Reliance Sasan UMPP to get compensation for water charges & coal cess

The change in input prices were ruled under 'change of law' and the CERC held that the power generator needs to be paid for same

The Central Electricity Regulatory Commission (CERC) allowed compensation for escalated water charges and clean energy cess on coal to Reliance’s Power 4,000 Mw Ultra Mega Power Project (UMPP) in Sasan, Madhya Pradesh.

The change in input prices were ruled under "change of law" and the regulator held that the power generator needs to be paid for same.

The regulator asked the six states - MP, UP, Uttarakhand, Rajasthan, Haryana and Punjab — which procure power from UMPP to compensate the increased input cost of water, royalty of coal and clean energy cess on coal.

RPower in its petition mentioned the state government of Madhya Pradesh revised water charges from Rs 4 in 2010 to Rs 5.50 currently.

“Before the increase in water charges, the petitioner was required to pay only Rs.31.08 crore. Now the minimum yearly impact is Rs 57.51 crore and maximum yearly impact is Rs 63.90 crore,” noted the CERC decision.

Reliance also submitted that the impact of the imposition of clean energy cess on coal till 28.2.2015 is Rs 81.89 crore. As regards excise duty on coal, the impact till same period is Rs 61.36 crore.

CERC in its decision said, “The payment of compensation under Change in Law shall commence with effect from 16.8.2013 (i.e. date of commercial operation of first unit of the generating station) and the compensation during a contract year shall be in due consideration of the date of commercial operation of the units of the generating station.”

The compensation would be paid on a monthly basis and “shall be effective from the date of start of supply of scheduled energy to the procurers or from the date of Change in Law whichever is later,” said the chief regulator.