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Supreme Court Upholds Wind Energy Firms' Right to Separate Tariff Without Accelerated Depreciation

The Supreme Court of India has rejected appeals filed by Gujarat Urja Vikas Nigam Ltd (GUVNL) against orders from the Gujarat Electricity Regulatory Commission (GERC) and the Appellate Tribunal for Electricity (APTEL). These orders allowed four wind energy companies to seek separate tariff determinations after opting out of accelerated depreciation benefits under the Income Tax Act.

The dispute stemmed from PPAs signed between 2010 and 2012, where GUVNL assumed a fixed tariff of Rs3.56/kWh under the GERC’s 2010 order. This rate was applicable only for projects availing accelerated depreciation. The companies later informed they did not claim this benefit and hence, sought revised tariffs. The Supreme Court ruled in their favor, stating that the 2010 GERC order clearly allowed for separate tariffs for such cases.

The Court emphasized that statutory rights under the Income Tax Act override PPA assumptions, especially since GUVNL failed to obtain any written commitment regarding depreciation. It criticized GUVNL’s conduct as commercially motivated and misaligned with public policy objectives to support renewable energy.

The verdict reinforces regulatory clarity, ensuring fairness for renewable developers. It also highlights that state agencies must act in alignment with national renewable energy policies and cannot bind producers to lower tariffs without clear agreements.