APTEL Orders CESCOM To Pay ₹6.89/kWh Tariff And Refund Deductions In 50 MW Solar Project Case

On May 30, 2025, the Appellate Tribunal for Electricity passed a significant order in Execution Petition No. 16 of 2021 filed by Azure Sunrise Private Limited. The company had approached the Tribunal seeking enforcement of its earlier judgment dated February 28, 2020, in Appeal No. 340 of 2016. Azure Sunrise is a special purpose vehicle of Azure Power India Private Limited, which signed a Power Purchase Agreement (PPA) on January 2, 2015, with Chamundeshwari Electricity Supply Corporation Limited (CESCOM) for a 50 MW solar project in Karnataka.

The dispute began when KREDL, the nodal agency, awarded the solar project to Azure’s parent company, and a PPA was signed between Azure Sunrise and CESCOM. However, both original copies of the PPA were retained by CESCOM for submission to the Karnataka Electricity Regulatory Commission (KERC) and only a scanned version was shared with Azure. Due to the delay in receiving the approved and effective PPA, which was eventually provided on May 21, 2015, the project was delayed by 137 days. Though CESCOM initially granted an extension for this delay, later they sought to reduce the applicable tariff from ₹6.89/kWh to ₹6.51/kWh and imposed penalties, citing KERC’s directions.

KERC, in its order dated December 14, 2016, not only upheld the reduced tariff but also limited the time extension to just 25 days instead of the initially approved 137 days. Azure Sunrise challenged this before the Tribunal, which in its 2020 judgment ruled in Azure’s favor. The Tribunal held that the reduction in time extension, lowering of tariff, and imposition of liquidated damages were not legally sustainable and should be set aside. Despite this clear judgment, CESCOM failed to make payments to Azure at the PPA tariff and continued paying at the lower interim rate of ₹4.36/kWh.

As CESCOM did not implement the judgment, Azure Sunrise filed the execution petition in 2021. It sought payment of ₹89.27 crore as the outstanding amount and ₹29.44 crore as interest, calculated at 1.25% per month, following the late payment surcharge provision in the PPA. Azure also sought a refund of all liquidated damages deducted earlier.

The Tribunal reiterated that the execution court cannot modify or go beyond the terms of the final judgment. It emphasized that CESCOM had neither challenged the 2020 judgment before the Supreme Court nor sought any review or clarification. The Tribunal noted with disapproval CESCOM’s conduct of non-compliance, misrepresentation, and failure to disclose facts during the execution proceedings. It stated that the continued underpayment and non-refund of damages constituted wilful disobedience of the Tribunal’s order.

The Tribunal concluded that Azure Sunrise’s request was well within the scope of the original judgment and deserved full enforcement. It directed CESCOM to pay the differential amount between ₹6.89/kWh and ₹4.36/kWh for all energy supplied from the project’s commissioning date until the effective realization date. CESCOM was also ordered to refund all liquidated damages along with interest and carrying costs within six weeks.

The Tribunal made it clear that if CESCOM failed to comply within the stipulated period, its bank accounts would be attached and the required amount would be recovered from them. With this, the execution petition and any related applications were disposed of.