CERC asks RPower to meet states in 15 days to resolve tariff issue

Power sector regulator CERC today asked Reliance Power to discuss with electricity consuming states the proposal to hike tariff from its under-construction Sasan ultra mega power project in Madhya Pradesh in the next 15 days.

CERC (Central Electricity Regulatory Commission) asked the power procurers and producers to convene a meeting amongst themselves by the end of this month and float the minutes of the meeting to all the states, and the generation companies in the fortnight after that. The matter would be taken up by the Commission on April 16.

Madhya Pradesh, being the lead procurer of electricity from the plant and also the host state would circulate the minutes of the meeting to all the stakeholders.

"Whatever normal and prudent time required by the procurers, you should give them," CERC asked Reliance Power.

The submissions of the petitions would be decided after April 16.

Article 17 of the Power Purchase Agreement, which addresses the issue of resolution of disputes, also states that

this channel should be exhausted before coming to CERC.

RPower had petitioned CERC seeking compensation from the government for cost escalation at its Sasan UMPP due to depreciation of the rupee and increase in construction cost.

The 4,000 MW UMPP at Sasan in Madhya Pradesh is being set up by a special purpose vehicle � Sasan Power Ltd at a cost of Rs 20,000 crore.

Reliance Power bagged the project in 2007 quoting the lowest 'levelised' tariff of Rs 1.19 per unit for 25 years.

As per the PPA, the firm can approach CERC for any Change in Law during the Construction period and fluctuation in the value of the rupee.

The company's earlier petition seeking upward revision of tariff from its Sasan UMPP would also be heard after the meeting between the generator and the states.