Southern Power Distribution Company of Telangana Ltd. vs M/s Hyderabad MSW Energy Solutions Pvt. Ltd. &Anr on 30 October 2026

J U D G M E N T

PER HON’BLE MR. VIRENDER BHAT, JUDICIAL MEMBER

1. The appellant, a distribution licensee in the State of Telangana, is aggrieved by the order dated 04.08.2025 passed by the 2nd respondent Telangana Electricity Regulatory Commission (hereinafter referred to as “the Commission”) whereby the Commission has allowed the appellant’s petition bearing O.P. No.21/2024 (old No. O.P. 116/2022) under Section 86(1)(b) of the Electricity Act, 2003 and accorded approval to the Power Purchase Agreement (PPA) dated 10.10.2022 executed between appellant and the 1st respondent despite the fact that the appellant had sought withdrawal of the

petition vide letter dated 03.10.2023 addressed in this regard to the Commission.

2. The 1st respondent M/s Hyderabad MSW Energy Solutions Pvt. Ltd. is a generating company engaged in Waste to Energy (WTE) projects and is operating WTE power project located at Jawaharnagar, District Medchal, Hyderabad. It had entered into a PPA dated 19.02.2020 with the appellant for sale of power from its said 19.8MW WTE power project at a tariff to be determined by the Commission from time to time. Subsequently, the 1st respondent requested for enhancement of the capacity of its power plant from 19.8MW to 24MW capacity, which was acceded to by the appellant. Accordingly, the PPA dated 19.02.2020 required to be amended and a draft amended PPA dated 10.10.2022 was prepared.

3. The appellant then approached the Commission with petition bearing OP No.116/2022 seeking approval of the Commission of the said draft amended PPA dated 10.10.2022 under Section 86(1)(b) of the Electricity Act, 2003. Before any order could be passed on the said petition, the appellant addressed a letter dated 03.10.2023 to the Commission requesting permission to withdraw the petition on the ground that there had been no augmentation of any equipment of the power project, and therefore, the plant will not be able to generate 24MW of power, however, vide order dated

30.10.2023, the Commission rejected the request of appellant to withdraw the petition and also declined to give consent to the amended PPA dated 10.10.2022.

4. The 1st Respondent assailed the said order dated 30th October, 2023 of the Commission before this Tribunal in Appeal No. 63 of 2024 which came to be allowed by this Tribunal thereby remanding the matter to the Commission for passing fresh order in accordance with the law upon affording reasonable opportunity of being heard to the parties, particularly the 1st Respondent.

5. The Commission then restored the petition No. 116 of 2022 and re- numbered it as O.P. No. 21 of 2024. It appears that during the further proceedings of the petition, the Commission felt it pertinent to appoint a Committee of experts on the following terms of reference :- "The main objective is to inspect the equipment of the generator i.e, 19.8 MW Waste to Energy Power Plant of M/s. Hyderabad MSWESPL, at Jawahar Nagar, Kapra Mandal of Medchal - Malkjagiri District, Hyderabad to report as to whether the existing equipment of the generator is capable of generating and injecting

24 MW of power, as mentioned in the amended Power Purchase Agreement entered by the said firm with TGSPDCL.".

6. As noted in the impugned order, the Expert Committee inspected the power project on 21st February, 2025 and made its conclusions and recommendations as under :- "3. Based on the above observations, the committee is of the view that the existing WTE plant of M/s HMSWESPL is able to generate 24 MW power periodically as demonstrated during the visit of the committee and shown in the selected generation data provided by HMSWESPL. However, a continuous demonstration of 24 MW generation cannot be ascertained based on the data provided. It is recommended that the TGERC may approach Ministry of New and Renewable Energy (MNRE) for appropriate guidelines for performance acceptance test of MSW/RDF-based Waste to Energy Plants based on continuous run without LDO support for a minimum duration. TGERC, based on the MNRE guidelines, may seek a performance acceptance test for the plant to demonstrate a continuous capacity of 24 MW".

7. Both the Appellant and the 1st Respondent filed their objections to the report of the Expert Committee which have been duly considered by the

Commission. Following points were formulated by the Commission for its considerations in the petition :- "1. Whether the existing equipment of the M/s. HMESPL plant is capable of generating 24 MW power.

2. And if so, whether the request of the TGSPDCL to accord consent for amendment of PPA of 10.10.2022 can be acceded even after TGSPDCL sought to withdraw the petition."

8. Both the points have been decided by the Commission in favour of the 1st Respondent in the impugned order. The final order passed by the Commission is as under :- I. The petition filed by TGSPDCL seeking to give the consent to the draft first amendment dated 10.10.2022 to the original PPA dated 19.02.2020 in respect of enhancing of waste to energy plant from 19.8 MW to 24 MW capacity situated at Jawaharnagar, Kapra Mandal, Medchal - Malkajgiri district is allowed. II. Consequently, the prayer of the TGSPDCL made in the letter dated 03.10.2023 seeking to withdraw the petition is hereby dismissed.

III. The TGSPDCL is directed to submit amended PPA before this Commission within one month from the date of receipt of this letter.

9. We have heard Mr. D. Abhinav Rao, Learned Counsel for the Appellant, Mr. Sanjay Sen, Learned Senior Counsel appearing on behalf of Respondent No. 1 and Mr. Rajat Srivastava, learned Counsel for Respondent No. 2.

10. Learned Counsel for the Appellant argued that the impugned order of the Commission disallowing the request of the Appellant to withdraw O.P No. 21 of 2024 is in the teeth of Order 23 Rule 1 of the Code of Civil Procedure (CPC), 1908. He would submit that a petitioner has a right to withdraw its petition at any stage and neither the Commission nor the Respondent can raise objections to such prayer of the petitioner. He cited the judgment of Hon'ble Supreme Court of Anil Kumar Singh Vs. Vijay Pal Singh and Ors. (2018) 12 SCC 584 in support of his submissions. He would further argue that recognition of capacity of power plant as 24 MW without physical augmentation and production is erroneous for the reason that the Expert Committee also, in its report, had stated that the plant is unable to generate 24 MW power continuously. He submitted that admittedly, the existing 19.8 MW power plant has not been augmented with any further equipment which is a sine qua non for any valid capacity enhancement, consistent with

industry practice, as well as regulatory norms and, therefore, the impugned order of the Commission granting approval of the amended PPA dated 10th October, 2022 suffers from serious infirmities.

11. Learned Counsel also submitted that the Commission vide tariff order dated 18th April, 2020 has determined the fixed charges as well as variable charges payable to a power generator by assuming certain operational parameters and accordingly, alteration of any such parameter such as capacity enhancement without any additional expenditure, calls for re- determination of tariff. In other words, according to the Learned Counsel since the capacity enhancement is resulting in improving the PLF, the same needs to be factored in the tariff with suitable reduction. He submitted that the tariff payable to the Respondent No. 1 should be re-visited by the Commission with revised operation parameters.

12. On behalf of the 1st Respondent, it was argued by the Learned Senior Counsel that once a PPA was executed between the parties with their consent and was also acted upon by supply of power from the power project of 1st Respondent to the Appellant in terms thereof which is evident from the joint meter readings, there was no occasion for the Appellant to seek withdrawal of the petition before the Commission. He would further submit that the regulation of a power procurement by a Distribution Licensee i.e. an approval/or determination of the procurement terms/tariff is solely within the

domain of the Commission and not a matter be left to unilateral choice of a party to a PPA. He also pointed out that the Appellant actively participated in the process of appointment of the Expert Committee and even nominated its members. He submitted that the report of the Committee makes it clear that concerns of Appellant for augmentation were fully addressed by the Committee.

13. Learned Senior Counsel also pointed out that the letter dated 16th October, 2023 addressed by the Appellant to the Commission seeking withdrawal of the petition was after the arguments were concluded in the petition and order was reserved on 21st September, 2023. He would argue that once hearing is completed in a quasi judicial proceedings and order is reserved, the pronouncement of order cannot be sought to be aborted by addressing a communication to the Secretary of the Commission as there is no hiatus between the date of reserving of the order and date of pronouncing of the judgement. According to the Learned Senior Counsel such course of action is unknown to law and undermines the regulatory process.

14. To buttress his submission, Learned Senior Counsel cited a judgement of the Hon'ble Supreme Court in Andhra Pradesh Southern Power Distribution Power Co. Ltd. Vs. Hinduja National Power Corpn. Ltd., (2022) 5 SCC 484. He also relied upon the previous judgement of this Tribunal in

Hinduja National Power Corporation Ltd. Vs. Andhra Pradesh Electricity Regulatory Commission and Ors. 2020, SCC online APTEL 3 wherein it is held that the proceedings before the State Regulatory Commission are not in the nature of a lis, as in case of civil suit before a Civil Court.

15. On these submissions, Learned Senior Counsel urged us to dismiss the appeal. Our Analysis :-

16. The draft PPA incorporating the enhanced capacity of the power project of the 1st Respondent as 24 MW was entered into between the parties on 10th October, 2022. This was done in pursuance to the accent accorded by the Appellant to the augmentation of the existing capacity of the power project from 19.8 to 24 MW conveyed vide letter dated 16th March, 2022. Subsequently, the Appellant filed a petition under 86(1)(b) of the Electricity Act, 2003 before the Commission seeking approval of the said amended PPA dated 10th October, 2022.

17. It appears that the petition came up for hearing before the Commission on 1st September, 2023 on which date the Appellant for the first time submitted to the Commission that the amended PPA has been entered into without verifying the technical parameters for enhancing the capacity from 19.8 MW to 24 MW. When the Commission sought to examine the technical aspect and required the petitioner to submit the details, two contradictory

reports were placed at the disposal of the Commission. Both the reports were secured by the Appellant itself, one being from its internal officers and the other from an external agency. The Commission expressed its displeasure in the way the matter had been handled by the Appellant and sought to know why these aspects have not been examined before filing the petition. The officers of the Appellant present during the hearing replied that they had relied upon the recommendations of Telangana State Renewable Energy Development Corporation which has suggested the fuel and rating capacity as well as the certification done by the Chief Electrical Inspector for the State of Telangana who had certified about the rating capacity of the plant. Recording all these contentions/submissions, the Commission reserved the order on the petition. For the sake of reference, we hereby extract the said order of the Commission dated 01.09.2023 hereinbelow :- Case No. Name of the Petitioner(s)

Name of the Respondent(s)

O.P. (SR) No. 116 of

TSSPDCL

-None-

Petition filed seeking consent for the draft first amendment dated 10.10.2022 to the power purchase agreement dated 19.02.2022 executed between you and M/s. Hyderabad MSW Energy Solutions Private Limited for enhancement of capacity of the waste to energy plant from 19.8 MW to 24 MW capacity at Jawaharnagar, Kapra, Medchal district.

Sri. Mohammad Bande Ali, Law Attachee for petitioner is present. The representative of the petitioner as well as officers accompany the representative made submissions on the petition. The Commission having perused the record took exception to the way the petition had been filed without examining the requirement of information and the necessity of providing complete comprehensive fair information in the matter. The petitioner has into a draft amendment PPA without verifying the technical parameters for enhancement of capacity from 19.8 MW to 24 MW. Moreover, when the Commission sought to examine the technical aspects and required the petitioner to submit the details, two contradictory reports have been placed at the disposal of the Commission. Both the reports have been secured by the petitioner itself, one being from its internal officers and the other from the external agency. These reports relating to technical examination should have been done at the first instance itself before filing the petition. The petitioner should have examined the request of enhanced capacity considering the technical parameters before approaching the Commission for approval of draft amendment PPA. The Commission sought to know from the officers of the petitioner as to why the aspects have not been examined before filing of the petition. The officers present have replied that they relied on the recommendations of Telangana State Renewable Energy

Development Corporation, which had suggested the fuel and rating capacity. Also, reliance was placed on the certification done by the Chief Electrical Inspector for the State of Telangana, who had certified about the rating capacity of the plant. They sought to explain the said details. The Commission expressed displeasure in the way the matter was handled and also sought to know how the petitioner is injecting higher capacity of more than the rated capacity. There is no reply from them, however, they tried to explain on these aspects only after the Commission had raised the questions on the same. At this stage, the representative of the petitioner sought some time to rectify the defects and also place the appropriate material or else to return the petition. However, the Commission pointed out that since the matter has been called for hearing on the maintainability, it has no other option except to decide the matter either to entertain or refuse the same by rejecting it. Therefore, the Commission expressed its views in the matter and would pass orders accordingly on it. Sd/- Sd/- Sd/- Member Member Member

18. After the orders on the petition were reserved by the Commission as stated hereinabove, a letter dated 3rd October, 2023 was sent by the Appellant to the Secretary of the Commission with a permission to withdraw the petition on the ground that amendment to the PPA for enhancement of

capacity was acceded to in expectation of the addition/augmentation of the power project but site inspection report submitted by the team of engineers of the Appellant shows that there is no change through addition/augmentation in the rating of the generator and associate equipments vis boiler, turbine, generator etc. at the plant and hence without such addition/augmentation the proposed enhancement of capacity from 19.8 MW to 24 MW is not possible.

19. Issue which arises for our consideration in these facts and circumstances of the case is whether a Distribution Licensee can be permitted to withdraw the petition under Section 86(1)(b) of the Electricity Act, 2003 seeking approval of the PPA executed by it with a power generator, not on the ground that it does not require the power or that the tariff fixed in the proposed PPA is on the higher side but on some other ground. The answer to this issue would require us to discuss in detail the scope of Section 86(1)(b) of the Act as well as the powers of the Commission thereunder.

20. Section 86 of the Electricity Act, 2003 reads as under :- "Section 86. (Functions of State Commission): --- (1) The State Commission shall discharge the following functions, namely: - (a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State:

Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers; (b)"regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State;"

21. This Section confers power upon the State Electricity Commissions to "regulate" the electricity purchase and procurement undertaken by the distribution licensees for distribution and supply within the State, such regulation covering various aspects including "the price at which electricity shall be procured from the generation companies or the licensees or from other sources". What the Commission is empowered to regulate in the 'electricity purchase' and 'procurement process' of a distribution licensee. The purchase of electricity can be by way of an agreement with regards to the source, quantum and price. However, the procurement process can be either by way of bidding or by negotiations (which may involve an agreement). In this regard, the following observations of the Hon'ble

Supreme Court in Tata Power Co. Ltd. Vs. Reliance Energy Ltd. (supra) are apposite :- "108. A generating company, if the liberalisation and privatisation policy is to be given effect to, must be held to be free to enter into an agreement and in particular long-term agreement with the distribution agency; terms and conditions of such an agreement, however, are not unregulated. Such an agreement is subject to grant of approval by the Commission. The Commission has a duty to check if the allocation of power is reasonable. If the terms and conditions relating to quantity, price, mode of supply, the need of the distributing agency vis-à-vis the consumer, keeping in view its long-term need are not found to be reasonable, approval may not be granted.

109. A generating company has to make a huge investment and assurances given to it that subject to the provisions of the Act it would be free to generate electricity and supply the same to those who intend to enter into an agreement with it. Only in terms of the said statutory policy, it makes huge investment. If all its activities are subject to regulatory regime, it may not be interested in making investment. The business in regard to allocation of electricity at the hands of the generating company was the subject-matter of the licensing regime. While interpreting the statute it must be borne in mind that such a mechanism should not come back.

110. That, however, would not mean that the generating company is absolutely free from all regulations. Such regulations are permissible under the 2003 Act; one of them being fair dealing with the distributor. Thus, other types of regulations should not be brought in which were not contemplated under the statutory scheme. If it is exercising its

dominant position, Section 60 would come into play. It is only in a situation where a generator may abuse or misuse its position the Commission would be entitled to issue a direction. The regulatory regime of the Commission, thus, can be enforced against a generating company if the condition precedent therefor becomes applicable."

22. Section 86(1)(b), thus, empowers the State Commission to oversee the purchase and procurement of power by the distribution licensees. In other words, the State Commission is entrusted with the power to regulate the prices of sale and purchase of electricity between the generating companies and distribution licensees through agreements known as Power Purchase Agreements (PPAs) in order to ensure that such sale and purchase of electricity is not against the interest of the consumers. The Commission is vested with the jurisdiction to determine tariff at which a distribution licensee should procure/purchase electricity, which it exercises either by determining tariff under Section 62 of the Act or by adopting tariff discovered through a competitive bidding process under Section 63 or by issuing generic tariff orders.

23. Therefore, once a petition under Section 86(1)(b) of the electricity Act, 2003 filed before the Commission by Distribution Licensee seeking approval of the PPA, the Commission only needs to ascertain the need of the

Distribution Licensee to procure the power under the PPA and the reasonableness of the price at which the power is sought to be procured under the PPA. Once the Commission is satisfied that the Distribution Licensee genuinely requires the power to be supplied to the consumers and the tariff fixed under the PPA is not exorbitant or above the prevalent market price of the power, it has no option except to accord its approval to the PPA. However, it may suggest changes to any clause in the PPA which, it feels, would be against the interest of the consumers.

24. In the instant case, the Appellant had not sought withdrawal of the petition under Section 86(1)(b) on the ground that it does not require the power from the power project of the 1st Respondent or, the tariff fixed in the PPA has been counted to be exorbitantly high. The withdrawal of the petition was sought on the ground that the power project would not be able to generate 24 MW of power continuously in the absence of any addition/augmentation in the rating of its main equipment i.e. generator/turbine/boiler etc. In other words, the case of the Appellant seems to be that the amended PPA dated 10th October, 2022 has been signed by it on some mis-representation.

25. Considering the scope and ambit of regulatory powers conferred upon the Electricity Regulatory Commission under Section 86(1)(b), we are of the

opinion that mere misrepresentation alone would not entitle a distribution licensee to seek withdrawal of the petition for approval of PPA from the Commission. The discom must establish before the Commission that due to the misrepresentation of facts there would be undue increase in tariff payable by it to the power generator which would, in turn, adversely affect the interests of the end consumers of the electricity. Any purported misrepresentation without impacting the tariff prejudicially qua the discom would be insignificant and thus irrelevant for considering whether or not to approve the PPA.

26. A PPA is like any other commercial contract executed between the two parties. The only distinction between the two is that a PPA becomes effective and implementable only upon getting approval from the appropriate regulatory commission under Section 86(1)(b) whereas the normal commercial contracts become effective from the date of their execution. Therefore, in case a party to the PPA feels that he executed the same on account of some misrepresentation on the part of other party to the agreement, he has the option to rescind from the agreement which can be done even after the PPA is approved by the appropriate Commission. While deciding a petition under Section 86(1)(b), the Commission does not act as a civil court deciding a lis between the parties. Accordingly, the Commission only satisfies itself only about (i) requirement of the discom of the power

under the PPA; (ii) reasonableness of the tariff fixed in the PPA; and (iii) compliance of the relevant provisions of the Electricity Act as well as the rules/regulations framed thereunder, before according approval to a PPA. For seeking recession of the PPA on the ground of fraud, misrepresentation, undue influence etc., the affected party shall have to initiate appropriate civil action which may be either a petition under Section 86(1) (f) of the Act (in case it impacts the tariff) or a civil suit before a civil court (in case it does not impact the tariff).

27. In the instant case, the Appellant has concededly not elected to rescind the PPA as it has neither served any notice in this regard upon the 1st Respondent nor has initiated any legal proceedings. So, once the Appellant has elected to proceed further with the PPA notwithstanding the misrepresentation, its request seeking withdrawal of the petition under Section 86(1)(b) was not maintainable at all.

28. Now let us proceed to determine whether, in fact, there had been any misrepresentation held out by the 1st Respondent to the Appellant. Section 18 of the Contract Act, 1872 defines "Misrepresentation" as false or misleading statements that induces a party to enter into a contract without any fraudulent intent to deceive. We quote Section 18 hereunder :- "18. "Misrepresentation" defined.-"Misrepresentation" means and includes-

(I) the positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true; (II) any breach of duty which, without an intent to deceive, gains an advantage to the person committing it, or any one claiming under him; by misleading another to his prejudice, or to the prejudice of any one claiming under him; (III) causing, however innocently, a party to an agreement, to make a mistake as to the substance of the thing which is the subject of the agreement."

29. Thus, if one party to the contract induces the other to enter into the contract by misrepresenting, though innocently, any material fact specially within his own knowledge, the party misled can avoid the contract. However, it is not each and every misrepresentation which would render a contract to be avoided. It is only where the facts are specially within one party's knowledge, a positive duty of disclosure is obvious and the contract would be avoidable by mere passive failure to communicate that material fact. However, there is no positive duty of disclosure between the contracting parties where the facts are not by their very nature more accessible to one than to the other, though one party may have a specific informative which he knows that the other has not. Mere silence is no misrepresentation when the other party has the occasion and means to know the fact before entering into the contract. Thus the contract is not voidable if the party who suffered the mis-representation had the means to discover the truth with ordinary diligence.

30. In the instant case, the 1st Respondent had vide letter dated 16.03.2022, sought approval of the Appellant for amending the existing PPA dated 19.02.2020 for augmentation of the existing operating capacity from 19.8 MW to 24 MW. The contents of the letter are very material and are extracted hereinbelow :- “To The Chairman & Managing Director TSSPDCL Mint Compound Hyderabad Sub: M/S Hyderabad MSW Energy Solutions Pvt Ltd- Amendment of PPA for Expansion capacity of RDF based Waste to Energy Project from 19.8 MW to 48 MW at Jawahar Nagar-Regarding

Ref: 1. PPA between TSSPDCL & HMESPL dt:19.02.2020 for 19.8 MW RDF based WTE project

2. Environmental Clearance from MOEF & CC Dt:23.12.2021

3. Grid connectivity letter from TSTRANSCO for 48 MW Lr.No.CE/Comml&RAC/SE/DE/C\omml/AE- BL&C/F-HMSW/D.No.69/22, dt:23.02.2022

4. CFE from TSPCB Ref:

Order

No.01/TSPCB/CFE/MDC/MSW/WtE/HO/2017 Dt:19.01.2022

5. CFO from TSPCB Consent order No.01/TSPCB/CFO/MDC/MSW/WtE/HO/2022 Dt: 10.03.2022

6. TSREDCO Proceedings & MOU Dt: 14.03.2022 for capacity enhancement from 19.8 MW to 48 MW.

7. G.O. Ms No. 42, Environment, Forest, Science and Technology (For III) Department of Govt. of Telangana, Dated 05.12.2020.

Respected Sir,

With Reference to the above subject We, M/s Hyderabad MSW Energy Solutions Pvt Ltd. have installed and commissioned a 19.8 MW RDF based Waste to Energy project at Sy No 173 in Jawahar Nagar, Hyderabad in August 2020. We recall with great pleasure your gracious presence on the occasion of the Inauguration and best support extended by TSSPDCL during course of implementation.

Further to the GO issued by Govt. of Telangana Dt: 05.12.2020, the Ministry of Environment, Forest & Climate Change Dept. has accorded Environmental clearance for Enhancement of our RDF based Waste to Energy plant from existing operating capacity of 19.8 MW to 48 MW Dt:23.12.2021 vide Ref 2nd cited above, a copy of Environmental Clearance is enclosed as Annex-1. Also, TSTRANSCO has accorded Grid connectivity approval for 48 MW vide Ref 3rd Cited above (Copy enclosed as Annex-II). M/s. TSPCB has accorded Consent for Establishment of our existing capacity from 19.8 MW to 48 MW vide Ref 4th Cited above (Copy enclosed as Annex-III) and M/s. TSPCB accorded amendment of Consent for Operation from 19.8 MW to 24 MW vide Ref 5th Cited above (Copy enclosed as Annex-IV).

Further, M/S. TSREDCO has provided Proceedings and executed MOU agreement vide Ref 6th Cited above (Copy Enclosed as Annex- V & VI) for expansion of our existing operating capacity from 19.8 MW to 48 MW in Phased manner. Accordingly, the said expansion is being carried out as under in the same premises to achieve the capacity from the existing 19.8 MW to 48 MW as per aforementioned proceedings.

a) Phase-1: Augmentation of the present operating capacity of 19.8 MW to 24 MW

b) Phase-2: To set up, a New 24 MW RDF based WTE plant We are herewith enclosing the following documents for your ready reference.

Sl. No.

Description

Enclosure

1. Environmental Clearance for enhancement of WTE capacity from 19.8 MW to 48 MW

ANNEX-I

2. Grid Connectivity Letter from TSTRANSCO for 48 MW

ANNEX-II

3. CFE from TSPCB for Capacity enhancement from 19.8 MW to 48 MW

ANNEX-III

4. Amendment CFO from TSPCB for 24 MW

ANNEX-IV

5. Proceeding & MOU Agreement Executed with TSREDCO for enhancement of WTE capacity from 19.8 MW to 48 MW in Phased manner ANNEX-V & VI

6. MOA & AOA of Hyderabad MSW Energy Solutions Pvt Ltd

ANNEX-VII

7. GO from Govt. of Telangana for Enhancement of WTE Capacity from 19.8 MW to 48 MW

ANNEX-VIII

Hence, we request you to accord approval for executing the amendment of existing PPA from 19.8 MW to 48 MW i.e. augmentation of the existing operating capacity from 19.8 to 24 MW in current operating Phase-1 and another 24 MW RDF based WTE plant in Phase-2, now under construction.

Thanking you, Yours sincerely, For Hyderabad MSW Energy Solutions Pvt Ltd

31. Perusal of these contents of the letter would reveal that the 1st Respondent has nowhere stated that any addition/augmentation in the rating of the generator and its associate equipments namely boiler, turbine etc. has

been done by it. The letter merely says that the operating capacity is being expanded and enhanced from 19.8 MW to 24 MW. It was for the Appellant to inspect the power project to ascertain whether any addition/augmentation in the rating of the generator and its associate equipments has been carried out. The Appellant had the opportunity and means to discover the actual changes, if any, carried out by the 1st Respondent in the power station for enhancement of its capacity. Such exercise ought to have been done prior to signing the amended PPA dated 10.10.2022 or at least prior to filing the petition under Section 86(1)(b), as was done by it after the filing of the petition. on the basis of which letter dated 03.10.2023 was addressed by it to the Commission seeking withdrawal of the petition. Once the Appellant chose not to make any endeavour to discover the actual facts despite having opportunity and means to do so and signed the amendment to the PPA an also filed petition under Section 86(1)(b) for its approval, it cannot be hear now to say that the amended PPA was executed by it on mis-representation.

32. Thus, it is limpid from the facts and circumstances of this case that the 2nd Respondent had not held out any false representation of any kind to the Appellant and, therefore, the contention of the Appellant that the amend PPA dated 10th October, 2022 was executed by it due to mis-representation is without any basis.

33. The contention of the Appellant that the power project of the Appellant would not be able to generate 24 MW of power in the absence of any addition/augmentation in the rating of the main equipment i.e. generator/turbine/boiler etc. has been rightly repelled by the Commission in the impugned order.

34. As we have already noted hereinabove that during the proceedings of the petition, the Commission constituted an expert committee comprising of Prof. Anoop Singh, IIT Kanpur, Prof. SK. Singh, Vice Chancellor, Rajasthan Technical University and Mr. Asif Iqbal, Deputy Director, CEA to report as to whether the existing equipment of the generator of the 2nd Respondent is capable of generating and injecting 24 MW of power. It appears that the Committee visited the power plant of 2nd Respondent on 21st February, 2025 and permitted the representative of both sides to submit data and to make presentations. In its report submitted to the Commission on 20th March, 2025, the expert Committee stated that based on the observations, the Committee is of the view that the existing WTE plant of 2nd Respondent is able to generate 24 MW power periodically as demonstrated during the visit of the Committee and shown in the selected generation data provided by 2nd Respondent. The Committee also added in its report that continuous demonstration of 24 MW generation cannot be ascertained on the basis of

data provided to it and recommended a performance acceptance test for the plant for such demonstration.

35. Along with the report, the Expert Committee also enclosed a letter dated 26th February, 2025 addressed by M/s. TD Power Systems Limited (Upon which the 2nd Respondent had placed order for supply, installation and commissioning of 19.8 MW alternator for the power plant through M/s. Greenesol Power Systems Private Ltd.), in which it is stated that standard TC-210 frame size alternator has been supplied to the 2nd Respondent which supports the capacity range from 18 MW to 24 MW. The letter further mentions that although the name plate reflects buyer's specified quantity of 19.8 MW, TC-210 alternator is engineered to operate continuously up to 24 MW. The original manufacturer of the alternator has also endorsed in the said letter that the machine installed by them is capable of producing 24 MW of power continuously.

36. On the basis of contents of the said letter, the Commission has observed in paragraph No. 23 of the impugned order as under :- "23. This Commission, having perused the letter issued by the Original Equipment Manufacturer (OEM) dated 26.02.2025, finds no merit in relying solely upon the nameplate inscriptions of the generator to delineate its operational capacity. It is trite law that mere form cannot triumph over substance, and technical inscriptions are not watertight

indicators of capacity of the plant. The capacity of the plant to generate power depends upon frame size of alternator, other connected equipment and relative factors. Hence, the Commission is persuaded that the plant's capacity is not circumscribed by the superficial label affixed thereto, but by the embedded design margin envisaged ab initio. Therefore, the argument of the TGSPDCL that since the name plate inscriptions shows only 19.8 MW of power, it cannot generate 24 MW of power cannot be accepted."

37. We are unable to find any flaw or infirmity in these observations of the Commission. Once the original manufacturer of the machine endorses that the machine installed in the power station of the 2nd Respondent is capable of producing of 24 MW of power continuously and the machine actually was able to generate 24 MW of power during the visit of the Expert Committee, there does not remain any doubt that the generator installed by the 2nd Respondent would not be able to generate 24 MW of power in the absence of any additional/augmentation as contended by the Appellant. The Commission has correctly observed in the impugned order that there exists neither any statutory mandate nor jurisprudential precedent requiring the physical addition/augmentation for such enhancement. When the generator in question had been originally designed to produce 24 MW of power as certified by its manufacturer, there was no need for any further addition/augmentation to it for enhancement of its capacity from 19.8 MW to 24 MW.

38. It is true that, as noted herein above, as per the report of the Expert Committee, the continuous demonstration of 24 MW generation of power could not be ascertained on the basis of the data provided to it. On this aspect, Commission has correctly observed that there are no guidelines, regulations rules framed either by the Commission itself or by the Central Electricity Regulatory Commission or by Ministry of Renewable Energy, Govt. of India mandating period of continuous generation of specific MW of power to determine the capacity of renewable energy power plant. The Commission has noted that in case of thermal power projects as per the CERC Regulations, the thermal power plant has run continuously for 72 hours in order to determine that thermal plant is capable of generating specific Megawatts of power and in case of power being generated through non- conventional renewable energy sources like wind, solar, MSW and biomass etc., it is not possible for a plant to generate specific megawatt continuously, as it depends upon many relative factors including weather, nature of fuel, moisture content etc.

39. In this regard, it is also to be noted that the Appellant has given the "Certificate of Contracted Capacity" to the 2nd Respondent in achieving 19.8 MW of power at 16:00 hours on 11.12.2020 and at that time the Appellant did not ask the generator to demonstrate continuous generation of 19.8 MW of power as the condition precedent prior to issuing the said Certificate. Therefore, insistence on the part of the Appellant in demanding the 2nd Respondent to continuous generation of 24 MW of power in order to enhance the 19.8 MW to 24 MW is not justified.

40. We may also note that the power project in question is a Waste to Energy (WTE) project converting the garbage into electrical energy. By doing so, the power project is not only useful in disposing of large amounts of the garbage and, therefore, is in public interest but also adds to the power generation thereby reducing the scarcity of power in the State of Telangana. Such type of power projects need to be encouraged. The enhancement of the capacity of the Appellant's power project from 19.8 MW to 24 MW would mean that it will utilize more garbage and would produce more power. Therefore, permitting the Appellant to withdraw the petition filed by it under Section 86(1)(b) of the Electricity Act or refusal on the part of the Commission to approve the amended PPA date 10.10.2022 executed between the parties would be doing a great dis-service to the nation at large and thus not advisable.

Conclusion

41. Bearing in mind the above discussion, we do not find any error or infirmity in the impugned order of the Commission. The appeal is sans any merit and dismissed as such. All Pending IAs also stand disposed of. Pronounced in the open court on this the 30th day of October, 2026.

(Virender Bhat)

(Seema Gupta)

Judicial Member

Officiating Chairperson

REPORTABLE / NON-REPORTABLE js