HERC Regulatory Update: Star Wire (India) Vidyut vs. HPPC (Petition No. 67 of 2025)

Regulatory Brief and Case Identification

M/s. Star Wire (India) Vidyut Pvt. Ltd. (the Petitioner) has filed a petition against the Haryana Power Purchase Centre (HPPC) under Section 86(1)(f) of the Electricity Act, 2003, seeking adjudication for restitution through the payment of carrying costs and interest. This proceeding follows the substantive determination of a retrospective tariff in Petition No. 1 of 2025. The core of the dispute involves the financial impact of delayed payments and the realization of arrears after the Haryana Electricity Regulatory Commission (HERC) corrected a period of jurisdictional overreach by the HPPC regarding fuel cost applications.

Plant Profile: Star Wire (India) Vidyut Pvt. Ltd.

The technical specifications of the Petitioner’s generating facility, as established in the regulatory record, are as follows:

• Plant Capacity: 9.9 MW.
• Technology Type: Independent Biomass-based power plant (utilizing agricultural waste, including mustard crop residue and paddy straw).
• Location: Village Khurawata, Mahendergarh, Haryana.
• Operational History: Commissioned on May 3, 2013.

Background of the Dispute

The commercial relationship between the parties is governed by a Power Purchase Agreement (PPA) executed on June 22, 2012. The dispute originated from a conflict over invoicing and unilateral tariff adjustments by the HPPC.

Chronology of Financial Conflict:

• Tariff Volatility: Average tariffs were reduced to ₹7.05 per Kwh in FY24, following rates of ₹7.27 per Kwh in FY23 and ₹8.54 per Kwh in FY22.
• Disputed Arrears: Beyond the current claim, the regulatory history includes a disputed amount of approximately ₹7.28 crore specifically pertaining to tariff differentials for FY23 and FY24.
• Substantive Order (March 26, 2025): In a Suo Motu proceeding (Petition No. 1 of 2025), the Commission issued an order based on a state-specific fuel study conducted by Chaudhary Devi Lal University (CDLU), Sirsa. This order retrospectively increased the applicable Levelized Tariff for FY25 to ₹8.56 per Kwh.
• Arrear Realization: Following this order, the Petitioner realized an arrear payment of approximately ₹9 crore in May 2025, covering the differential for that financial year.

Commission Findings

The Commission’s observations in related proceedings, including the review petition RA-11 of 2021 (assailing the earlier order in PRO-51 of 2020), have established critical legal precedents regarding HPPC’s PPA obligations:

• Jurisdictional Overreach: The Commission previously set aside demand notices issued by the HPPC, ruling that the respondent lacked the enabling provisions to Suo Motu apply fuel cost deductions without prior Commission approval.
• Logic of Equitable Relief: A critical nuance in the Commission’s logic involved the denial of interest to the Petitioner during specific periods. The Commission determined that while HPPC’s recovery method was procedurally flawed, the Petitioner had “unjustly enriched” itself by claiming fuel costs higher than market rates. Thus, the denial of interest was originally framed as an “equitable relief” for the consumer.
• Parity in Tax Disputes: The Petitioner has highlighted a lack of parity in the HPPC’s conduct, noting that the HPPC was allowed to charge interest on excess MAT/Corporate Tax refunds while simultaneously withholding energy bill payments without providing interest to the generator.
• Penalty Mandate: The Commission has consistently held that interest in the nature of a penalty is warranted if mandated refunds are not processed by the HPPC within a strict one-month window.

Legal Focus: Carrying Costs and Petition No. 67 of 2025

Petition No. 67 of 2025 focuses on the claim for “Carrying Costs/interest” on the tariff differential amounts established by the March 26, 2025 order.

Legal Arguments: The Petitioner’s argument rests on the “Time Value of Money” principle. It contends that because the tariff increase for FY25 was determined and applied retrospectively, carrying costs are a necessary component of restitution to restore the developer to the same financial position they would have occupied had the correct tariff been paid at the time of invoicing.

Proceedings: The hearing for this matter was held on February 3, 2026. The Quorum presiding over the matter includes:

• Shri Nand Lal Sharma (Chairman)
• Shri Mukesh Garg (Member)
• Shri Shiv Kumar (Member)

Procedural Timeline of Related Petitions

Current Regulatory Status

The hearing for Petition No. 67 of 2025 was concluded on February 3, 2026. Following the completion of oral arguments, the Commission permitted both parties to submit supplementary written arguments, which were finalized by late February 2026. As of the current date, the Order is Reserved.