MERC dismisses AEML-Generation's review petition seeking to replace 'Nil' actual IoWC with auditor-certified figures for FY2017-18 and FY2018-19
Case of Adani Electricity Mumbai Limited (Generation) seeking review of certain aspects of Multi Year Tariff (MYT) Order dated 30 March 2020 in Case No. 298 of 2019
AEML-G sought review of MERC's MYT Order dated 30 March 2020 (Case 298 of 2019), which trued-up ARR for FY2017-18 and FY2018-19 treating actual Interest on Working Capital (IoWC) as 'Nil' since no documentary evidence was submitted at that time, resulting in entire normative IoWC being treated as efficiency gain shared with consumers. AEML-G later submitted Statutory Auditor certificates (dated 22 June and 3 July 2020) allocating working capital interest business-wise based on bank Drawing Power ratios, claiming these as new evidence justifying higher actual IoWC and reduced efficiency-gain sharing.
- Review petition held maintainable on limitation (filed within SC-extended COVID limitation period from 15 March 2020)
- Commission rejected AEML-G's claim that Auditor Certificates constitute 'new and important evidence' - certificates were created after the Review Petition was filed (25 June 2020) and did not exist at the time of the Impugned Order
- Held that AEML-G's own MYT petition (Case 298/2019) had explicitly claimed 'no actual interest on working capital' for FY2017-18, making the zero-IoWC treatment consistent with AEML-G's own submissions
- Found discrepancies between figures in the Review Petition and the Auditor's Certificate for FY2017-18 (e.g., Working Capital Interest ₹11.42 Cr vs ₹11.45 Cr; Actual Drawn ₹88.66 Cr vs ₹90.05 Cr for Generation)
- Ruled that Regulation 85 review criteria (new evidence, error apparent on record, or sufficient reason) were not met; no error found in original computation
- Case No. 105 of 2020 dismissed; no change made to approved IoWC expenses for FY2017-18 and FY2018-19
- No further compliance directed; approved IoWC figures for FY2017-18 (₹6.40 Cr) and FY2018-19 (₹13.46 Cr) stand as per original MYT Order
- AEML-G's remedy, if any, lies before Hon'ble APTEL where related Appeal No. 442 of 2019 (on similar MTR Order IoWC issue) is already pending
- No revision to ARR/tariff trued-up under Case No. 298 of 2019 due to this review outcome
- Similar connected matters (Case Nos. 103 and 104 of 2020) involving the same IoWC issue for other AEML businesses were referenced but not decided in this order
- • No tariff impact from this order - approved ARR/tariff for AEML-G's fourth Control Period (FY2020-21 to FY2024-25) remains as per original MYT Order dated 30 March 2020
- • Reaffirms MERC's strict evidentiary standard: licensees must substantiate actual IoWC with contemporaneous documentary proof to avoid full normative IoWC being treated as efficiency gain shared with consumers/beneficiaries
- • C&I consumers and beneficiaries of AEML-G's generation output continue to benefit from the efficiency-gain sharing already built into approved tariffs; no clawback or additional pass-through arises
- • Sets precedent discouraging post-hoc allocation methodologies (e.g., bank Drawing Power ratios) as evidence in review proceedings - relevant for any distribution/generation licensee's future ARR true-up filings
This is a narrow procedural dismissal with no tariff or market impact - AEML-G's approved ARR stands unchanged. The order is instructive on MERC's evidentiary rigor: auditor certificates created after filing a review, based on retrospective allocation formulas, will not qualify as 'new evidence.' For C&I buyers tracking AEML-G tariffs, this closes one thread of the FY17-19 true-up dispute; the substantive legal question on treating 'Nil' actual IoWC remains sub judice before APTEL (Appeal 442/2019) and could still affect past ARR true-ups if reversed on appeal.
Growthifye does not take responsibility for the accuracy of this information. Values are compiled from tariff orders published on the websites of State Electricity Regulatory Commissions and distribution licensees (plus CEA / MoP / Grid-India), parsed automatically and shown with their source. Always verify against the signed order before any commercial decision. This one-pager is a Vidura-assisted summary of the official order; the signed order prevails.