Haryana threatens legal action against Adani Power for snapping power supply

Haryana govt accuses APL of disconnecting 1,424 MW of contracted power to the state "arbitrarily" and with "malafide intention" on August 27

Miffed at snapping power supply "unilaterally", Haryana government today threatened to take legal action against Adani Power Limited (APL) by charging it with the "breaching terms" of power purchase contract.

Haryana government accused APL of disconnecting 1,424 MW of contracted power to the state "arbitrarily" and with "malafide intention" on August 27.

"We will take legal action against APL as the power supplier has disconnected power supply to Haryana unilaterally. We will charge the company with the breach of contract and decision in the regard will be taken in next couple of days," Haryana Secretary Power Anil Malik told PTI here.

Haryana power officials said that the APL disconnected power supply to Haryana, accusing the state owned power distribution companies of not providing Escrow account as per Power Purchase Agreement (PPA) signed with the company.

"Haryana distribution companies gave a letter from OBC (Oriental Bank of Commerce), mentioning that the default escrow account had been opened and company could execute the agreement on August 28.

But on August 27, APL cut off the entire capacity to the Haryana discoms," Haryana power officials alleged.

"The company never pressed for opening Escrow earlier and they suddenly discontinued the supply," said Malik.

He said the power distribution companies had never defaulted in making payment to APL ever since the PPA was signed.

"In the present scenario where the rainfall in deficient by 60 per cent of the Long Period Average in Haryana and the agriculture demand is almost double than last year such a move from APL was arbitrary and uncalled for and depicts a malafide intention," said a Haryana government release.

Haryana power distribution companies pay Rs 300 crore per month on an average to APL for power purchase.

Haryana had contracted 1,424 MW of power from APL in 2007 from its power project located at Mundra in Gujarat.

Power from APL was contracted at a levelised tariff of Rs 2.94 per unit for 25 years. In February this year, the central electricity regulatory commission (CERC) had accepted pleas by Tata Power and Adani Power for higher tariffs following a change in the pricing regime by the Indonesian government for coal exports from that country.

CERC had awarded the compensatory tariff over and above the normal tariff, about 61 paise per unit, to APL which was challenged by Haryana in Appellate Tribunal for Electricity (APTEL) to protect the interest of 55 lakh electricity consumers of the state, said Haryana power officials.

This decision would have put "huge" financial burden of about Rs 1,400 crore per year (about Rs 35,000 crore for Haryana over the life of PPA --25 years) that would have affected the 55 lakh consumers of the state, Haryana power officials said.

Aptel, in its interim order, had stayed the recovery of past dues and allowed only current charges as per actual from March 14, 2014 onwards.

In view of huge financial burden that would have come on consumers because of the interim order, the same was challenged in the Supreme Court by Haryana.