Tariff Regulation Victory: Kartik Seth Appears as RERC Admits RVUNL's Post Cut-Off Capitalisation Claim for SSCTPP Units 7 & 8

RERC Allows Major Post Cut-Off Additional Capitalisation for RVUNL’s SSCTPP Units 7 & 8 | Kartik Seth Appears in Landmark Tariff Regulation Matter

In a significant regulatory ruling with far-reaching implications for power generation tariff determination in Rajasthan, the Rajasthan Electricity Regulatory Commission (RERC) has allowed a major post cut-off date additional capitalisation claim for Rajasthan Vidyut Utpadan Nigam Limited’s (RVUNL) Suratgarh Super Critical Thermal Power Plant (SSCTPP) Units 7 and 8. Advocate Kartik Seth, appearing alongside Advocate Ankit Sharma, represented the matter before the Commission — securing an outcome of considerable financial and regulatory significance for the State power generation utility.

The Case at a Glance

The matter concerned RVUNL’s claim for additional capital expenditure incurred after the cut-off date for SSCTPP Units 7 and 8 — two critical thermal generating units in Rajasthan’s power generation portfolio. Under the RERC Tariff Regulations 2019, and specifically Regulation 17, the treatment of post cut-off date capitalisation is a carefully governed and often contested area. The central question before the Commission was whether the additional capital expenditure claimed by RVUNL could be admitted and factored into the tariff determination framework — a question with direct implications for how costs are recovered and how electricity tariffs are ultimately structured for consumers across the State.

The Regulatory Framework: Regulation 17 and the Cut-Off Date Mechanism

The cut-off date mechanism in electricity tariff regulation exists to bring discipline and certainty to capital cost claims by generating stations. Once a generating unit is commissioned, a cut-off date is fixed — typically two years after the declared date of commercial operation — beyond which additional capitalisation is ordinarily not admitted unless specific regulatory conditions are met. Regulation 17 of the RERC Tariff Regulations 2019 governs the circumstances under which post cut-off additional capitalisation may nonetheless be allowed, subject to a prudence check by the Commission. The RERC’s decision to allow the claim in this matter reflects a careful application of this framework — acknowledging that genuine, prudent capital expenditure incurred after the cut-off date, where properly substantiated, deserves regulatory recognition. This is not a routine outcome, and securing it required precise, well-grounded advocacy before the Commission.

Kartik Seth’s Role

Appearing alongside Advocate Ankit Sharma, with Advocate Umang Gupta appearing on the other side, Kartik Seth brought his established expertise in energy regulatory proceedings to bear in presenting RVUNL’s capitalisation claim before the RERC. Matters of this nature — involving detailed engagement with tariff regulations, capital cost accounting, prudence check standards, and the Commission’s discretionary jurisdiction — demand a practitioner who is as comfortable with the technical and financial dimensions of power sector regulation as with its legal framework. Kartik Seth’s consistent practice before the RERC and his deep familiarity with Rajasthan’s electricity regulatory environment made him well-placed to navigate the complexities of this claim and present it in a manner that secured the Commission’s approval.

Why This Ruling Matters

The RERC’s decision to allow major post cut-off additional capitalisation for SSCTPP Units 7 and 8 is significant for several reasons. First, it affirms that the regulatory framework under the RERC Tariff Regulations 2019 is capable of accommodating genuine capital investment needs of generating stations even after the cut-off date, provided the prudence check is satisfactorily addressed. Second, it provides important regulatory certainty for RVUNL as it continues to operate and maintain these critical generating units. Third, and more broadly, it contributes to the growing body of RERC precedent on post cut-off capitalisation — guidance that will be relevant to future tariff petitions filed by generating utilities across Rajasthan.