The Appellate Tribunal for Electricity (Aptel) on Monday stayed the recovery of Rs 330 crore and Rs 830 crore in arrears by Tata Power and Adani Power, respectively, from discoms buying power from their Mundra plants.
The tribunal granted the stay while issuing an interim order in appeals filed by discoms in five states against the Central Electricity Regulatory Commission’s (CERC) orders issued in February this year, which allowed compensatory tariff to cover the spike in imported (Indonesian) coal prices. It, however, did not grant any stay order on recovery of losses due to the rise in fuel costs post March 2013.
The next hearing is on August 19.
March 2013 was taken as the cut-off date by the CERC for fixation of compensatory tariff for the two plants as petitions were filed by Tata Power and Adani Power with the regulator in April 2013.
According to analysts, this is a positive development for the power sector, especially Reliance Power which has filed similar petitions before the CERC for Krishnapatnam, Sasan and Tilaiya UMPPs.
The CERC had, in its final compensatory orders issued in February this year, ruled that Tata Power and Adani Power could recover losses suffered by them on fuel costs from the date of commissioning of their respective plants (or September 2011 when Indonesia increased its coal price) till the end of March 2013 as arrears along with current under-recoveries. The lump-sump amounts were payable by discoms in 36 monthly equated installments.
For FY 13-14, the compensatory tariff works out to 41 paise/unit for Tata Power’s Mundra ultra mega power project which supplies electricity to discoms in five states — Maharashtra, Rajasthan, Haryana, Punjab as well as Gujarat. For Adani Power’s nearby plant, compensatory tariff averages at 55 and 9 paise/unit for discoms in Gujarat and Haryana.
For the period beyond March 2014, compensatory tariffs will be calculated by taking into account the differential between the prevailing coal price in the international market and the prices quoted by Tata Power and Adani Power in bidding for these projects.
Both Tata Power and Adani Power had to take haircut of 1% each on their return on equity in the respective projects. Further, profits from their coal mining operations in Indonesia were also deducted to the extent of coal supplies to their Mundra plants for calculation of compensatory tariff.
As per an estimate, Tata Power and Adani Power will get additional tariff of R25,000 and R18,500 crore over their remaining life if international coal prices at the same level as in 2013-14. The formula for calculation of compensatory tariff was worked out by a panel chaired by Deepak Parikh, chairman, HDFC Bank.
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