On May 30, 2025, the Appellate Tribunal for Electricity delivered its judgment in a group of appeals filed by Adyah Solar Energy Private Limited. These appeals were against orders passed by the Karnataka Electricity Regulatory Commission (KERC) dated June 15, 2021. The case concerns a solar project developed in Karnataka under the 1,200 MW Pavagada Solar Park initiative. Adyah, a special purpose vehicle of Renew Solar Private Limited, had executed a Power Purchase Agreement (PPA) with Bangalore Electricity Supply Company Limited (BESCOM) on April 20, 2018, which was later approved by KERC.
The core dispute began when the Government of India imposed a safeguard duty on the import of solar modules on July 30, 2018. This change in tax policy led to an increase in both capital and recurring costs for Adyah. According to the PPA, any such change in law entitles the affected party to relief, and Adyah accordingly filed petitions seeking compensation for this additional expenditure, including the safeguard duty and associated Integrated Goods and Services Tax (IGST), as well as carrying cost (interest on the additional working capital).
KERC accepted that the safeguard duty constituted a change in law under the PPA but denied relief on several counts. The Commission disallowed compensation for additional modules beyond what was contractually necessary to meet the minimum committed energy of 69.076 million units (MU) at a minimum CUF (Capacity Utilization Factor) of 15.76%. The Tribunal found this approach restrictive, especially since the appellant had declared a CUF of 27.76% and had installed additional modules before the Commercial Operation Date (COD) to meet this higher efficiency.
The Tribunal referred to its earlier rulings in the Nisarga and Parampujya Solar cases, which had established that developers could install additional modules to enhance output and are eligible for compensation under the change in law provisions if such modules were installed before COD. The Tribunal ruled that BESCOM had benefited from the additional power generated at lower tariffs and hence could not refuse compensation based on technical interpretations of the PPA. The doctrine of approbate and reprobate was cited to emphasize that BESCOM could not accept benefits and then reject related obligations.
Regarding the carrying cost, the Tribunal acknowledged that while the Supreme Court has stayed the enforcement of carrying cost claims in similar matters, the appellant was still entitled to receive it as per contractual provisions. The Tribunal directed KERC to compute carrying costs from the date of incurrence until reimbursement, but the payment remains subject to the Supreme Court’s decision in the pending civil appeal.
Another issue raised was the calculation of incremental tariffs. Adyah argued that compensation should be based on the actual energy generated and not just on the minimum contracted amount. However, the Tribunal upheld KERC’s method of computation based on minimum CUF, reasoning it aligned with the contractual obligations.
The final issue was the excess court fee demanded by KERC. Adyah had initially paid ₹5,000 as per the regulatory fee structure for regulatory matters, but KERC insisted on a fee based on 0.5% of the monetary claim. The Tribunal supported KERC’s interpretation, stating that since the case involved monetary compensation, the higher fee was justified.
The Tribunal partly allowed Adyah’s appeals. It directed the respondents to reimburse the safeguard duty and IGST paid for additional modules installed before COD and ordered carrying cost payments to be made once permitted by the Supreme Court. Other aspects of the Commission’s order, including the incremental tariff calculation and court fee assessment, were upheld.
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