UPPCL Challenges PPGCL’s Fuel Cost Claims Before UPERC, Seeks Refund Of Excess Energy Charges

The Uttar Pradesh Electricity Regulatory Commission (UPERC) has begun hearing a dispute between the Uttar Pradesh Power Corporation Limited (UPPCL) and Prayagraj Power Generation Company Limited (PPGCL) over energy charges claimed under their Power Purchase Agreement (PPA). The case, registered as Petition No. 2367 of 2026, concerns the recovery of fuel-related costs charged by PPGCL and whether those claims comply with the terms of the agreement.

The matter was heard on June 4, 2026, before Commission Chairman Shri Arvind Kumar and Member Shri Sanjay Kumar Singh. During the hearing, UPPCL requested the Commission to declare that the additional energy charges claimed by PPGCL under the fuel cost component are not valid under the PPA. UPPCL also asked the Commission to direct PPGCL to refund the excess amount already paid, along with carrying costs. In addition, the utility sought an order restraining PPGCL from raising similar claims in its future invoices.

Counsel representing UPPCL argued that the PPA allows reimbursement only for the actual expenses incurred by PPGCL on the purchase, transportation, and unloading of coal. According to UPPCL, the generator repeatedly submitted invoices for fuel costs without providing the necessary supporting documents required under the agreement. The corporation stated that this made it difficult to verify whether the claimed costs were genuine and in line with the contractual provisions.

UPPCL also referred to an internal audit conducted in 2023, which allegedly found that PPGCL had included certain overhead expenses while calculating fuel costs. According to UPPCL, these expenses should have been treated as operation and maintenance (O&M) costs instead of being included in the weighted average actual cost of coal. The utility argued that such charges were not permitted under the PPA and resulted in excess payments.

During the proceedings, counsel for PPGCL sought six weeks’ time to submit a detailed reply to the petition. The company also raised a preliminary objection regarding the maintainability of the case. PPGCL argued that UPPCL had not identified the specific period to which the disputed invoices relate. As a result, it was not possible to determine the exact financial amount involved in the dispute or respond effectively to the allegations.

After considering the submissions from both parties, the Commission granted PPGCL six weeks to file its reply. It also allowed UPPCL four weeks to submit a rejoinder after receiving PPGCL’s response.

In its order dated June 29, 2026, the Commission scheduled the next hearing in the matter for August 20, 2026. The proceedings will continue after both parties complete the filing of their respective pleadings, allowing the Commission to examine the contractual and financial issues raised in the petition.