CERC approves Reliance Power's petition on change in law for Sasan UMPP

Order allows it to claim increase in duty rate and energy development cess on sale of power to Madhya Pradesh

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Private sector electricity producer, Reliance Power, today said that the Central Electricity Regulatory Commission (CERC) has approved its petition seeking “change in law” during operations related to the company’s 4,000 megawatt (MW) Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh.

“The order allows it (Reliance Power) to claim increase in electricity duty rate and energy development cess on sale of power to the state of Madhya Pradesh and on auxiliary power consumption,” the company said in a statement. 

It added the CERC’s order clearly establishes the principles of Change in Law in line with the terms of the power purchase agreement (PPA) between Sasan Power Limited and the procurers, which will also ease pass-through of future Change in Law impacts on Sasan UMPP.

The electricity regulator has granted one-time compensation of Rs 271 crore till July 31, 2015. “The mechanism for future payments towards change in Electricity Duty Rate and Energy Development Cess has also been approved by the regulatory commission in its order, which provides compensation of over Rs 300 crore per annum at full capacity over the 25 year PPA term resulting in effective tariff increase of about 9 paise per unit (7% increase),” the company said.

According to the firm, the Sasan Ultra Mega Power Project implemented in Singrauli District of Madhya Pradesh is the only 4,000 MW power plant operating at over 100 per cent Plant Load Factor (PLF) in the country.