HSA gets result for renewables in tariff dispute

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HSA

A bench of the Andhra Pradesh High Court headed by the state’s chief justice directed state electricity distribution companies (discoms) in December 2019 to release an undisputed amount of ₹14.5 billion (US$204 million) owed to renewable generation companies (gencos) and clear all admitted liabilities.

The ruling came after renewable gencos including Tata Power, ACME Group and Mytrah challenged an order by a single judge of Andhra Pradesh High Court. The order had directed the state discoms to approach the state regulator, Andhra Pradesh Electricity Regulatory Commission, and seek a revision in the concluded tariff, and meanwhile directed interim payments at ₹2.44/MW to solar gencos and ₹2.43/MW to wind gencos until the final disposal of matters by the state regulator.

HSA Advocates represented Tata Power, ACME and Mytrah in the matter, which was led by senior advocates Sanjay Sen and Sajan Poovayya. “The present dispute is not a simpliciter result of an erroneous administrative decision,” said HSA partner Apoorva Misra. “But it is a consolidated and comprehensive attempt by the Andhra Pradesh government to renegotiate from its concluded contracts and act upon promise.”

The companies complained that they were suffering financial distress and sought pending payments from the state discoms. Contempt proceedings were filed against state discoms for not releasing payments as directed by the High Court. The single judge had previously quashed orders of the Andhra Pradesh state government seeking renegotiation and unilateral reduction of renewable power tariffs in already concluded power purchase agreements.

“The foremost challenge was that of the perception where tariff reduction by the [Andhra Pradesh government and state] discoms was portrayed as an initiative benefiting the consumer,” said HSA partner Shreshth Sharma. “At the same time, private entities were shown to be making windfall gains. Against such odds, the firm has been successful to remove such superficial prejudices.”

The firm was represented by founding partner Hemant Sahai and partners Misra and Sharma along with principal associate Aditya Singh and associate Samarth Kashyap.