CERC raises tariff of Sasan power due to rise in levies

Power regulator CERC has allowed Anil Ambani-led Reliance Power to raise tariff for its 4,000 MW Sasan plant for passing on expenditure due to increase in royalty, clean energy cess and excise duty on coal.
The Central Electricity Regulatory Authority (CERC), in its order delivered on February 19, has also allowed compensation of Rs 347.67 crore due to increase in royalty, clean energy cess and excise duty on coal during financial years 2013-14, 2014-15 and April-August period in 2015-16.
However, the CERC order will result in marginal increase in tariff of the power supplied to 14 power distribution companies contesting the claims of Reliance Power.

The company had approached the commission seeking higher tariff from the Sasan UMPP, saying imposition of excise duty, clean cess on coal and high rates of royalty amounted to change in law and it should be allowed to be passed on to consumers.
"In the present case, the compensation of Rs 19.18 crore, Rs 143.90 crore and Rs 184.59 crore have been allowed in the years 2013-14, 2014-15 and 2015-16 (up to August 2015) respectively," CERC said in its order.
It further said: "If the compensation allowed is higher than the threshold limit as may be worked out in accordance with Article 13.2 (b) of the PPA (power purchase agreement), the petitioner shall claim the compensation from the beneficiaries (discoms) in proportion to their respective contracted capacity in the project."

The Commission said that in subsequent years, the compensation shall be paid on monthly basis and monthly compensation payment 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.
However, the commission has also said, "In case of reduction in royalty on coal, clean energy cess and excise duty on coal, the petitioner shall compensate the procurers on the basis of above principle.