Commission Allows NUPPL's IA For Inclusion Of Unit-II In Tariff Petition; Adopts Cautious Approach Due To Substantial Delay In COD
New Delhi, June 22: The Central Electricity Regulatory Commission has allowed Neyveli Uttar Pradesh Power Limited's application for inclusion of Unit-II of the Ghatampur Thermal Power Station in the pending tariff proceedings and granted interim tariff at 85% of the Annual Fixed Charges claimed for Unit-I and Unit-II.
The Commission, however, made it clear that the interim tariff is subject to adjustment after final tariff determination and that no opinion has been expressed on admissibility of time overrun, cost overrun or final capital cost at this stage.
A coram comprising Member Ramesh Babu V., Member Harish Dudani and Member Ravinder Singh Dhillon passed the order in I.A. No. 37/2026 filed in Petition No. 370/GT/2025.
Background
Neyveli Uttar Pradesh Power Limited, a joint venture of NLC India Limited and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, has set up the Ghatampur Thermal Power Station, a 1980 MW coal-based supercritical generating station comprising three units of 660 MW each in Kanpur Nagar district, Uttar Pradesh.
The tariff petition was originally filed for determination of tariff from the commercial operation date of Unit-I, i.e., 12 December 2024, till 31 March 2029 under the CERC Tariff Regulations, 2024.
Unit-I achieved commercial operation on 12 December 2024, while Unit-II achieved commercial operation on 9 December 2025. Unit-III is yet to achieve commercial operation.
The generator has entered into Power Purchase Agreements with Uttar Pradesh Power Corporation Limited and Assam Power Distribution Company Limited. Initially, the Ministry of Power had allocated 1487.3 MW to Uttar Pradesh and 492.7 MW to Assam from the project. However, pending transfer of equity shareholding to the Government of Assam, the allocation was revised to 1843.7 MW for Uttar Pradesh and 136.3 MW as unallocated power.
NUPPL Sought Interim Tariff For Unit-I And Unit-II
Through I.A. No. 37/2026, NUPPL sought amendment of the pending tariff petition for inclusion of Unit-II and requested grant of interim tariff for Unit-I and Unit-II from their respective dates of commercial operation till 31 March 2029.
The petitioner claimed interim tariff equivalent to 90% of the total Annual Fixed Charges for billing purposes, subject to final determination of tariff by the Commission.
NUPPL argued that since Unit-II had achieved COD and the tariff period was the same, inclusion of Unit-II in the existing proceedings would avoid multiplicity of petitions. It was also submitted that the interim tariff sought was lower than the interim tariff already determined for Unit-I and therefore in the interest of beneficiaries.
UPPCL sought liberty to file its reply after consolidation and amendment of the petition upon COD of the generating station.
Commission Examines Regulatory Framework
The Commission examined Regulations 9(1) and 10(3) of the CERC Tariff Regulations, 2024.
Regulation 9 permits a generating company to file tariff determination applications for new generating stations or units and also allows a prayer for interim tariff from the date of commercial operation.
Regulation 10(3) empowers the Commission to grant interim tariff up to 90% of the tariff claimed for a new generating station or unit for billing purposes till final tariff is determined.
The Commission noted that the petitioner had submitted the required tariff forms and audited certified Form-B as part of the interlocutory application.
Capital Cost And Project Cost
The Commission noted that the original sanctioned cost of the project was ₹17,237.80 crore at December 2015 price level. The cost was later revised to ₹19,406.12 crore and thereafter to ₹21,780.94 crore under RCE-II approved by the Government of India.
For Unit-I and Unit-II, the petitioner had claimed capital cost of ₹14,368.9784 crore as on the COD of Unit-II, including IDC, financing charges and FERV. It also claimed notional IDC and discharge of liabilities subsequent to COD.
The Commission observed that the capital cost considered for interim tariff computation for Unit-I and Unit-II was within the overall RCE-II cost sanctioned for the full project comprising all three units.
However, the Commission also noted that approximately 27% of the capital cost claimed as on COD of Unit-II was attributable to IDC, including notional IDC, IEDC and FERV, which would require prudence check at the final tariff stage.
Substantial Delay In COD Noted
The Commission recorded substantial delay in commissioning of the project.
As against the scheduled COD of 26 November 2020 for Unit-I, the actual COD was achieved on 12 December 2024, resulting in a time overrun of 1477 days.
Similarly, Unit-II achieved COD on 9 December 2025 as against the scheduled COD of 26 May 2021, resulting in delay of 1658 days. The Commission noted that the effective delay of Unit-II with reference to Unit-I, considering inter-unit gap, was 182 days.
NUPPL attributed the delay in Unit-I to land acquisition and other issues allegedly beyond its control. For Unit-II, it also cited cascading impact of Unit-I delays, heavy rainfall and financial distress faced by a key contractor involved in balance of plant works.
Time And Cost Overrun Deferred For Final Tariff
The Commission held that the question of time overrun, cost overrun and their impact on capital cost requires detailed examination after hearing the parties on merits at the stage of final tariff determination.
It therefore declined to decide those issues while considering interim tariff.
The Commission observed that interim tariff was necessary because of the time-sensitive nature of the matter for both the generating station and the beneficiaries. At the same time, it held that a cautious approach was required because the prudence check of capital cost, time overrun and cost overrun was yet to be undertaken.
85% Interim Tariff Allowed Instead Of 90%
Although NUPPL had sought interim tariff equivalent to 90% of the claimed Annual Fixed Charges, the Commission allowed interim tariff only at 85%.
The Commission relied on its earlier interim order dated 12 August 2025 in the same tariff petition, where interim tariff for Unit-I had also been allowed at 85% of the claimed Annual Fixed Charges.
Accordingly, interim tariff equivalent to 85% of the fixed charges was allowed for Unit-I and Unit-II from their respective CODs, namely 12 December 2024 for Unit-I and 9 December 2025 for Unit-II, till 31 March 2029 or till final tariff determination, whichever is earlier.
Interim Fixed Charges Allowed
The Commission allowed interim fixed charges as follows:
For 2024-25, interim fixed charges of ₹456.06 crore were allowed.
For 2025-26, interim fixed charges of ₹1004.78 crore were allowed for Unit-I for the period from 1 April 2025 to 8 December 2025, and ₹722.05 crore for Unit-II from COD of Unit-II till 31 March 2026.
For 2026-27, interim fixed charges of ₹2348.69 crore were allowed.
For 2027-28, interim fixed charges of ₹2344.74 crore were allowed.
For 2028-29, interim fixed charges of ₹2514.74 crore were allowed.
The Commission clarified that these amounts are subject to adjustment upon final tariff determination.
Unit-III To Be Added Later
With respect to Unit-III, the Commission granted liberty to NUPPL to file an appropriate application or additional affidavit after COD of Unit-III for inclusion of the said unit in the present proceedings.
The filing fee already paid in the petition was directed to be adjusted accordingly.
IA Allowed
The Commission allowed I.A. No. 37/2026 and held that Petition No. 370/GT/2025 shall stand amended to include tariff determination for Unit-II of the generating station from its COD.
The interim tariff granted will remain subject to adjustment after final tariff determination under the CERC Tariff Regulations, 2024.
Key Takeaway
The order is significant because the Commission did not mechanically allow the 90% interim tariff claimed by the generator. Instead, considering substantial delay in COD and pending prudence check of time overrun, cost overrun and capital cost, CERC adopted a cautious approach and restricted interim tariff to 85% of the claimed fixed charges.
The final impact on beneficiaries will depend upon the detailed prudence check to be undertaken at the stage of final tariff determination.