In Brief
The Supreme Court held that a tariff incorporated in a Power Purchase Agreement between a power generator and a distribution licensee, though approved by the State Electricity Regulatory Commission, remains subject to the Commission's statutory power to review and modify it. The tariff is a regulatory determination, not a purely consensual contract. Where changed circumstances (such as unexpected infrastructure costs or fuel price increases) occur, the Commission may review the tariff under Section 86(1)(b) of the Electricity Act, 2003, which grants it broad power to regulate electricity purchase agreements. Tariff orders are subject to periodic review under regulatory frameworks and cannot bind parties for the entire contract life. The appeals by the distribution licensee challenging tariff revision orders were dismissed.
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