Petition of the Electricity Act of the Civil Procedure Code of the CERC (Conduct of Business) Regulations, 2023 – EQ

Summary:

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#### 1. Case Overview & Background

– **Nature of Case:** This is a **Review Petition** filed by a power generator (Dhariwal Infrastructure Limited) against a previous CERC order. The petition was **dismissed** by the Commission for not meeting the legal grounds for a review.
– **Underlying Dispute:** The case originates from a previous petition (No. 263/MP/2024) where DIL had sought approval for capital costs and operational expenses related to installing a **De-NOx (Nitrogen Oxide reduction) system** in one of its generating units (Unit 2).
– **Impugned Order:** The order dated 16.08.2025 (which DIL sought to review) had:
1. Approved the **capital cost** for installing the De-NOx system.
2. **Disallowed** the Operation & Maintenance (O&M) expenses claimed for that system.
3. Allowed the recovery of a supplementary tariff based on the approved capital cost.

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#### 2. Grounds for Review (DIL’s Arguments)

DIL filed the review petition under Section 94(1)(f) of the Electricity Act, 2003, arguing that there was an “error apparent on the face of the record” in the original order. Their key arguments were:

– **Not a Simple Replacement:** DIL contended that the De-NOx system was not a mere “replacement of nozzle tips” as characterized by the Commission. They argued it involved substantial new capital equipment, including:
– New Separated Over-fire Air (SOFA) nozzles with separate dampers and actuators.
– New ducting arrangements.
– New Distribution Control System (DCS) cards, controllers, transmitters, and expansion joints.
– **Incremental O&M Costs:** They claimed that this new equipment required regular maintenance, repair, and dedicated manpower, leading to **additional, recurring O&M expenses** that did not exist before the installation. They argued these incremental costs should be allowed.
– **Prayer:** DIL sought the Commission to review and modify the order to allow the normative O&M expenses as per previous suo-motu orders (dated 13.08.2021 and 29.11.2024).

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#### 3. CERC’s Analysis & Decision

The Commission dismissed the review petition, finding it without merit. The key reasons were:

– **No Error Apparent on the Face of Record:** The Commission held that DIL had not pointed out any clear mistake in the original order. The original decision was based on a factual assessment that the installation was a limited activity (nozzle tip replacement) and did not justify additional O&M expenses.
– **Review is Not an Appeal:** The CERC reiterated the legal principle that a review petition is **not an appeal in disguise**. Its purpose is limited to correcting a clear, patent error, not to allow a party to re-argue the case on its merits. DIL was essentially seeking a reconsideration of the same issue, which is not permissible.
– **Non-Compliance with Review Criteria:** The petition did not satisfy the conditions for a review under its own Conduct of Business Regulations (Regulation 52), which require:
1. Discovery of new and important evidence that was not available earlier.
2. A mistake or error apparent from the face of the record.
3. Any other sufficient reason to review.
– **Clarification on O&M Norms:** The Commission clarified its policy from the suo-motu orders (Petition No. 4/SM/2024):
– Normative O&M expenses for Emission Control Systems (ECS) are admissible at **2% of the admitted capital cost (ACE)** .
– **However, this applies only when actual standalone capital equipment (like SCR/SNCR modules) is installed.**
– Since DIL’s installation did not meet this criterion (it was considered a replacement activity), the O&M claim was rightly disallowed.

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