariff Order. The Supreme Court allowed the appeals, set aside the High Court's judgment, and dismissed the respondent's writ petition.
Headnote
A) Electricity Law - Wind Power Tariff - Commissioning Date - The determination of the applicable tariff for a wind power project depends on the date of actual commissioning, which requires successful injection of power into the grid. The mere issuance of a commissioning certificate without actual power injection is insufficient. The State Commission's Tariff Orders specify that projects commissioned before 00:00 hrs on 01.04.2016 are governed by the earlier tariff. (Paras 1-12) B) Electricity Law - Commissioning Certificate - Validity - A commissioning certificate issued without verifying actual power injection, as required by the guidelines dated 18 March 2016, is not conclusive. The certificate must reflect the actual status of power injection into the grid. The SLDC data showing first power injection on 01.04.2016 indicates that the project was not commissioned before the cutoff date. (Paras 6-8) C) Electricity Law - Tariff Applicability - Control Period - The Tariff Order dated 26 March 2013 applied to projects commissioned during the control period from 01.04.2013 to 31.03.2016. The Tariff Order dated 17 March 2016 applied to projects commissioned on or after 01.04.2016. The first respondent's project, having injected power into the grid on 01.04.2016, falls under the latter tariff. (Paras 2-5) D) Electricity Law - Legitimate Expectation - The principle of legitimate expectation cannot be invoked to claim a higher tariff when the statutory framework and the terms of the Tariff Orders clearly specify the criteria for applicability. The first respondent cannot rely on the erroneous commissioning certificate to claim the benefit of the earlier tariff. (Paras 9-12)
Issue of Consideration
Whether the first respondent's wind power project was commissioned before 31 March 2016 so as to be entitled to the higher tariff of Rs 5.92 per unit under the Tariff Order dated 26 March 2013, or after that date, attracting the lower tariff of Rs 4.78 per unit under the Tariff Order dated 17 March 2016.
Final Decision
The Supreme Court allowed the appeals, set aside the judgment and order of the High Court dated 21 September 2017 and the order in review dated 29 January 2018, and dismissed the writ petition filed by the first respondent. The Court held that the respondent's project was commissioned after 31 March 2016 and is governed by the Tariff Order dated 17 March 2016 at the rate of Rs 4.78 per unit.
Law Points
- Commissioning of a wind power project requires actual injection of power into the grid
- not mere issuance of a commissioning certificate
- Tariff applicable is based on the date of actual commissioning
- The Electricity Act
- 2003 and Regulations empower the State Commission to determine tariff
- The principle of legitimate expectation cannot override statutory provisions.
