Adani Power: SC orders status quo on compensation awarded by APTEL

Our Bureau Mumbai | Updated on March 01, 2021

State-run MSEDL had appealed against an order to compensate the power major

The Supreme Court has ordered status quo in the Maharashtra State Electricity Distribution Company’s (MSEDL’s) plea against the Appellate Tribunal for Electricity’s decision to grant compensation to Adani Power.

The State-owned power distribution company MSEDCL had contracted purchase of electricity from Adani Power’s 3300 MW Tiroda Power Plant operated by Adani Power Maharashtra.

The electricity from the power plant was to be supplied under four Power Purchase Agreements.

The tariff was on fixed basis with no compensation over and above the quoted tariff as the supply of electricity was in accordance with Section 63 of the Electricity Act 2003. The tariff is evaluated based on the parameters and the source of fuel as indicated by the bidder. The tariff would be firm for the entire term of the power plan PPA.

Notwithstanding the above, APML sought compensation under ‘Change in Law’ and the same was allowed by the state regulator Maharashtra Electricity Regulatory Commission and the Appellate Tribunal for Electricity.

MSEDCL approached the Supreme Court challenging the APTEL order in favour of APML. The apex court took up the matter for hearing last Friday and ordered to maintain the status quo, besides issuing notice to APML.

The status quo order means that the APML can retain the compensation paid.

Coal supply

APML was to generate electricity using the coal mined from Lohara Coal Blocks and supply the same from Tiroda Power Plant to MSEDCL.

Adani Power did not respond to a mail sent by BusinessLine.

APML filed a petition before MERC for grant of relief due to withdrawal of Terms of Reference (ToR) for the grant of Environmental Clearance for Lohara (West) and Lohara (Extension) Coal Blocks.

MERC held that all stakeholders must bear some burden of the hardship caused by withdrawal of ToR for Lohara coal blocks. It formed a committee to look into the details of the case and decided a compensatory charge to be provided to APML.

The responsibility of arranging fuel for electricity generation and further supply under the PPA to MSEDCL was solely of APML and it undertook known risk of arranging captive fuel from Lohara Coal Blocks.

The end consumers of electricity in Maharashtra were forced to shell out more charges for the electricity supplied by MSEDCL due to compensatory claims of APML.

Published on March 01, 2021

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