In an unexpected blow to Adani Power and Tata Power with respect to their power projects at Mundra, the Supreme Court set aside the appeal for compensatory tariff filed by the companies with the Appellate Tribunal for Electricity (APTEL). While the Tata Power project has a capacity of 4,000 Mw, Adani Power's is 4.620 Mw.
While the details of the court's order are awaited, the compensatory order being set aside implies a huge earnings setback for Tata Power and Adani Power.
In their appeal to Aptel, Tata Power and Adani Power had claimed a change in Indonesian regulations in 2010 had led to the increase in the cost of imported coal be used to run their power plants.
In response to this appeal, Aptel had ruled in favour of the two companies in April 2016, stating that both needed to be compensated, as any change in Indonesian laws on the export price of coal was outside their control. In effect, such a development should be deemed a force majeure event under the power purchase agreements (PPAs) they had signed with distributors.
Setting aside Aptel's order, the Supreme Court asserted that the force majeure clause could be invoked only if there was a change in domestic laws.
Stocks of both companies fell sharply on Tuesday, with Tata Power shedding 1.95 per cent to close at Rs 85.40 on the Bombay Stock Exchange, while Adani Power lost as much as 16.12 per cent to end the trading session at Rs 37.20
 "Power Tariff")
