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Power producers seek talks on compensatory tariff issue

CGPL, promoted by Tata Power, has asked the govt to take restrictive steps to prevent stakeholders from challenging power purchase agreements

BS Reporter  |  New Delhi 

To avoid any parallel ruling before the appellate tribunal takes a decision on a compensatory tariff, Coastal Gujarat Power Ltd (CGPL), the ultra mega power project (UMPP) promoted by Tata Power, has asked the government to take restrictive steps against the stakeholders to prevent them from contesting any legal issue of the power purchase agreement. Haryana’s power utilities last week moved the Supreme Court, seeking relief from the Appellate Tribunal for Electricity (Aptel)’s interim order allowing an additional tariff to be levied by CGPL and Adani Mundra power plant on account of rise in fuel cost. The court stayed the Aptel’s interim order, ruling out any hike in tariff and asked the tribunal to finalise the matter expeditiously. Power producers have demanded the government initiate a dialogue on the compensatory tariff issue with chief ministers/energy ministers and energy secretary, heads of distribution of the affected states of Gujarat, Haryana, Maharashtra, Rajasthan and Punjab. “Procurers and sellers shall not contest or press before Aptel legal issues related to jurisdiction of CERC (Central Electricity Regulatory Commission) and the regulatory power of CERC to re-determine/revise/re-open PPAs concluded under section 63 of the Electricity Act, 2003,” said the request letter sent to the ministry of power. The letter added discoms should agree that Aptel’s decision on quantification/operational issues would be final and no appeal would be preferred in the apex court. Aptel also said it would review the rate-setting powers of the CERC.

The interim order dated July 21 questioned on several points whether CERC had any regulatory role in determining rates or any of its components, once a PPA had been signed between a generator and procurer. The compensatory tariff is added to the levelised tariff offered by a power producer, and is on account of variable costs such as fuel. In its petition to CERC, Tata Mundra UMPP said the cost of imported coal from Indonesia had increased and state utilities buying power needed to pay for the escalation in production cost. CERC acceded to the same, which was later challenged in Aptel by the discoms. Higher tariff after March 2014, which was ruled out by SC, would have fetched Tata’s Mundra UMPP Rs 25,000 crore and Adani’s project an additional Rs 18,500 crore over its remaining life.


POWER PUNCH

  • CGPL, promoted by Tata Power, has asked the govt to take restrictive steps to prevent stakeholders from challenging power purchase agreement
  • Haryana’s power utilities moved the Supreme Court, seeking relief from Appellate Tribunal for Electricity’s interim order allowing CGPL and Adani Mundra power to charge extra on account of fuel price hike
  • The court stayed Aptel’s interim order
  • Power producers sought talks with chief ministers/energy ministers and energy secretary, heads of discoms

First Published: Tue, September 02 2014. 00:20 IST
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