In a landmark judgement by the Supreme Court on Tuesday, Tata Power Company and Adani Power were disallowed to charge compensatory tariff for power supplied from their respective projects in Mundra to distribution companies.
The court said the companies cannot claim any benefit under the force majeure or sudden unforeseen event clause as “changes in the cost of fuel, or the agreement becoming onerous to perform, are not treated as force majeure events under the PPA (power purchase agreement) itself. The apex court also said power companies can’t raise preset tariffs if fuel becomes costlier due to changes in laws overseas.
Here is a timeline of what happened:
2006: Gujarat Urja Vikas Nigam Ltd (GUVNL) issues public notice inviting proposals for long-term power supply. Haryana utilities also initiate a separate competitive bidding process for purchase of 2,000 MW on a long-term basis.
2007: Tata Power winds bids with Gujarat, Rajasthan, Maharashtra, Punjab and Haryana to sell power at Rs 2.26 per unit.
2008: Adani Power commissions its 1,980-MW coal-based power project in Mundra. Power purchase agreement with utilities in Gujarat and Haryana signed at Rs 2.35 per unit.
2012: Tata Power commissions 4,000-MW ultra-mega power project in Mundra.
2010: The Indonesian coal price regulations change by linking it to international market prices. This leads to cost escalation for Tata Power, Adani who were importing coal for their respective projects.
2012: Adani and Tata go to the Central Electricity Regulatory Commission (CERC) seeking relief from increased coal prices and other allied costs. Both the companies ask for force majeure and seek to pass through cost to state distribution companies
Feb 2014: CERC orders compensatory tariff of 52 paisa per unit for Tata and 41 paisa for Adani.
Apr 2014: Power procuring states go to Appellate Tribunal of Electricity (APTEL) contesting CERC’s decision.
Jul 2014: APTEL upholds decision, allowing Tata Power and Adani Power to charge higher tariffs from state utilities since March 2014 on account of a rise in the cost of imported fuel.
Aug 2014: The procurers reach Supreme Court contesting APTEL’s order. SC asks the tribunal to expedite the matter.
Hit by increased coal prices, companies such as GMR, GVK and Reliance Power also followed suit to seek relief
May 2016: APTEL issues judgment asking CERC to compute the compensation for Tata and Adani, according to the provisions under their respective PPAs.
Dec 2016: CERC again allows the power companies to charge the additional cost of coal from the states. But says Supreme Court to take final decision on the matter.
April 2017: Supreme Court sets aside CERC order on allowing Tata, Adani to charge compensatory tariff. Darian Stewart Womens JerseyShare This