PSU doesn't need SC nod to pay compensatory tariff to Adani

The Supreme Court today said that a Gujarat-owned discom does not require its permission to pay "compensatory tariff" to Adani Power Ltd and such a decision would be subject to final verdict on the plea of the private power generating firm.
Adani Power Ltd has filed an appeal in the apex court against the order of the Appellate Tribunal for Electricity which had upheld the view of subordinate panel, the Gujarat Electricity Regulatory Commission (GERC).
The GERC, on August 31, 2010, had set aside the decision of Adani Power to terminate its power purchase agreement (PPA) with PSU discom and had asked the private firm to keep supplying electricity as per the terms of PPA.

The private company, which has already filed the appeal in the apex court, has sought an interim relief that the PSU discom be directed to pay it as per "the CERC norms for tariff on cost plus basis; and also make the payment from the date of the supply of power under the PPA of the differential amount between the PPA tariff and the tariff as per CERC norms for tariff on cost plus basis on the such terms and condition as this court deems fit as just and proper".
Disposing of the interim plea, a bench headed by Justice J Chelameswar said, "In so far as the question of permitting the 2nd respondent (PSU) to pay the compensatory tariff as indicated in its counter, we are of the opinion that it requires no permission from this Court.

"It is up to the 2nd respondent to take a decision in accordance with law to the best of its understanding. We may make it clear that if the 2nd respondent chooses to make such payment, the same shall be subject to the result of the appeal."
Adani Power and the PSU had entered into a PPA which provided that the the private firm is obliged to sell 1000 MW of power from its power project.
The private firm, on December 28, 2009, had issued a notice terminating the PPA with the PSU with effect from January 4,2010.