Bid & Tender
Rs 1,000-Cr Booster for Reliance Power after Tribunal Order

Date : Apr 04, 2016

Dismissing an order against Reliance Power's Sasan Ultra Project, the Appellate Tribunal of Electricity (APTEL) quashed a three-year-old contentious issue over the commercial operating date of the plant.


The capacity of the Sasan Ultra Mega Power Project (UMPP) is 4,000 Mw. Reliance Power claimed in a statement that it could benefit by Rs 1,030 crore because of the order.


In August 2013, the Western Region Load Dispatch Centre (WRLDC) had filed a case with the APTEL against Reliance Power, claiming that the company could not achieve its full load by March that year, leading to a delay in the date of commissioning (COD). This, in turn, led to tripping of power supply. APTEL had directed the case to the Central Electricity Regulatory Commission (CERC). In an order in August 2014, the commission said the COD suggested by the company could not be accepted as the full load could not be achieved by then.


CERC also directed the Sasan to sell power at 70 paisa - instead of Rs 1.19 - per unit, which was the quoted tariff for the third year.


Reliance Power, in its petition with APTEL, contested the CERC order.


The tribunal noted this was an "arbitrary and discriminatory treatment by WRLDC."


It also said the distribution centre "ought not (to) 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."


Reliance Power (R-Power) was naturally very happy with the outcome.


"The APTEL order now paves the way for Sasan Power Limited to recover the unpaid amount of nearly Rs 850 crore from the procurers. Sasan Power would also be entitled to nearly Rs 200 crore of carrying cost as per the power-purchase agreement (PPA)," said the company. Reliance Power won the tender for the Sasan project by quoting a tariff of Rs 1.196 per unit in 2007. Sasan Power Limited (SPL) was supposed to sell power for the first two financial years at 70 paisa per unit, and then at for Rs 1.19 per unit.


The clause in the projects PPA was that if the unit was commissioned before 31 March, the generator was entitled to increase tariff, otherwise it had to operate on lower tariff for a year. In order to avoid it, SPL decided to commission the unit just days before the deadline - a move termed as "gaming by the generator" by CERC.


Making an exception, the APTEL reprimanded both CERC and WRLDC.