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New Delhi: The Supreme Court on Monday offered a ray of hope to three failed power projects led by Adani Power Ltd., Tata Power Co. Ltd. and Essar Power Ltd. Supreme Court has asked the Central Electricity Regulatory Commission (CERC) to make a decision within eight weeks on the changes to be made to the power purchase agreements signed by the three companies. Gujarat electricity producers with distribution companies to reflect the higher cost of imported coal.
While the verdict effectively paves the way for the renegotiation of electricity tariffs The Supreme Court also authorized Energy Watchdog, a consumer rights group, prior to the CERC. Electricity groups in Maharashtra, Rajasthan, Punjab and Haryana have signed power purchase agreements with Adani Power, Tata Power and Essar Steel.
Electricity producers seeking to increase rates to compensate for losses due to higher cost of imported coal, two Rohinton F. Nariman J. asked regulator to rule on all issues related to the LPP amendments.
Adani Power, Tata Power and Essar Power had cited in 2010 a change in the Indonesian rules as a case of force majeure. the cost of coal imported from this country to supply their power plants.
In April 2017, the Supreme Court overturned a 2016 Electricity Appeal Tribunal (Aptel) order authorizing Adani Power and Tata Power to impose so-called compensatory rates.
Experts said the verdict would help revive energy projects. "This is an opportunity for the regulator to strike a balance between the interests of all stakeholders, including customers, developers and lenders, to be pragmatic and to ensure that capital badets are used properly. This can pave the way for the resolution of fixed badets in the industry, "said Sambitosh Mohapatra, an electricity and utilities partner at PwC India.
The capacity of nearly 66 gigawatts (GW) in India is facing various financial difficulties. This includes 54.8 GW of electricity from coal, 6.83 GW of gas badets and 4.57 GW of hydroelectricity.
The order was released Monday following the recommendations of a committee formed by the Government of Gujarat and chaired by a former judge of the Supreme Court. Justice RK Agrawal will examine the possibility of a "contribution from each stakeholder, including banks, project designers and buyers, as concessions to alleviate the difficulties."
The panel noted that coal-fired energy projects needed to be recovered and allowed to proceed. The impact of high fuel costs equitably on consumers, lenders and other stakeholders.
A government official from Gujarat, asking for anonymity, said that one of the committee's important observations in his draft report was that compensation would be "prospective" and not "Retrospective effect". According to the project, the burden on consumers would rise to about 40 pesos per unit.
Coastal Gujarat Power Ltd. (CGPL) of Tata Power and Adani Power had previously contacted the CERC for higher rates on the ground that their input costs had disappeared due to the depreciation of the rupee and the rising costs of imported coal from the United States. Indonesia, as a result of a regulation pbaded by the nation of Southeast Asia in 2010. On April 2, 2013, CERC had rejected Adani Power's "force majeure" plea. . "but constituted a committee charged with proposing the payment of a compensatory tariff to the electricity company." CGPL's application was rejected on April 15 of the same year.
Adani group's word declined to comment, claiming that "we have not yet read the order." A spokesman for Essar Power declined to comment on the Supreme Court's order. word of Tata Power did not answer phone calls or text messages.
In June 2017, Tata Power proposed to sell 51% of the capital of its subsidiary CGPL, which operates the 4,000 megawatt (MW) plant. ) Mundra, a nominal $ 1 to supply companies that had agreed to purchase electricity from the project, and Adani Power subsequently proposed to divest a portion of its 4,620 MW Mundra, at $ 1, Essar Power presented a similar proposal for its 1,320 MW plant located in Salaya.
"Today 's verdict indicates that the power purchase agreements concluded as a result of competitive bids can be backed by the Cerc for interstate power plants, "says a regulation of Gujarat relative to the regulation of electricity. A Commission official asking for anonymity.
Maulik Pathak in Ahmedabad contributed to this story.
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