Supreme Court Denies Conduction Of Any Tariff Relief In Tata and Adani Power Plants

On Tuesday, the Supreme Court rolled out an important notice unfavouring their five year old issue of compensating their power plants. The court had promptly denied any scope of relief to the Tata power and Adani Power.

This order has proved as a major model or example for the consumers of power sector. With this, it has been made clear that, not any imposition should be made on the consumers because of any changes in the international regulators. The power plants which are using imported coals are getting weaker and bleaker.

The matter is very much related to the Ultra Mega Power Plant which is Tata Power’s 4000 MW. Also, it has Mundra’s Adani Power possessing 1,980 MW power capacity. These get the coal imported from Indonesia.

The case was running between the two companies along with the state utilities like Maharashtra, Rajasthan, Gujarat, Punjab and Haryana. The case entertained a major issue of bringing changes in the prices because of altered coal prices in the market of Indonesia.

The Appellate Tribunal of Electricity directed to calculate the relief for the two companies by Central Electricity Regulatory Commission.

Contrary to this, the Supreme Court didn’t consider any of these and withdrawing the idea of any type of relief. They even made directions to the CERC that, “go into the matter afresh and determine what relief should be granted to those power generators who fall within Clause 13 of the PPA as has been held by us in this judgment”.

Here, Clause 13 describes the alterations in regulations considering the Indian conditions. As they discussed, Adani and Tata were considering the changes in rates under the influence of international rules, but now the decision is not favouring any relief fort two of them as mentioned by power sector experts.

As the reports say, while the Adani Power was expecting a relief of Rs. 3,000 crore, Tata Power was awaiting relief of around Rs. 2,700 crore.

IDFC mentioned, “It has come as a major negative surprise for the companies involved. However, all the cases pertaining to shortage of domestic coal will be eligible for compensation”.

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