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Submissions on behalf of the Appellant:-

70. It is Appellant's case that Commission disallowed the following amounts under the above component:

(a) Rs. 0.24 Crores (Rs. 2.14 Crores claimed minus Rs. 1.90 Crores allowed) towards construction of the Project Colony during FY 2017-18; and

(b) Rs. 0.28 Crores (Rs. 1.01 Crores claimed minus Rs. 0.73 Crores allowed) towards construction of staff rest room at Dam complex during FY 2018-19.

92. The actual expenditure of Rs. 2.14 Crores (FY 2017-18) and Rs. 1.01 Crores (FY 2018-19) is not merely a self-serving assertion of the Appellant but is corroborated by audited financial statements, contractor bills, and contract documentation. We find that the Commission's disallowance of the excess over the normative figure, without any finding that the actual expenditure was excessive, unjustified, or imprudent, is arbitrary.

93. PSPCL has argued that the Commission correctly disallowed the excess figures/ costs, and that the CIP Order approved only a normative value and not a commitment to allow escalation. In this regard, it is observed by us that the CIP Order did not merely fix a normative value but it conditionally deferred final determination to the true-up stage, upon submission of actual audited accounts. If the Commission's intention was to cap the allowable amount at the normative figure regardless of actual costs, it would not have kept the matter open for true-up. The very act of deferring to the true-up stage implies that the Appellant or any generator/ entity has to complete the work and then claim the actual, reasonable expenditure later at the true-up stage. PSPCL's contention that the Appellant's failure to complete works on time should not burden

B. Miscellaneous (towards procurement of Office Equipment; Tools & Tackles/ Machinery and Computers):

Submission of the Appellant :-

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95. That, the Commission disallowed Rs. 0.54 Crores, which was incurred towards "miscellaneous expenditure" by the Appellant, on account of wrongfully treating the same as an expenditure qua "minor items" which is not allowed in terms of proviso to Regulation 18.2(e) of the PSERC MYT Regulations. While doing so, the Commission proceeded to disallow the entire amount towards purchase of office equipment, plant & machinery, furniture & fixtures and computers during the entire MYT period.

155. PSPCL has argued that the State Commission cannot be expected to accept claims without a prudence check. This Tribunal agrees with this general proposition but the problem is precisely the opposite. The Commission disallowed the claim without conducting any prudence check. A prudence check requires the Commission to examine the nature of the expenditure, the purpose served, the reasonableness of the cost, and whether it falls within the regulatory framework. The State Commission's observation that the store should have been part of the original capital expenditure is unfounded, since the project could not have anticipated in 2005-2006 the precise storage requirements arising during operations after 2012.