Four discoms to challenge CERC order

The CERC’s order, termed balanced by analysts, had allowed the entire pass through of fuel cost borne by the generating companies.

The electricity distribution companies, which are the procurers of electricity from Tata Power and Adani Power, have already received permission from the cabinets of their respective State governments to challenge the CERC order in the Appellate Tribunal for Electricity (APTEL). File photo

Four state-run electricity distribution companies (discoms) are learnt to have decided to challenge the Central Electricity Regulatory Commission’s (CERC) recent order, allowing compensatory tariff for the Ultra Mega Power Projects (UMPP) of Tata Power and Adani Power at Mundra in Gujarat.

The electricity distribution companies, which are the procurers of electricity from Tata Power and Adani Power, have already received permission from the cabinets of their respective State governments to challenge the CERC order in the Appellate Tribunal for Electricity (APTEL), it is reliably learnt.

These procurers are believed to be moving the APTEL in the next few days, according to officials. Two people familiar with the development have confirmed this to

The Hindu .

The four procurers included the distribution companies of Punjab, Haryana, Maharashtra and Gujarat, they said. The stance taken by Rajasthan, the fifth procurer, was still not clear.

The procurers believe that the compensatory tariff granted to the power generating companies to offset the unexpected escalation in price of imported coal, would put additional financial burden on them and their consumers. For them, the Power Purchase Agreement (PPA) signed with the generating companies was sacrosanct, and any increase in tariff would make the competitive bidding process irrelevant.

In February, the CERC had asked electricity procurers (Gujarat, Rajasthan, Punjab, Haryana and Maharashtra electricity boards) to pay Rs.329.45 crore as compensatory tariff to Tata Power’s Mundra unit for the period April 1, 2012 to March 31, 2013. Besides, a compensatory tariff of 52 paise per kWh was granted from April 1, 2013.

The regulator had also granted Rs.830 crore compensation for Adani Power’s Mundra plant. Gujarat was asked to pay Rs.420.24 crore while Haryana was asked to shell out Rs.409.51 crore. From April 1, 2014, Adani Power is scheduled to charge 55 paise a unit extra from Gujarat and 36 paise extra from Haryana as per the CERC order.

The CERC’s order, termed balanced by analysts, had allowed the entire pass through of fuel cost borne by the generating companies. This was to deal with sudden change in law in Indonesia, which made imported coal costly, rendering plants unviable.