APTEL rejects claim for compensation for alleged generation loss in absence of agreed timelines under the Connection Agreement.

Sahu Hydro Power Pvt. Ltd.

v.

Himachal Pradesh Electricity Regulatory Commission & Ors.(Appeal No. 401 of 2018, Judgment dated 06.01.2026)

The Appellate Tribunal for Electricity (“APTEL”), by its judgment dated 06.01.2026, has dismissed the appeal filed by Sahu Hydro Power Pvt. Ltd. (“Generator”) and upheld the order of the Himachal Pradesh Electricity Regulatory Commission (“HPERC”) rejecting the claim for compensation on account of alleged generation loss arising from delay in commissioning of evacuation facilities.

The dispute arose from a claim raised by the Generator alleging that although its 5 MW small hydro project was ready for commissioning, the evacuation infrastructure at the 33/220 kV Karian sub-station was commissioned at a later stage, resulting in restrictions on evacuation and consequential generation loss. The Generator sought compensation from Himachal Pradesh Power Transmission Corporation Ltd. (“HPPTCL”) by relying on the Connection Agreement, provisions of the Indian Contract Act, 1872, and judicial precedents.

APTEL, after a detailed examination of the contractual framework, regulatory scheme, and the conduct of the parties, upheld the findings of HPERC and rejected the compensation claim. The Tribunal noted that the Connection Agreement did not prescribe any mutually agreed timelines for completion of transmission works, nor did it provide for automatic compensation in the absence of a separately agreed PERT chart, milestones, or indemnification mechanism as expressly contemplated under Recital D of the Agreement. In the absence of such agreed timelines, no breach could be attributed to HPPTCL.

The Tribunal further observed that grant of connectivity merely reserves transmission capacity and does not, by itself, confer any right to physical interconnection by a particular date. Physical connectivity is governed by the applicable regulations and procedures, including the requirement of advance submission of details and deposit of interconnection costs by the generator. In the present case, the Generator had deposited the bay charges only in March 2018, and HPPTCL had provided physical connectivity within a reasonable period thereafter. In these circumstances, the claim for generation loss was found to be unsustainable.

Rejecting the reliance placed on the Supreme Court decision Indsil Hydro Power, APTEL held that the said decision turned on materially different facts involving reciprocal obligations under a power purchase arrangement and could not be extended to a case involving a State Transmission Utility acting in its statutory capacity without any obligation to purchase power or provide evacuation within an implied timeline. The Tribunal also held that subsequent amendments to the connectivity regulations could not be applied retrospectively in the absence of express legislative intent, and could not be relied upon to create a right to compensation for past periods.

The judgment reinforces the principle that claims for compensation in the electricity sector must be founded strictly on contractual obligations and the applicable regulatory framework, and cannot be sustained in the absence of agreed timelines, breach, or fulfilment of reciprocal obligations by the claimant.

The judgment can be accessed here