Supreme Court to examine if tariff determined under PPA can be revised

Supreme Court sought the response of Tata Power to an appeal filed against the Andhra Pradesh High Court order which held that tariff determined under long-term PPA cannot be revised by a State ERC

The Supreme Court on Wednesday sought the response of Tata Power to an appeal filed against the Andhra Pradesh High Court order which held that tariff determined under long-term Power Purchase Agreement (PPA) cannot be revised by a State Electricity Regulatory Commission.

A bench comprising Chief Justice D Y Chandrachud and Justice P S Narasimha issued notice to Tata Power Renewable Energy Limited on the appeal filed by Andhra Pradesh Southern Power Distribution Company Limited.

"Issue notice returnable on February 10, 2023. Short written notes of submissions, if any, be filed in the meantime," the bench said.

The power distribution company has in its plea filed through advocate Mahfooz A Nazki said the finding of the high court is ex facie (on the face of it) contrary to the specific provisions of the Electricity Act.

"The High Court has erred in not appreciating that a PPA is not a contract simpliciter as envisaged under the Indian Contract Act, 1872 but is a regulated contract under the Electricity Act," it said.

The high court in its order dated March 15, 2022 held that under no circumstances can the tariff mentioned in a PPA be amended/revised subsequently by the Commission.