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The Supreme Court has stayed an interim order passed by the Electricity Appellate Tribunal allowing payment of compensatory tariff to Tata Power and Adani Power to meet higher fuel costs.
A Bench of Justices JS Khehar and Arun Mishra while staying the order observed that companies cannot seek to hike tariffs because of any unforeseen and unprecedented escalation in prices of imported coal after bagging contracts to supply power on the basis of competitive bidding. The two power producers had sought a hike in tariffs to compensate for an increase in the price of imported coal that fuelled the power plants.
Tata Power supplies electricity to Maharashtra, Gujarat, Rajasthan, Haryana and Punjab and had agreements with these States. Following escalation in fuel costs, it moved the Central Electricity Regulatory Commission seeking a hike in power tariff. Similarly, Adani Power which had entered into long-term agreements with Gujarat and Haryana sought hike in tariff. Early this year, the CERC allowed both the companies to charge higher tariff to the States. The State utilities challenged this order before the Appellate Tribunal that directed them to pay compensatory tariff for March-May to two power producers in six equal instalments. The utilities moved the apex court against this interim order.
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