Reliance Power Ltd has said that it has taken its dispute with the 11 electricity distribution companies in four States, which had entered into power purchase agreements with it, to the Indian Council of Arbitration.

The issue relates to the development of the Rs 17,500-crore, 4,000-MW Krishnapatnam Ultra Mega Power Project in Andhra Pradesh by Coastal Andhra Power Ltd, a wholly owned subsidiary of Reliance Power.

‘Act of God’

Reliance Power seeks renegotiation of power purchase agreements following changes in mining regulations in Indonesia, from where it proposes to bring coal for the power plants. Reliance Power feels the change in laws to be beyond its control and therefore “force majeure,” or an “act of God”.

Indonesia decided last year to link export prices of coal to international prices and mandated mining companies to allocate 24.2 per cent of their annual production for domestic use.

More recently, in March, Indonesia said that foreign mining companies should bring down their stake in the domestic special purpose vehicles to 49 per cent over a 10-year period. The Indian Government is seeking “special status” for India through the India-Indonesia Joint Working Group on Coal.

“Project abandoned”

The discoms, led by the chief procurer, Andhra Pradesh Central Power Distribution Company, feel that Reliance Power is hiding behind Indonesia’s regulations and had abandoned the project.

Reliance won the project in November 2007, quoting a uniform tariff of Rs 2.33 a unit for 25 years. The project would supply 1,600 MW to Andhra Pradesh, and 800 MW each to Tamil Nadu, Karnataka and Maharashtra. Seeing no progress, Andhra Pradesh Central Power Distribution Company sent notice to Reliance in April saying that it would invoke the bank guarantee, effectively forcing Reliance Power pay Rs 400 crore.

In March, Reliance Power approached the Delhi High Court and got an order which, according to Reliance, restrained the discoms from taking any “coercive steps”.

The court today dismissed Coastal Andhra Power’s petition against the 11 electricity buyers. In its order, the court said “…no case is made out by CAPL for continuation of the interim order passed in its favour on March 20, 2012.

The petition is accordingly dismissed, and the interim order dated March 20 is vacated, but in the circumstances with no orders as to costs.”

In its notification to the stock exchanges on Monday, Reliance Power said that its subsidiary had sent a dispute resolution notice on March 13, 2012, for an amicable solution, but the power procurers did not respond to the notice.

“Today’s filing is in continuation of the same,” it said.

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