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RPower files for arbitration against 11 discoms

Reliance Power Ltd has filed for arbitration against 11 state distribution companies to resolve a tariff dispute that is threatening a Rs 17,500 crore ultra-mega power project in Krishnapatnam,Andhra Pradesh.

Written by ENS Economic Bureau | Mumbai | Published: July 3, 2012 2:44:04 am

Reliance Power Ltd has filed for arbitration against 11 state distribution companies to resolve a tariff dispute that is threatening a Rs 17,500 crore ultra-mega power project in Krishnapatnam,Andhra Pradesh.

Changes in export rules by Indonesia,the main source of coal for the proposed 4,000 megawatt (MW) plant,raised prices and were beyond the company’s control,Reliance said. The company has already stopped construction on the plant.

Indonesia’s changes have made about 9,000 MW of power projects in India nonviable,including a 4,000MW plant being developed by Tata Power,because the projects cannot raise tariffs to reflect higher fuel costs. Reliance Power originally bid to supply power at a fixed rate,but is now insisting on a tariff hike to meet the higher fuel costs.

In March,it served notice on the distribution companies that it was seeking an “amicable solution,” but the state-run utilities did not respond,Reliance said,prompting the company to file for arbitration.

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