The Uttar Pradesh Electricity Regulatory Commission (UPERC) has clarified how interest should be calculated on financial adjustments under the Captive and Renewable Energy Generating Plants (CRE) Regulations, 2024. The order was issued by a bench comprising Chairman Arvind Kumar and Member Sanjay Kumar Singh while disposing of Petition No. 2364 of 2026 filed by Uttar Pradesh Power Corporation Limited (UPPCL).
The petition sought clarification on Regulation 16 of the CRE Regulations, 2024, which deals with energy accounting and billing. The regulation provides that any over-recovery or under-recovery of charges made during the period when provisional tariffs were in force must be adjusted after the final tariff is determined. It also requires simple interest to be applied to such adjustments at the prevailing Bank Rate as on April 1 of the relevant financial year.
UPPCL requested the commission to specify the exact date from which this interest should be calculated. The utility asked whether interest should begin from the date of bill issuance, the date of bill presentation, or the final due date for payment. According to UPPCL, the absence of a clear provision could lead to disputes with renewable energy generators during billing and settlement.
The issue arose because the earlier CRE Regulations, 2019, expired on March 31, 2024. To ensure continuity, UPERC had issued a suo motu order in May 2024 allowing the tariffs applicable for FY 2023-24 to continue on a provisional basis from April 1, 2024. This arrangement remained in force until the CRE Regulations, 2024, were officially notified on October 17, 2025. Once the new regulations came into effect, utilities and generators were required to calculate the tariff differences and settle the outstanding amounts with applicable interest.
During the hearing held on June 9, 2026, UPPCL informed the commission that the petition was intended to establish a uniform accounting methodology across Uttar Pradesh and was not related to any individual dispute. The commission observed that the Power Purchase Agreements (PPAs) signed with bagasse-based generating companies contained different provisions regarding billing timelines, payment schedules, rebates, and Late Payment Surcharge (LPS).
Following the commission’s directions, UPPCL submitted sample PPAs signed with several sugar mills and renewable energy generators. These included agreements with Kisan Sahakari Chini Mills, Upper Ganges Sugar & Industries, DSM Sugars, U.P. State Sugar Corporation, Dhampur Sugar Mills, Avadh Sugar and Energy, and Gobind Sugar Mills. The commission found significant differences among these contracts, with payment periods varying from 30 days to six months and different rates of surcharge for delayed payments.
After examining the regulations and contractual provisions, UPERC ruled that interest on over-recoveries and under-recoveries under Regulation 16 must be calculated from the due date of payment mentioned in the respective bill or invoice as specified in each generator’s PPA. The commission also directed the State Load Despatch Centre (SLDC) to upgrade its software systems to support energy scheduling and banking for generators connected directly to the distribution network. The software enhancement was ordered to be completed by March 31, 2026.
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