In Brief
TANGEDCO refused to pay fixed charges for electricity supplied by Penna Electricity's gas turbine unit from October 2005 to June 2006, arguing the power was "infirm" (pre-commercial operation) and entitled only variable charges. Penna claimed the unit was synchronized and supplied continuous firm power entitled to fixed charges. The regulatory commissions and appeals tribunal agreed with Penna. The Supreme Court upheld this decision, holding that the power constituted firm power because the unit was synchronized and supplied continuously. The Court ruled that the Electricity Act's regulatory framework recognizes unit-wise Commercial Operation Dates, not project-wide dates as the unapproved contract stipulated. Fixed charges were payable despite contractual provisions."
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