R-Power successfully tests Sasan, but March commissioning stands

The date in question impacts revenue by 70%

Anil Ambani-promoted Reliance Power (R-Power) got a reprieve from the appellate tribunal on a dispute relating to the commissioning of the Sasan ultra mega power project in Madhya Pradesh, but the first unit of its power plant completed a successful test for full capacity only on August 14, said a senior government official.

Sasan Power Company (SPL), a subsidiary of R-Power, has been claiming March 30, 2013, as the commissioning date for the power plant.

A 72-hour performance test for the 660-Mw first unit was completed on August 14 late evening, the official told Business Standard. "The test for full load in accordance with the power purchase agreement and regulations has now been done. We have started scheduling the power," said a Western Regional Load Dispatch Centre (WRLDC) official.

If March 30 is taken as the basis for commissioning date, the first year of operation for the plant would be 2012-13, during which it gets a rate of about 70 paise a unit (kilowatt per hour), said another government official who did not want to be named.

The same rate continues for the second year, but from the third year onwards, this rises, giving the company more than 70 per cent increased revenue. The third year gets pushed ahead if 2012-13 is not considered the first year.

SPL had retaken the performance test between August 11 and August 14, which also got completed successfully and satisfactorily, confirmed an R-Power spokesperson. The new test was undertaken in "the larger interests of nation, procurers, consumers, etc, so that power generation at highly competitive costs can start expeditiously, without having to await resolution of legal issues".

In an email response, the spokesperson said SPL had conducted the commissioning test of its first unit of the 3,960 Mw (UMPP) in March 2013 itself and all the procurers accepted the test and gave consent for scheduling power. "Accordingly, the unit stood commissioned in March itself. It is a matter of record that the order of the CERC (Central Electricity Regulatory Commission) denying March test has been set aside by the appellate tribunal," he said.

The appellate tribunal had asked CERC to take up the case afresh. In its June 20 order, CERC had held that under the power purchase agreement and CERC's own rate revisions, commercial operation of a unit of the generating station can be declared only after it is demonstrated that the tested capacity is not less than 95 per cent of the contracted capacity. "Since the tested capacity was only 101.38 Mw as against the required tested capacity, we direct SPL to carry out the fresh testing in accordance with the power purchase agreement," said the order.

The CERC order came on a WRLDC petition which said the Sasan unit was not able to achieve full load and stable operation and was affected by multiple problems.