The Appellate Tribunal for Electricity (APTEL) has partly allowed cross-appeals filed by Adani Power Ltd. (formerly Udupi Power Corporation Ltd.) and the Power Company of Karnataka Ltd. against a 2020 CERC tariff order for Adani Power’s 1,200 MW Udupi thermal power project.
APTEL allowed full recognition of the seawater return pipeline replacement cost, holding that only 10% salvage value of the old GRP pipeline could be deducted instead of full de-capitalisation. It further directed CERC to reconsider post cut-off-date additional capitalisation claims (such as silt settling chambers, sea water intake reliability works, over-ground piping, sewage treatment plant, chimney treatment, and lifts) under its discretionary powers of relaxation and removal of difficulties.
The Tribunal also held that compensation of ₹3.02 crore paid to fishermen under government directions may qualify as capital expenditure but remanded the issue to CERC for detailed scrutiny. Importantly, it upheld recovery of additional O&M expenses for jetty, external coal handling plant, flue gas desulphurisation systems, and statutory cesses, recognising them as beyond normative allowances.
On the issue of taxation, APTEL ruled that electricity tax on auxiliary consumption constitutes a Change in Law event, entitling Adani Power to reimbursement over and above normative O&M. The Tribunal also corrected the Normative Annual Plant Availability Factor (NAPAF), holding it must be 85% instead of 83%.
Disputes over landed fuel cost and tax on return on equity were recorded as settled between the parties. Both appeals were partly allowed and the matter remanded to CERC for fresh adjudication within six months.
Appearances:
Appellant: Mr. Hemant Sahai; Mr. Nitish Gupta; Ms. Molshree Bhatnagar ;
Respondent: Mr. P. Chidambaram, Sr. Adv.; Mr. Arunav Patnaik; Ms. Bhabna Das for Res. 3 to 7.
