In Brief
Distribution companies challenged orders requiring them to compensate power generators for losses caused by the government's reduction of domestic coal supply guarantees under the New Coal Distribution Policy. The Supreme Court upheld the compensation, finding that the policy change was a 'Change in Law' entitling generators to restitution under their Power Purchase Agreements. The Court held that operational parameters like Station Heat Rate and coal quality (GCV) for calculating compensation must use the lower of actual or regulatory values, not bid-specified values (which are not binding parameters in competitive tenders). GCV shall be measured 'as received' to account for natural losses. The compensation covers the full shortfall in coal supply, not merely the percentages specified in the new policy. Expert regulatory bodies' concurrent findings warrant deference absent manifest unreasonableness.",
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