Around five months after the Jaypee group sealed the deal to sell two operating hydro power plants to JSW Energy, the Central Electricity Authority (CEA) has restricted the capacity of one of these, Karcham Wangtoo in Himachal Pradesh, to 1,000 Mw as against 1,200 Mw cited by Jaypee in its rate petition.
In November last year, the Sajjan Jindal-owned JSW Energy acquired two hydro power plants of a cumulative 1,391 Mw capacity of Jaiprakash Power Ventures (JPVL) for Rs 9,700 crore. Earlier, the Anil Ambani-promoted Reliance CleanGen was looking to buy Jaypee’s entire hydro portfolio. The deal didn’t go through due to uncertainty on supply rates. Before that, Abu Dhabhi’s Taqa pulled out of the same deal.
The two plants are the 300 Mw Baspa-II, commissioned in 2003, and Karcham Wangtoo, commissioned in 2011, both in Himachal.
Jaypee's rate petition in October 2014 mentioned the capacity of Karcham Wangtoo at 1,091 Mw and which can be escalated to 1,200 Mw, the actual installed capacity. CEA, in a letter last week to the Central Electricity Regulatory Commission (CERC), said project capacity should be maintained at 1,000 Mw (4x250).
Hence, CERC is likely to disallow the excess cost incurred by JVPL for establishing a higher project capacity and would take the proportionately reduced project cost for the purpose of rate determination.
JSW refused to comment. A person close to the development said the change in capacity was factored in the deal valuation but neither of the two companies dwelt on the exact valuation.
The deal was conceived in September and was finalised in November 2014. The procurers of power from Karcham Wangtoo are the states of Rajasthan, Uttar Pradesh, Haryana, Punjab (through Power Trading Corp) and Himachal Pradesh.
