Reliance Power is likely to save Rs 7,500 crore from its 4000-MW Sasan UMPP as the power regulator, Central Electricity Regulatory Commission (CERC), has allowed the firm to increase tariff by 9 paise per unit or 7 per cent, leading to annual savings of Rs 300 crore for the next 25 years.
The significant relief to Reliance Power triggered its shares to close up 2.6 per cent at Rs 59.95 in a weak Mumbai market on Monday.
“The CERC has approved change in law during operations petition filed by Sasan Power Ltd,” the company said in a regulatory filing, adding that the order allows it to claim an increase in electricity duty rate and energy development cess on sale of power to the Madhya Pradesh government and on auxiliary power consumption.
The CERC’s order clearly establishes the principles of change in law in line with the terms of the power purchase agreement between Sasan Power Limited and Procurers, which will also ease pass-through of future change in law impacts on Sasan UMPP.
“One-time compensation of Rs 271 crore is granted by the regulatory commission till July 31, 2015,” said the CERC in its order, adding that the mechanism for future payments towards change in electricity duty rate and energy development cess has been approved by the regulatory commission in its order.
The CERC order provides compensation of over Rs 300 crore per annum, at full capacity, over a 25-year power purchase agreement term resulting in an effective tariff increase of about 9 paise per unit or 7 per cent, said the company statement, adding that the Sasan UMPP, implemented in Singrauli district of Madhya Pradesh, is the only 4,000-MW plant operating at over 100 per cent PLF in India.
In April last year, the Anil Ambani-led Reliance Group had announced that it had fully attained commercial operations of the Rs 27,000-crore Sasan UMPP , 12 months ahead of schedule, with all the six units generating 3,960 MW of electricity.
Reliance Power has a large portfolio of power projects in the private sector, based on coal, gas, hydro and renewable energy, with an operating capacity of 5,945 MW.
The relief triggered its shares to close up 2.6 per cent at Rs 59.95 in a weak Mumbai market
