New Delhi – The Central Electricity Regulatory Commission (CERC) has issued a pivotal directive, ordering the power distribution companies (DISCOMs) of Telangana and Andhra Pradesh to settle long-standing outstanding dues owed to NILE Ltd., a wind power generator. This decision, stemming from a petition filed by NILE Ltd., addresses unpaid electricity bills for power supplied from its 2 MW plant in Anantapur district between August 2011 and December 2012, along with interest for delayed payments incurred from January to October 2013. The ruling also mandates potential reimbursement for a disputed maintenance charge.

The financial dispute originated in 2011 when the erstwhile Andhra Pradesh Power Distribution Company Ltd. (APPDCL) began remitting only 50 percent of NILE’s monthly bills, citing an anticipated tariff revision. This partial payment continued into late 2012, despite a valid Power Purchase Agreement (PPA) that stipulated full payment within 30 days and a 10 percent annual interest rate for any delays. The situation was further complicated by the bifurcation of Andhra Pradesh on June 2, 2014, under the Andhra Pradesh Reorganisation Act. NILE’s Anantapur-based plant subsequently fell under the jurisdiction of Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL), while the original PPA was with APCPDCL, which transformed into Telangana State Southern Power Distribution Company Limited (TSSPDCL). Both successor utilities initially sought to transfer liability for the accumulated arrears.

After a thorough examination of legal provisions, including Section 53 and the Twelfth Schedule of the Reorganisation Act, CERC meticulously apportioned the financial responsibility. The Commission ruled that TSSPDCL is accountable for 82.55 percent of the unpaid dues, while APSPDCL must cover the remaining 17.45 percent. Both entities are directed to pay these amounts with a 10 percent interest per annum until full settlement. The same proportional split was applied to the interest accrued on delayed payments made in 2013, aligning with the terms of the PPA.

Regarding the disputed maintenance charge of INR 1,09,624, which NILE claims was wrongfully deducted by APSPDCL after already being paid to APTRANSCO in July 2011, CERC has granted NILE 60 days to submit conclusive proof. Upon verification of documentation, including the Andhra Bank demand draft, the amount must be reimbursed to NILE with 10 percent interest, consistent with the PPA and relevant government directives.

This landmark ruling by CERC not only resolves a specific, protracted financial disagreement but also establishes a crucial precedent for the Indian power sector. It clarifies that financial liabilities post-state bifurcation are determined by actual power consumption and pre-existing contractual obligations, rather than solely by new geographical jurisdictions. This decision is expected to bolster investor confidence in renewable energy projects by reinforcing payment security and encouraging more disciplined financial practices among DISCOMs, potentially streamlining the resolution of similar legacy payment disputes across the nation.