APTEL disallows compensatory tariff for Adani Power

The Dollar Business Bureau

APTEL (Appellate Tribunal of Electricity) has not permitted compensatory tariff to the power plants of Adani Group at Kawai in Rajasthan and Tiroda in Maharashtra, as given in separate orders by the states’ power regulators - RERC and MERC.

In an order, APTEL said that as the MERC (Maharashtra Electricity Regulatory Commission) has come to a decision that the Force Majeure clause case is not made out, it could not have allowed compensatory tariff to Adani Power, which operates the Tiroda plant in Maharashtra.

In another case, the energy tribunal said, “The Rajasthan Electricity Regulatory Commission (RERC) could not have allowed any compensatory tariff. Therefore, in this case, the Commission has said that a case of Force Majeure or Change in Law is not made out.”

The APTEL, in its order on April 7 this year, had held that the electricity commissions or power regulators, have no authority to provide compensatory tariff to power generators where the tariff is calculated by a competitive process of bidding.

The tribunal further said that if a case of Change in Law or Force Majeure is to be made out, compensation available under the agreement of power purchase can be provided as per the adjudicatory rights of these commissions or regulators.

The compensatory tariff is said to be a tool which is utilised to give relief to power generation companies to overcome with the cost appreciation due to amendment in law, increase in input cost or Force Majeure.

Adani Power Limited, a subsidiary of Adani Group, is the largest private power producer in India, with an installed capacity of 10,480 MW. In addition to Tiroda and Kawai plants, the company has plants at Mundra in Gujarat and Udupi in Karnataka. Mundra is the world’s largest private single location coal-based power plant.