In Brief
Gujarat Urja Vikas Nigam (GUVNL) entered into a Power Purchase Agreement (PPA) with EMCO Limited for purchase of solar power at tariff rates specified in the 1st Tariff Order (Rs. 15/kWh for 12 years, then Rs. 5/kWh), subject to commissioning by 31 December 2011. EMCO failed to commission by the deadline (commissioned 2 March 2012) and did not avail accelerated depreciation benefits. The 2nd Tariff Order (27 January 2012) offered more favourable rates for projects not using accelerated depreciation. EMCO sought to claim the higher tariff. The Court held that the PPA explicitly stipulated that delayed commissioning entitled EMCO only to the lower of the two tariffs. Both the Regulatory Commission and Appellate Tribunal overlooked this crucial contractual provision. The appeal was allowed and the lower orders were set aside.
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