Supreme court throws lifeline for tata, adani, essar power plants. Cerc for package to adani powers mundra project business news. We have to finalise the order, cerc chairman pramod deo told pti in an interview. The outcome is likely to take some time as the utilities can challenge the cerc order at the appellate tribunal. Adani power limited central electricity regulatory. Adani power limited is the power business subsidiary of indian conglomerate adani group with head office at ahmedabad, gujarat. Cerc allows tata power, adani to pass through the losses suffered by them due to procuring high price coal from indonesia to run their power plant. Feb 23, 2014 cerc allows compensation for tata power, adani power the electricity regulator has asked five states to pay additional charges to tata power and adani power as the price of imported coal has gone up. The order has suggested a practical solution for a practical. Implementation of the directions of the government of india dated 28. Central electricity regulatory commission new delhi petition no. Cercs final tariff regulation for fy2024 largely in line.
The cerc has also approved, vide its order dated 11th march 2019, carrying cost over change in law relief for domestic coal shortfall pertaining to the ppa. With no bail out option, adani power mundra may move nclt. Future of compensatory tariff in light of the supreme. Tata power, adani power rally over 5% post cerc order. May 16, 2017 the central electricity regulatory authority cerc has granted adani power full compensation for the rise in the cost of electricity generation at its 4,620mw thermal power plant at mundra.
Cerc orders compensatory tariff for adani power the hindu. The urgency of the move can be attributed to rbis new. The central electricity regulatory commission cerc has granted nearly compensation of rs 830 crore for adani power s 4,620mw mundra plant in gujarat. Limited and adani power mundra limited for approval of. Sep 14, 2017 in the judgment delivered on april 11, 2017, on the issue of validity of compensatory tariff, the supreme court has put an end to the unbalanced use of regulatory power, upheld the sanctity of contracts and significantly restricted the impact of power tariffs in light of consumer interest. Tata, adani power tariff hike order challenged times of india.
Cerc to shortly finalise orders in tata, adani cases the. Orders rerc jaipur rajasthan electricity regulatory commission. The coal for the power plant is imported primarily from indonesia. C201612464 page 1 of 4 fair competition for greater good 31.
Tata power company is confident of getting regulatory approvals for higher tariff for its lossmaking mundra ultra mega power project after the central electricity regulatory commission cerc has set a precedent by allowing adani powers power plant in mundra to pass through imported coal cost to power consumers, a top executive of tata power told et. Adani powers troubled mundra plant gets cerc relief the. Tata power and adani power likely to be the key beneficiaries. The source of water for the power plant is sea water from gulf of kutch. Power sector regulator cerc has said adani power should be granted compensation package for its mundra project which would provide a cushion against the escalation in cost of imported coal for. Mundra ultra mega power project or mundra umpp is a subbituminous coalfired power plant in tunda village at mundra, kutch district, gujarat, india. Against this order, adani power filed an appeal before the supreme court, and. Tata power, adani power rally over 5% post cerc order the regulator allowed tata power to raise tariffs and receive compensation to make up for. The central electricity regulatory commissions cerc s order allowing tata power and adani power higher tariffs to compensate for increased cost of coal imports has been challenged in. Consumers in five states, including gujarat, will have to foot higher electricity bills once the cerc order pro viding relief for tata power and. Sep 15, 2018 this resulted in a rise in the cost of coal for these power plants which affected their economic and financial calculations.
The companies immediately sought relief from the electricity regulators adani power and the tata group approached the cerc while essar approached the gujarat electricity regulatory commission. Feb 21, 20 in both tata power and adani power cases we have completed the hearings. May 23, 2016 electricity regulator cerc has granted nearly rs 830 crore compensation for adani powers 4,620 mw mundra plant in gujarat. Electricity regulator cerc has granted nearly rs 830 crore compensation for adani power s 4,620 mw mundra plant in gujarat. Apr 11, 2017 big blow to adani power and tata power. And in the matter of gujarat urja vikas nigam limited sardar patel vidyut bhavan. Apr 04, 20 the central electricity regulatory commission cerc has in a landmark order proposed a compensation package for adani power to offset higher fuel costs at its mundra gujarat power project. There is no change in law as per the cerc order and adani power will have to continue to supply as per the power purchase agreement. Competition commission of india combination registration no. Supreme court throws lifeline for tata, adani, essar power. Major relief for tata power, adani in compensatory tariff case. Cerc for relief package to adani powers mundra project. The purchase of 1424 mw by haryana from adanis mundra thermal plant in gujarat has become costly after central electricity regulatory commission cerc allowed compensatory tariff for increase in cost of imported coal from indonesia.
Cerc grants rs 830 cr compensation to adani powers mundra. The company is indias largest private thermal power producer, with capacity of 12,410 mw adani power was ranked as the 73rd largest corporation in india in fortune india 500 list of 2018. Adani power gets cerc breather on mundra tariff rediff. That said, for the beleaguered power sector fsasppasstretched working capital, etc any potential change in ownership is a zerosum game in our view. Cerc has many a times stated that the merit order shall be based on energy chargevariable charge to ensure least cost purchase of power. Power cost to rise postsupreme court order on compensatory tariff. Jul 03, 2019 while setting aside the decision of the appellate tribunal for electricity, the judgment rendered by the bench of justices arun mishra, br gavai, and surya kant allowed adani power to approach the central electricity regulatory commission cerc for determination of compensatory tariff for the power the company supplied to guvnl.
Cerc order lights up adani power, but creates moral hazard 2 min read. While providing relief to tata power and adani power, the central electricity regulatory commission cerc had used its powers to regulate tariffs under the electricity act of 2003, and argued. Adani power, which had entered into power purchase agreements ppas with state utilities in gujarat and haryana for sale of power, approached the cerc with a request for relief on. India rating and research the final the cerc guidelines for the fy2020 to fy2024 block period are favourable for power generators, as they are largely in line with the draft guidelines, indra said in a statement. The central electricity regulatory commission cerc order on wednesday granting compensation package to adani power for its mundra power project has come as a. Cerc for package to adani powers mundra project business. Tata power s whollyowned subsidiary coastal gujarat power ltd cgpl and adani power went to the cerc seeking higher tariffs on the grounds that their input costs had gone up due to a.
Determination of forbearance and floor price for the rec framework. Cercs adani order has set precedent for mundra tariff hike. With no bail out option, adani power mundra may move nclt for bankruptcy protection. It is also noted that the merit order concept is not followed uniformly among all sldcs and adopting different approaches. Order the petitioner, a subsidiary of adani enterprises ltd, has set up a generating station, mundra power project, with a total capacity of.
Adani power central electricity regulatory commission. Jul 19, 2016 the central electricity regulatory commission cerc order on wednesday granting compensation package to adani power for its mundra power project has come as a whiff of fresh air for the. The high power committee hpc conducted various meetings with the. Apr 10, 2019 cerc s final tariff regulation for fy2024 largely in line with draft guidelines. Allahabad high court upholds ris february 12 order. In the judgment delivered on april 11, 2017, on the issue of validity of compensatory tariff, the supreme court has put an end to the unbalanced use of regulatory power, upheld the sanctity of contracts and significantly restricted the impact of power tariffs in light of consumer interest. Petition under section 791f of the electricity act, 2003 read with regulations 85 and 86 of the central electricity regulatory commission sharing of interstate transmission charges and losses regulations, 2010, read with clause 4 of the bulk power transmission agreement dated 8. The supreme court has asked the cerc to submit in 8 weeks its decision of changes to ppas that adani power, tata power and essar power have signed with power discoms to reflect the higher cost of. Cerc directs tata power arm to get discoms consent for. As per the order, apls claim for t on the grounds of f orce. Supreme courts order on compensatory tariff powers. Cerc allows compensation for tata power, adani power the.
The amount is to make up for the losses incurred by the project due to. Adani power was rejected by the appellate tribunal as not maintainable. Future of compensatory tariff in light of the supreme court. Apr 10, 20 last week, the central electricity regulatory commission cerc passed an order relating to adani power that has significant implications for the power sector in india. The petitioner had entered into separate ppas for purchase of power from i mundra ultra mega power project mundra umpp of coastal gujarat power limited. Sc refuses to stay cerc proceedings on compensatory tariff. May 16, 2017 adani power shares rallied over 11 per cent intraday on tuesday after the company was given relief by central electricity regulatory authority cerc for its mundra plant.
Central electricity regulatory commission new delhi petition. Supreme court green light to end adanigujarat power purchase. On 31st october, 2014, the appellate tribunal rejected the prayer for condonation of delay and consequently appeal no. India court asks regulator to decide on tata, adani power. Cerc allows tata power, adani power to pass through high cost. Adani power rallies over 11 per cent on cerc relief to its. Sc upholds termination of ppa by adani power against gujarat. May 16, 2017 adani power stock jumps by close to 8% after getting relief from cerc the cerc has recently granted full compensation to adani power for the rise in the cost of electricity generation at its 4620. Appellate tribunal for electricity cerc india other important links energy. Pursuant to the order of honble supreme court dated 29.
The supreme court decided adani power mundra was right in terminating. Tata power and adani power approached cerc claiming that change in indonesian. Shares of adani power surged nearly 9 per cent today amid reports that cerc has granted relief to the companys unit. Although technical parameters set in the bid are considered vs actual for calculation of compensatory tariff, it allows near complete recovery of fuel cost and hence eliminates fuel risk. Experts hail sc order, say will help firms to provide power to states at competitive rates power sector experts have hailed the supreme courts order asking the central electricity regulatory commission cerc to give its findings on the proposed amendments in power purchase agreements ppas for the coalbased plants of tata, adani and essar power within eight.
The petitioner, adani power mundra limited has set up. Cercs power to regulate tariff by exercising its powers under section. The central electricity regulatory commission cerc has in a landmark order proposed a compensation package for adani power to offset higher fuel costs at its mundra gujarat power project. It is the 3rd largest operational power plant in india.
I n a landmark order, the central electricity regulatory commission cerc, the countrys power sector regulator, has allowed a compensatory tariff for adani power s importedcoalbased. While this order gives temporary relief to adani in terms of pricing of power supplied to gujarat and haryana, analysts are not very optimistic from a longterm point of view on the companies that are affected by coal shortage and higher coal prices. Cerc s adani order has set precedent for mundra tariff hike. Adani powers mundra project to get rs 830crore tariff. The urgency of the move can be attributed to rbis new guidelines for identification of stressed assets, under. Last week, the central electricity regulatory commission cerc passed an order relating to adani power that has significant implications for the power sector in india. Industry update cerc compensatory tariff orders 2 compensatory tariff orders.
In feb14 cerc allowed compensatory tariff hikes for the two major power sector players namely tata powers mundra umpp and adanis 4620 mw coal based power plant located in gujarat. The development comes after cerc, on april 12, allowed tariff hike for adani power s 2,000 mw capacity that supplies power to the gujarat discom guvnl. Tata power is arguing that the promulgation of the indonesian regulation is an event. Order the petitioner, a subsidiary of adani enterprises ltd, has set up a generating station, mundra power project, with a total capacity of 4620 mw in the special economic zone at mundra in the state of gujarat. Order on extended market session on power exchanges page 1 central electricity regulatory commission new delhi petition no. Cerc sercs would allow the higher cost of coal as a pass through to. Oct 29, 2018 court asks cerc to decide in 8 weeks on amending contracts.
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