RPower says: APTEL allows fuel cost pass through for its plant

Anil Ambani-led Reliance Power today said that one of its arms Vidarbha Industries Power has got relief from Appellate Tribunal for Electricity (APTEL) as it has upheld fuel cost pass-through in the tariff for its 600 MW plant in Maharashtra.
This will allow the company to recover enhanced cost of power based on higher fuel cost.
"APTEL judgement provides regulatory clarity & certainty for VIPL," Reliance Power said in a statement.
Vidarbha Industries Power Ltd (VIPL), a subsidiary of Reliance Power Limited, had challenged Maharashtra Electricity Regulatory Commission (MERC) on 20 June, which partially disallowed fuel costs for FY2014-15 and FY2015-16.

The said MERC order pertained to truing up for FY14-15, provisional truing up for FY15-16 and Multi-Year Tariff for FY16-17 to FY19-20.
MERC had earlier approved the Power Purchase Agreement for Butibori Project of VIPL under Section 62 of Electricity Act.
"APTEL found merit in VIPL's contentions against the disallowance of fuel costs in the said MERC order. APTEL observed that once PPA is approved under Section 62 of Electricity Act, the basic principles of tariff determination as per Section 62 have to be followed, where the fuel cost is pass-through in tariff," Reliance Power said in the statement.
"APTEL observed in its judgement that actual fuel mix used must be allowed while undertaking the prudence check. APTEL has accordingly asked MERC to rework fuel cost pass-through based on the decisions in its judgement," it further added.