 "Coal Ministry issues show-cause notice to R-Power over Tilaiya UMPP")
Following a Supreme Court judgment on Thursday, Reliance Power is set to lose the additional benefit of close to Rs 1,050 crore from Sasan Ultra Mega Power Project (UMPP).
The case pertains to a four-year-old contentious issue over the commercial operating date (COD) of the 4,000-Mw plant. Consumers in four states are likely to benefit from the apex court order.
The case was filed by the states that procure power from Sasan UMPP. The SC ruled against the company rejecting the COD of the UMPP.
Earlier, the company had won the case in the Appellate Tribunal of Electricity, which allowed RPower to recover the amount as arrears. This followed an appeal against the ruling of Central Electricity Regulatory Commission (CERC), which quashed the petition of R-Power to recover the amount.
The Western Region Load Dispatch Centre (WRLDC) in its application to the Commission has said the first unit of Sasan UMPP could not achieve its full load in March 2013, which led to delay in commissioning date.
This, in turn, led to tripping in the power supply, said WRLDC.
WRLDC filed a case in 2013 in APTEL but was directed to CERC.
The Commission in its order dated August 2014 favoured WRLDC that the COD suggested by the company cannot be accepted as full load could not be achieved by the plant and supply kept of tripping.
CERC in its decision also directed Sasan to sell power at 70 paise and not Rs 1.19 per unit.
Reliance Power filed an appeal in APTEL contesting the CERC order. The APTEL noted this as an “arbitrary and discriminatory treatment by WRLDC.
The load dispatch centre ought not be permitted to single out Sasan especially since WRLDC was seeking clarifications regarding the commissioning and COD process for all generating stations whose tariff is not determined under Section 62 of the Electricity Act, 2003”.
The spokesperson of Reliance Power did not comment. The company was fighting for additional benefit of Rs 1,050 crore as an outcome of the order. This includes Rs 850 crore from the procurers and Rs 200 crore of carrying cost according to the PPA.
Reliance Power won the tender for Sasan UMPP by quoting a tariff of Rs 1.196 a unit in 2007. Sasan Power (SPL) was supposed to sell power for the first two financial years at 70 paise a unit and then at the levellised tariff of Rs 1.19 a unit.
The clause in UMPP's PPA is that if the unit is commissioned before March 31, the generator is entitled to increase in tariff.
Otherwise, it has to operate on lower tariff for an year. In order to avoid the same, SPL decided to commission the unit just days before the deadline, termed as ‘gaming by the generator’ in CERC's terms of sector.
Sasan Power project has six units of 660 Mw each. According to the Supplemental Power Purchase Agreement, Reliance brought forward the date of commissioning of all of its six units. Sasan UMPP achieved full commissioning in March 2015. Among the procurers from the plant are utilities in Madhya Pradesh, Uttar Pradesh, Punjab and Rajasthan.
How things unfolded
* March 2013: Sasan UMPP achieves COD of first unit
* August 2013: WRLDC files case in APTEL against Sasan for not achieving full load
* APTEL directs case to CERC
* August 2014: CERC rules in favour of WRLDC saying Sasan could have achieved full load, noted 'gaming of power by R-Power'
* CERC asks Sasan to sell power at 70 paisa per unit than Rs 1.19 per unit
* R-Power contests CERC decision in APTEL
* March 2016: APTEL rules in favour of Sasan. Says COD not in purview of WRLDC
* Dec 2016: SC rules against APTEL order. R-Power to not get arrears close to Rs 1,050 crore
