Aptel Nod For CERC Jurisdiction In Case Between AP Discoms, SECI and Others

In an interesting order, the Appellate Tribunal for Electricity (APTEL), has ruled on a dispute between the Andhra Pradesh discoms (Southern Power Distribution Company of Andhra Pradesh and Eastern Power Distribution Company of Andhra Pradesh) and the Central Electricity Regulatory Commission (CERC). The case involved a claim by SECI for GST compensation from the discoms, based on the claims of the respondents, Acme Power and Azure Power as the relevant solar power developers. The order pertained to Appeal nos 210-to 213 brought before the tribunal.

The key issue was the disagreement of the AP discoms with the decision of the Central Commission declaring introduction / implementation of Goods and Service Tax (GST) laws as change in law event and the direction to the Appellants to reimburse the GST charges on a back to-back basis.
The Appellants additionally questioned the jurisdiction of the Central Commission in the matter.

Their basic claim was that the CERC lacked jurisdiction in the matter as two solar power developers (SPD) as respondents in the appeals have set up the solar power plants (SPPs) in the State of Andhra Pradesh and also supplying power within the State. The GST became effective on July 1, 2017, and subsequently, the SPDs had filed a claim for compensation by declaring it a change in law event  in August, 2017. This was accepted by CERC, leading to the disagreement with the discoms view.

SECI itself contended that an order of the Supreme Court that the discoms had cited to make their claim for limited jurisdiction of CERC, applies only in relation to claims of generators after commercial operation date (COD). In this case, that was not the case.

Similarly, the APTEL bench disagreed with the contention of sale of power being limited to Andhra Pradesh, citing clauses in the power sales agreement that specifically allow SECI to sell power to other states in case of default or excess generation.

Thus, in the final order, the Bench put the onus on the discoms to pay up GST compensation based on the claims drawn up by the developers to SECI, and by recognising the PPA with developers and the PSA with the discoms as back to back arrangements, the claims made by SECI on the discoms.

The full order can be accessed here.