JSA successfully represented Tata Power’s Mundra Plant (4150 MW) before Central Electricity Regulatory Commission (CERC). On 22nd June 2020, CERC allowed additional capital cost and recurring operational cost to be incurred by Tata Power for retrofitting of FGD, to meet revised emission norms. While CERC allowed the capital cost and operating cost, it denied capital expenditure of over INR 100 Crores and recurring annual operational expenditure by approx. 3.75%.
Tata Power challenged CERC’s Order before APTEL. APTEL vide its Judgment dated 14.05.2024 held that CERC’s deduction is illegal and bereft of any reasoning. Consequently, CERC’s Order was set aside with directions to CERC to consider this issue afresh.
CERC, in remand proceedings concluded that since FGD is installed based on fuel consumption and not merely installed capacity, an increase in capacity of 150 MW without increase in fuel consumption, will not lead to change in FGD configuration. Hence, Tata Power was awarded compensation re. entire capex requirement for installation of FGD for 4150 MW in contrast to the earlier 4000MW. Therefore, the earlier denied capital cost has now been allowed to Tata Power.
CERC’s Order rightly recognizes that Change in Law compensation cannot be reduced arbitrarily on unfounded assumptions. Such compensation must correlate with the technology and equipment concerned so as to restitute the impacted party fully to the same economic position as if the Change in Law did not exist.
JSA’s team led by Abhishek Munot (Lead Partner), along with support from JSA disputes team, including Kunal Kaul (Partner) and Samikrith Rao (Senior Associate), guided in securing a favourable outcome for Tata Power.
Abhishek is a part of Disputes group of JSA and anchors the Regulatory Practice of JSA in Western India. Abhishek handles sector specific commercial litigation, arbitration constitutional & administrative law litigation and regulatory proceedings before statutory authorities, tribunals and courts.