States to go to tribunal on compensation to Adani, Tata

Maharashtra, Haryana, Punjab, Gujarat to appeal against power regulator order

The relief the central power regulator gave Tata Power and Adani Power may be short-lived. Four states are set to legally challenge the move by the regulator to let these companies pass on their increased fuel costs to power purchasers.

Maharashtra, Haryana, Punjab and Gujarat have taken an in-principle decision to soon approach the Appellate Tribunal for Electricity (ATE) against the order by the Central Electricity Regulatory Commission (CERC) last month, on compensation of Rs 329 crore for April 1, 2012, to March 31, 2013, to Tata Power's 4,000-Mw ultra mega power project at Mundra in Gujarat.

Besides, these states, with Rajasthan, were asked to pay a compensatory extra rate of Rs 0.524 a unit beyond April 1, 2013.

These states have sought legal opinion for filing separate petitions to the ATE. Maharashtra's share from Mundra is 760 Mw. It is 1,805 Mw for Gujarat, 475 Mw for Punjab and 380 Mw for Haryana.

Gujarat and Haryana are also contemplating filing separate petitions against CERC's order allowing compensation of Rs 830 crore to Adani Power. The latter was to be entitled to a 'provisional lump sum compensation' for the Gujarat power purchase agreement (PPA), Rs 420 crore, and the Haryana PPA, Rs 409.5 crore. Gujarat has tied up for 2,000 Mw and Haryana for 1,424 Mw with Adani Power's 4,620-Mw plant at Mundra.

The procurers were to pay the amount in equal monthly instalments over a period not exceeding 36 months, with the cost for delay in payment at the surcharge applicable as in the PPA. These parameters shall be used for the calculation of compensatory rates on a monthly basis from April 1, 2013, till the hardship on account of Indonesian coal export regulations persisted, the order said.

An official who has been involved in the long-drawn legal and regulatory battle told Business Standard "the states are approaching the ATE on a major issue of sanctity of the PPA signed by these for 25 years. The CERC's order will ensure the financial condition of buyer utilities will further deteriorate."