SC refuses to stall CERC proceedings on compensatory tariff

CERC is hearing the pleas by Tata Power and Adani Power to determine compensation under the force majeure clause of power purchase agreement

The Supreme Court on Friday refused to stall the proceedings in the Central Electricity Regulatory Commission's (CERC) in compensatory tariff case but said that the order will be subject to its scrutiny.

A bench of Justices Kurian Joseph and R F Nariman assured the power distribution companies that if they are not satisfied with CERC's decision, they are at liberty to approach the apex court.

Several power distribution companies of Rajasthan, Maharashtra and Punjab have moved the apex court challenging the Electricity Tribunal's decision which had held that power producers are entitled to compensatory tariff and referred the case to CERC for calculating the compensatory tariff.

CERC is currently hearing the pleas by Tata Power Co Ltd and Adani Power Ltd in order to determine the amount of compensation under the force majeure or unforeseen circumstances clause of the power purchase agreement.

The bench posted the matter for further hearing on September 15.

Tata Power's wholly-owned subsidiary Coastal Gujarat Power Ltd and Adani Power had originally moved the CERC seeking higher tariff on the grounds that their input costs had gone up due to devaluation in the rupee and higher costs of coal imported from Indonesia, owing to a regulation passed by the Southeast Asian nation.

After their plea was turned down in CERC, the two companies moved the Electricity Tribunal which ruled that they are entitled to compensatory tariff.