Gujarat Urja Vikas Nigam (GUVNL) has approached the electricity regulator to withdraw support of higher tariff to Adani Power’s imported coal-based Mundra power plant, alleging breach of terms of the relief package. The power distribution utility of Gujarat has also sought refund with interest of excess power tariff paid to Adani Power due to fuel cost pass through.
In its petition to the Central Electricity Regulatory Commission (CERC), GUVNL has prayed to recall the commission’s order passed on April 12, granting approval to Mundra Thermal Power Station passing on the burden of imported coal costs to the consumer.
CERC had approved the higher tariff by making provisions through new ‘supplementary agreements’ to the original power purchase agreements between Adani Power Mundra and GUVNL. Adani Power’s Mundra plant had signed two power purchase agreements (PPAs) of 2,000 mw with the Gujarat government in February 2007.
GUVNL has asked CERC to declare that Adani Power has been in breach of the ‘supplemental agreements’ signed in December 2018 and also pronounce the two supplemental agreements ‘void’ and ‘not enforceable.’ The discom has alleged breach of the add-on contracts by Adani Power, which, after signing them, moved Supreme Court to end one of the agreements. A senior GUVNL source said the discom has paid 90% of the revised tariff to Adani Power under the add-on PPAs.
An Adani Power spokesperson declined comment. The company’s stock has more than doubled since October when a high powered committee appointed by Gujarat government recommended the relief to three imported coal-fired plants in Gujarat. The share last traded at Rs 60.50 apiece on the Bombay Stock Exchange against Rs 26 apiece on October 3, 2018.
The petition, to which the government of Gujarat has also been made a respondent, mentioned that after the settlement with GUVNL was approved by CERC on April 12, Adani Power on May 20 filed an application before Supreme Court to get one of the PPAs terminated.
GUVNL has said that Adani Power has breached the supplemental agreements as it should not have claimed any retrospective relief for its units. As per the supplemental agreements, the relief was available only from October 15, 2018.
The Supreme Court on July 2 allowed Adani Power Mundra to terminate the PPA with GUVNL from 2010 as it could not get coal supply on time from the Naini block of Gujarat Mineral Development Corporation. The court also asked CERC to decide compensatory tariff for power supply to GUVNL by the Mundra plant. GUVNL has filed a review petition in the Supreme Court.
“Without prejudice to the above insofar as GUVNL and the government of Gujarat are concerned, they had bonafide proceeded with the scheme for redressal of the hardship to Adani based on the representation given by Adani and had finalised the redressal on the specific stipulation that Adani shall not claim any relief in respect of the period prior to October 15, 2018 on any account whatsoever... However, later developments in the matter and the action taken by Adani has established that Adani has misrepresented the position in regard to the sacrifices being made and as obtained the substantial advantage of getting increased tariff for the period from October 15, 2018.”
Tata Power, Essar Power and Adani Power had offered majority stakes in their imported coal-based power plants in Gujarat to the state government at Rs 1 each post an adverse ruling on April 11, 2018, by the Supreme Court.
Later on the Gujarat government set up a high powered committee that recommended fuel cost pass through. The state again approached the apex court that on October 29 last year agreed and directed CERC to decide on the supplementary agreements. Adani Power was first of the three plants to get the pass through benefit.
Referred from economic times