M/S HYDERABAD MSW ENERGY SOLUTIONS PVT. LTD. vs TELANGANA STATE ELECTRICITY REGULATORY COMMISSION & Anr on 2 September 2026

ORDER

PER HON’BLE MRS. SEEMA GUPTA, TECHNICAL MEMBER IA NO. 890 OF 2024 (interim relief)

1. The present Interlocutory Application has been filed by M/s. Hyderabad MSW Energy Solutions Private Limited (“Appellant”) seeking interim relief in Appeal No. 85 of 2024, filed against the Order dated 02.01.2024 passed by the Telangana State Electricity Regulatory Commission (“State Commission/TSERC”) in O.P. No. 73 of 2022. The dispute in the Appeal, inter alia, relates to the applicability of the threshold Plant Load Factor (“PLF”) to the energy generated and delivered from the Appellant’s 19.8 MW RDF-based Waste- to-Energy Plant at Jawaharnagar, Hyderabad, under the Power Purchase Agreement (“PPA”) dated 19.02.2020 executed with Southern Power Distribution

Company of Telangana Limited (“TSSPDCL/Respondent No. 2”). The generic tariff, applicable to the Appellant’s power project, was determined by the State Commission vide its Tariff Order dated 18.04.2020. The Generation Plant achieved Commercial Operation Date (“COD”) on 20.08.2020.

2. The Appellant had approached the State Commission in O.P. No. 73 of 2022 raising, inter alia, the issue of payment for energy delivered beyond the Normative PLF mentioned in the Generic Tariff Order. The State Commission, vide its Order dated 02.01.2024, rejected the reliefs sought by the Appellant, pursuant to which the Appellant preferred the present Appeal.

3. Appellant has also filed present application seeking following interim reliefs:-

a) Direct Respondent No. 2 to make payment for energy delivered up to the contracted capacity in terms of the PPA dated 19.02.2020;

b) Direct Respondent No. 2 to release the outstanding amounts claimed by the Appellant in the present application;

c) Direct Respondent No. 2 to refrain from imposing the disputed threshold PLF restriction on the energy bills raised by the Appellant till the disposal of the accompanying Appeal;

d) Restrain Respondent No. 2 from taking any coercive action, including restraining the generation of power from the Appellant's 19.8 MW RDF- based Waste-to-Energy Plant and/or preventing the Appellant from selling electricity to third parties, till the disposal of the accompanying Appeal; and

e) Pass such further or other order(s) as this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of the present case and in the interest of justice. SUBMISSIONS URGED ON BEHALF OF PARTIES

4. Learned Senior Counsel for the Appellant submits that the limited issue is whether the normative Plant Load Factor (“PLF”) of 65%, 75% and 80%, adopted by the State Commission in the Generic Tariff Order dated 18.04.2020 for the purpose of determination of the levelised tariff of Rs. 7.84/kWh, can be treated as a ceiling on the quantum of Delivered Energy for which Respondent No. 2 is liable to make payment. According to the Appellant, neither the PPA nor the Tariff Order provides for any such restriction. PPA dated 19.02.2020 expressly governs both, the quantum of energy to be purchased and the manner of payment. Explanation 2 to Article 1.10 provides that the Delivered Energy in a billing month shall be limited to the energy calculated at 100% PLF of the net exportable capacity, after accounting for auxiliary consumption, contracted capacity and operating hours. Article 2.1 obligates Respondent No. 2 to purchase all the Delivered Energy at the Interconnection Point, and Article 2.2 provides for payment at the tariff determined by the State Commission for the net energy delivered. Further, the exclusion contemplated under Article 2.2, according to the Appellant, relates only to energy delivered beyond the contracted capacity and not to energy supplied beyond the normative PLF.

5. It is submitted that Schedule-1 to the PPA records the Project capacity as 19.8 MW, of which 2.178 MW is towards auxiliary consumption and the balance 17.622 MW is available for export to the grid for sale to the DISCOM at the

Interconnection Point. It is, therefore, contended that the exportable capacity stipulated under the PPA is distinct from the normative PLF adopted for the purpose of tariff determination. The interpretation sought to be placed by Respondent No. 2 would render the express reference to 100% PLF in Explanation 2 to Article 1.10 otiose. It is submitted that if payment for energy was intended to cease upon the Appellant achieving the normative PLF of 65%, 75% or 80%, there was no occasion for the PPA to expressly provide for Delivered Energy up to 100% PLF. The Appellant submits that the harmonious construction of the PPA and the Tariff Order is that the PPA determines the quantum of billable Delivered Energy, whereas the Tariff Order determines the applicable tariff.

6. It is submitted by Learned Senior Counsel for the Appellant, State Commission determined generic tariff for Waste-to energy plant under Section 62 based on normative technical and financial parameters. Under Issue No. 4, stakeholders sought an incentive for achieving PLF higher than the normative level, with reference inter alia to the treatment afforded to biomass projects. The State Commission approved normative PLFs of 65%/75%/80% in Para 34 and declined the proposal for any incentive beyond the normative PLF in Para 35. Significantly, however, Para 35 neither states that the tariff would cease once the normative PLF was achieved, nor that electricity generated thereafter would be supplied without consideration, nor that the contractual ceiling of 100% PLF stood substituted by the normative PLFs of 65%/75%/80%. Further, in the operative portion of the Tariff Order, while determining a levelised tariff of Rs. 7.84/kWh for RDF-based projects, the Commission did not prescribe any annual block or quantum of units to which the tariff alone would apply. Thus, the tariff determination contains no quantity cap, and the normative PLF operates only as a normative parameter for tariff determination and not as a ceiling on the quantum

of electricity for which the determined tariff is payable. The rejection of the proposal for an additional “incentive” for generation beyond the normative PLF cannot, in the absence of express words, be construed as overriding the pre- existing contractual arrangement approved by the State Commission. Prior to issuance of the Generic Tariff Order dated 18.04.2020, the Commission had approved the PPA containing Explanation 2 to Article 1.10, which expressly defined Delivered Energy up to 100% PLF and the PPA was executed on 19.02.2020.

7. Learned senior counsel placed reliance on Para 3.3 of the Explanatory Memorandum to the CERC (Terms and Conditions for Tariff Determination from Renewable Energy Sources) Regulations, 2017, which provides that “any generation beyond threshold PLF shall also receive same tariff”, recognising that the risks and costs associated with project sizing, location, etc. are borne by the developer, a principle reflected in the CERC renewable-energy tariff framework since 2009 and consistent with the 100% mandatory procurement regime.

8. The State Commission, in exercise of its adjudicatory jurisdiction under the Impugned Order, could not introduce into the approved PPA a commercial restriction which neither the parties incorporated nor the Commission expressly imposed through the Tariff Order. Further, the reasoning drawn therefrom, that the contractual expression “100% PLF” could not be given its express meaning is also untenable. Learned counsel placed Reliance on “Haryana Power Purchase Centre v. Sasan Power Ltd” (2024) 1 SCC 247, ; “GMR Warora Energy Ltd. v. CERC” (2023) 10 SCC 401, and “Nabha Power Ltd. v. PSPCL’ (2018) 11 SCC 508.

9. Further, the reliance placed in the Impugned Order upon O.P.(SR) No.116 of 2022 is equally unsustainable, since the present proceedings had already been reserved for orders on 04.04.2023, whereas the said order was rendered subsequently on 30.10.2023 and was thereafter set aside by this Hon’ble Tribunal in Appeal No.63 of 2024 and remanded for fresh consideration; significantly, upon remand, the State Commission, by order dated 04.08.2025 in O.P. No.21 of 2024, specifically held, on the basis of actual generation data, that the existing plant had generated 24 MW without augmentation.

10. It is submitted that the clause 6.4 of the National Tariff Policy, 2016 expressly mandates compulsory procurement of 100% of the power produced from all Waste-to-Energy plants at the tariff determined by the Appropriate Commission, which mandate was given regulatory effect by the State Commission through Regulation 3.8 of the RPPO Regulations, 2018 and subsequently Regulation 3(7) of the RPPO Regulations, 2022, requiring Distribution Licensees in Telangana to compulsorily procure 100% power produced from WtE plants. The special and mandatory character of the WtE regime stands further recognized by the Hon’ble Supreme Court in “Municipal Corporation of Delhi v. Gagan Narang & Ors.,” 2025 INSC 2, particularly paras which recognizes the interplay between Section 86(1)(e) of the Electricity Act and the Solid Waste Management Rules, as well as the mandatory 100% procurement regime and the larger public interest served by WtE projects in reducing the burden on landfills and facilitating waste disposal. The statutory, regulatory and policy framework therefore reinforces the contractual interpretation and renders untenable any construction whereby electricity mandatorily procured and accepted by the Distribution Licensee becomes “gratuitous” merely upon crossing the normative PLF. Accordingly, the finding in the Impugned Order treating normative PLF as a ceiling on payment is liable to

be set aside, and Respondent No. 2 ought to be directed to pay the applicable tariff for all Delivered Energy generated beyond the normative PLF and up to 100% PLF of net exportable capacity, in accordance with Explanation 2 to Article 1.10.

11. Per contra, Learned Counsel appearing for Respondent No. 2 submitted that, under Clause 3 of the PPA, the power is to be purchased at the tariff determined by the TGERC, while Articles 2.1 and 2.2 further stipulate that the “Delivered Energy” shall be purchased at the tariff determined by the TGERC from time to time, and the orders of the TGERC are enforceable in their entirety. Article 1.22 of the PPA defines Plant Load Factor (PLF) and specifically provides that the PLF shall be determined by the TGERC . Pursuant thereto, the TGERC, in its Tariff Order dated 18.04.2020, considered the issue of PLF under Issue No. 4 and, after considering the stakeholders’ submissions, approved normative PLFs of 65% for the first year, 75% for the second year and 80% from the third year onwards, while expressly declining the proposal for any incentive for generation beyond the approved PLF. The said determination has attained finality, no party having challenged Issue No. 4, and is consequently binding on the parties. Accordingly, any reference to PLF under the PPA must be understood with reference to the PLF determined by the TGERC, and no deviation therefrom can be permitted.

12. Learned Counsel for Respondent No. 2 places reliance upon the judgment of the Hon’ble Supreme Court in State of U.P. v. Ram Sukhi Devi, (2005) 9 SCC 733, to contend that final relief ought not to be granted at the interlocutory stage. It is submitted that where the grant of interim relief would substantially result in allowing the main Appeal itself, such relief ought not to be granted.

13. It is submitted that the Appellant has selectively relied upon Clause 6.4(2) of the National Tariff Policy, 2016, which requires the Distribution Licensee to procure 100% of the power from WtE plants at the tariff determined by the Appropriate Commission. Respondent No. 2 is strictly complying with the Tariff Order dated 18.04.2020 passed by the TGERC and, consequently, with Clause 6.4(2) of the National Tariff Policy as well as the applicable RPPO obligations within the tariff framework determined by the Commission. Appellant has failed to establish any prima facie case, balance of convenience or irreparable loss or injury warranting interim relief, particularly when Respondent No. 2 is acting strictly in accordance with the binding Tariff Order prescribing the applicable PLF ANALYSIS AND DISCUSSION

14. We have heard Mr Sanjay Sen, Learned Senior Counsel appearing for the Appellant and Mr Rajat Shrivastav, learned counsel for Respondent No 1 and Mr Abhinav Rav, Learned counsel on behalf Respondent No 2 and perused material on record, written submissions filed by parties. The detailed rival submissions and the entitlement of the Appellant to the amounts claimed by it, including the issue relating to applicability of the threshold PLF under the PPA, shall be considered while adjudicating the Appeal on merits. At this stage, the question before us is limited to whether an interim arrangement is warranted during the pendency of the Appeal if yes then what interim arrangement.

15. We also take note that Appellant in its Application for stay in paragraph 3 and 4 have stated that

3. It is pertinent to mention that vide Order dated 21.05.2024, this Hon’ble Tribunal has after extensively hearing the Applicant on the limited issue of applicability of threshold Plant Load Factor (PLF) on the delivered energy under the terms of the PPA dated 19.02.2020, observed that, a prima facie case seems to exist for an interim arrangement to be put in place; however, since the Applicant has not sought expressly any consequential relief in terms of the amount claimed as due, in the event the relief(s) as sought under IA No. 312 of 2024 are allowed, it would be difficult to translate the same in terms of recovery of the amount sought to be claimed by the Applicant.

4. That in view of the above, present Application is being filed seeking relief in terms of a plausible interim arrangement in view of the last hearing dated 21.05.2024. The same is also brought on record vide the present application.

16. It is a matter of concern that the Appellant has sought to rely upon the order dated 21.05.2024 as if it contained an observation regarding existence of a prima facie case for interim arrangement. A plain reading of the said order reveals that it dealt solely with condonation of delay in filing the rejoinder in IA No. 312 of 2014, subject to payment of cost, and no such observation was made. The Appellant’s assertion is therefore factually incorrect. Parties before this Tribunal are expected to exercise due care and accuracy in their pleadings. Any attempt to misstate or misrepresent the record not only misleads the adjudicatory process but also undermines the integrity of proceedings. The Appellant is accordingly reprimanded and cautioned to scrupulously verify the record before making submissions in future, failing which appropriate consequences may ensue.

17. We shall now proceed to deliberate the issue in the present application. The grant or refusal of interlocutory relief is covered by three well established principles viz., (1) whether the Appellant has made out a prima facie case, (2) whether the balance of convenience is in their favour i.e., whether it would cause greater inconvenience to them if interim relief is not granted than the

inconvenience which the opposite party would be put to if it is granted, and (3) whether the Appellant would suffer irreparable injury. With the first condition as a sine qua non, atleast two conditions should be satisfied by the Appellant conjunctively, and a mere proof of fulfilment of one of the three conditions does not entitle them to the grant of interlocutory relief in their favour. (Nawab Mir Barkat Ali Khan v. Nawab Zulfiquar Jah Bahadur, AIR 1975 AP 187; Gone Rajamma v. Chennamaneni Mohan Rao, (2010) 3 ALD 175; Kishoresinh Ratansinh Jadeja v. Maruti Corpn, (2009) 11 SCC 229; Best Sellers Retail (India) Private Ltd. v. Aditya Birla Nuvo Ltd., (2012) 6 SCC 792; State of Mizoram v. Pooja Fortune Private Limited, 2019 SCC OnLine SC 1741).

18. The main issue in this application and the Appeal pertains to the issue whether Appellant is entitled to tariff for the energy generated beyond 65%/75%/80% PLF as mentioned in the Generic Tariff Order. In this context, it is apposite to extract relevant paragraphs of the PPA. 1.10 "Delivered Energy" means with respect to any billing month, the Kilo Watt hours (KWh) of electrical energy generated by the project and delivered to the DISCOM at the interconnection point, as defined in clause 1.18 and as measured by the energy meters at the interconnection point during that billing month at the designated substation of TSTRANSCO or the DISCOM: Explanation 1: For removal of doubts, the delivered energy, excludes all energy consumed in the project, by the main plant and equipment, lightning and other loads of the project from the energy generated and as recorded by the energy meter at interconnection point. Explanation 2: The delivered energy in a billing month shall be limited to the energy calculated at 100% PLF of net exportable capacity that is after deducting capacities for auxiliary consumption from the installed capacity as mentioned in this agreement for sale to DISCOM, based on the contracted capacity in KW multiplied with number of hours and fraction thereof, the project is in operation during that billing month. Whenever generation exceeds by installed capacity such energy delivered into the grid by the

project above 100% PLF during such period shall be considered payment or otherwise in terms of the rules and regulations in vogue. Explanation 3: The delivered energy shall be purchased by the DISCOM at a tariff for that year stipulated in Article 2.2 of this agreement. 1.22 "Plant Load Factor (PLF)" means the ratio of total KWh (units) of power generated by plant in a tariff year, as decided by TSERC and contracted capacity in KW multiplied with number of hours in the same tariff year; ARTICLE 2 PURCHASE OF DELIVERED ENERGY AND TARIFF 2.1 All the delivered energy at the interconnection point for sale to DISCOM (net capacity) will be purchased at the tariff provided for in Article 2.2 from and after the date of commercial operation of the project. Title to delivered energy purchased shall pass from the company to the DISCOM at the interconnection point. 2.2 The company shall be paid the tariff for the net energy delivered at the interconnection point for sale to DISCOM at the tariff as determined by TSERC from time to time. No tariff will be paid for the energy delivered at the interconnection point beyond contracted capacity. The orders of TSERC are enforceable in entirety and shall be considered for the purposes of computation of tariff

19. From the bare reading of these provisions, it appears that delivered energy pertains to the energy delivered at the interconnection point and shall be purchased by the Discom at a tariff determined by TSERC and no tariff beyond the contracted capacity, which is stated to be 19.8 MW in terms of referred PPA dated 19.02.2020, shall be payable by the Discom. The PPA further defines the Plant load Factor (PLF), which shall be total kWh of power generated by plant in a tariff year as decided by the TSERC.

20. We take note that State Commission, vide its order dated 18.04.2020, has determined Generic tariff for the electricity generated from Refuse Derived Fuel (RDF) based power projects, such as that of Appellant’s project. The tariff Order takes cognizance of the Tariff Policy 2016, which mandates Distribution licensee to compulsorily procure 100 % power produced from all Waste – to Energy (WtE) plant in the State in the ratio of their procurement of power from all sources. The State Commission in the tariff order has determined levelized tariff of Rs 7.84 per kwh applicable for RDF based projects achieving COD during the period from FY 2021-FY 2023-24 for a period of 20 years from COD. There is no dispute that tariff determined in this generic tariff order is applicable for Appellant’s Project. Further the generic tariff order approves PLF of 65 % for first Year, 75 % for second year and 80 % for third year and onwards. We also take note that stakeholders request of incentive for achieving PLF higher than norms in line with approved incentive of 25 paise/kWh for bio mass and MSW plants, was not approved by State Commission and it stated that “ The commission does not subscribe to the stake holders submission that providing incentive for higher PLF than the approved PLF”.

21. Learned counsel for the Respondent has contended that PLF should be considered in terms of PLF determined by the State Commission and the State Commission has also not subscribed to the stakeholders submissions to provide incentive for higher PLF than approved and accordingly prayer in the present IA seeking payment for energy delivered beyond the approved PLF is not maintainable.

22. It is pertinent to note that Waste-to-Energy plants, such as that of Appellant’s plant serve a dual public purpose. They contribute to sustainable

waste management by reducing the quantum of municipal solid waste otherwise destined for landfills, thereby mitigating attendant environmental hazards. Simultaneously, they generate electricity from such waste, augmenting the energy mix with a renewable source and reducing dependence on conventional fossil fuels. The technology thus advances the twin objectives of environmental protection and energy security, while also promoting circular economy principles. These advantages underscore the larger public interest embedded in Waste-to-Energy projects (WtE). Importance of WtE project has been acknowledged in Tariff policy 2016, and Generic tariff Order dated 18.04.2020 also refers to the Tariff Policy. Further State Commission in the generic Tariff order, while determining two part tariff has stated that tariff structure adopted by the commission is fairly conducive for promotion of RDF based power projects.

23. From the perusal of Generic order, prima facie we feel there is no specific exclusion/bar/ restriction for purchase of electricity beyond the Normative PLF. Respondents have contended that denial of incentive of 25 Paise/kWh for achieving PLF more than Normative is indicative that purchase of energy from WtE project is to be limited to normative PLF. However, our attention has not been brought to any deliberation/observation in the generic tariff order, that State Commission while rejecting the said incentive, has made categorical statement that energy generation and consequently its payment is capped at Normative PLF.

24. In general, the incentive mechanism of say X Paise per kWh, as provided in a tariff order, is intended to reward generating stations that achieve Plant Load Factor (PLF) above the normative benchmark fixed therein. The normative PLF represents the standard level of performance expected of such plants. Where the

actual PLF achieved exceeds this normative level, the excess generation is entitled to incentive at the prescribed rate. This arrangement ensures that generators are encouraged to optimize their operations, thereby contributing additional energy to the grid, while simultaneously aligning regulatory objectives with consumer interest in enhanced availability of power. The incentive thus operates as a performance-linked measure, reinforcing efficiency and reliability in the sector. In the case of WtE projects, it shall also mean better waste management.

25. Further, on a specific query addressed to the Respondent Discom regarding the meaning and scope of the approved incentive of Rs 0.25 per kWh, which appears to have been applied to other categories of generation projects under certain tariff orders, no explanation was forthcoming either during the hearing of the Application or in the written submissions filed. In the absence of any clarification, at this stage, we are unable to accept the contention advanced by the Respondents that rejection of incentive substantiate that tariff beyond the Normative PLF is not applicable. This aspect, however, shall require detailed deliberation at the time of final adjudication of the Appeal.

26. It is further noted that denial of purchase of energy beyond the Normative PLF, at this stage, would effectively constrain the Appellant’s plant, though capable of burning additional waste and generating energy beyond the Normative PLF, to operate only up to the Normative PLF, since no charges for such excess energy are payable under the Impugned Order. Such denial may result in underutilization of the plant’s capacity despite its technical capability to burn more waste and generate additional energy, without conclusively deciding the issue, which shall be done at the final hearing of the Appeal

27. Further, it is also not in dispute that energy more than the normative PLF has been generated by the Appellant and consumed by the Respondent and Appellant in present application is restricting its claim on the energy generated up to the Contracted capacity as specified in the PPA dated 19.02.2020.

28. In view of the foregoing deliberations, it is evident that the substantive issues arising out of the provisions of the Power Purchase Agreement, the Generic Tariff Order, and the Tariff Policy, 2016, require detailed examination and adjudication at the stage of final hearing, with due regard to the judicial pronouncements cited by the parties. At this stage, however, we are satisfied that the Appellant has made out a prima facie case warranting interim protection, and the balance of convenience lies in its favour. We are, however, not inclined to grant the full levelised tariff as per the Generic Tariff Order dated 18.04.2020 for energy generated beyond the Normative PLF and up to the contracted capacity, as sought in the present application, since such determination must await final adjudication of the Appeal. We, however, take note that Generic Tariff Order dated 18.04.2020 is a two part tariff, in which State Commission had determined the Levelised tariff of Rs 7.84 /kwh comprising of levelised fixed cost of Rs 3.42/kwh and levelised variable cost of Rs 4.42/kwh. Accordingly, in the interest of justice and to prevent irreparable prejudice pending disposal of the Appeal, Appellant shall be paid the levelised variable tariff in terms of Generic Tariff Order dated 18.04.2020.

29. In view of above deliberations, in the interim, we direct that the Respondent – Discom shall pay the levelised variable cost as per the Generic Tariff Order dated 18.04.2020 for the energy generated beyond the Normative PLF and up to

the contracted capacity to the Appellant. Respondent – Discom is further directed to make payment on this basis for the past period within six weeks from the receipt of this order, and for the future, the same is payable in the respective invoices.

30. Needless to state that payment made by Respondent No 2 i.e. Discom to the Appellant with this interim arrangement, shall be subject to the outcome of the main appeal.

31. With the above observations, the IA No. 890 of 2024 is disposed of. APPEAL No. 85 OF 2024 Registry to verify if the pleadings in the appeal are complete and then include it in the ‘List of Finals’, to be taken up from there, in its turn. PRONOUNCED IN THE OPEN COURT ON THIS 02nd DAY OF SEPTEMBER, 2026. (Virender Bhat) Judicial Member (Seema Gupta) Technical Member REPORTABLE / NON-REPORTABLE Pr/dk/ag