Now, Sasan UMPP can pull the plug on power defaulters

Anil Ambani, owner of Reliance Power
The Central Electricity Regulatory Commission (CERC) has said Sasan Power Ltd (SPL), the entity formed to operate the 4,000 megawatt ultra mega power plant (UMPP) of Reliance Power in Madhya Pradesh’s Singrauli district, can regulate supply to Punjab and Rajasthan in case of payment default by the procurers.

The order of June 10 is in reply to a petition filed by Punjab State Power Corporation (PSPCL) and Rajasthan’s distribution utilities on the issue.

The state utilities had complained that Sasan directed the Western Regional Load Despatch Centre to regulate their supply as they’d defaulted on payment to the company. The utilities were also contesting the commissioning date of the first unit of Sasan and the compensation arising out of it. Rajasthan owes Rs 94 crore and Punjab Rs 142 crore to SPL, said company sources.

“The principal amount (excluding the late payment surcharge) outstanding against Rajasthan utilities and PSPCL shall be paid in four equal monthly instalments (the dates are then specified, the latest by early September),” goes the order.

CERC has directed SPL and the other parties to settle the issue amicably. In case of default in payment on its directions, “SPL will be at liberty to act in terms of the RPS Regulations, read with the provisions of the PPA”. RPS or regulation of power supply regulations, as prescribed in the power purchase agreement (PPA), entitle the power producer to regulate supply, if the procurers don’t pay.

Officials in the Madhya Pradesh government said the state does not have any pending amount to SPL and was getting supply, in line with the PPA. Reliance Power won the tender for the Sasan UMPP by quoting a rate of Rs 1.196 a unit in 2007. SPL was supposed to sell power for the first two financial years at 70 paise per unit and then at Rs 1.19 a unit. Early commissioning would entitle it to Rs 1.19 per unit payment. This early date of commissioning was the basis of three-year tiff between the states and SPL.

The payments mentioned in the latest judgment were the outcome of the order, this March, of the Appellate Tribunal for Electricity (Aptel) on the commissioning date of the first unit of SPL. The order entitled SPL to Rs 1,050 crore as the compensation amount from the procurers. Reliance, in a statement in March, had said, “SPL is to recover the unpaid amount of nearly Rs 850 crore from the procurers. It would also be entitled to nearly Rs 200 crore of carrying cost as per the PPA.”

The case, which dates back to 2013, is on the COD of the first unit of SPL. The WRLDC has said the first unit of Sasan UMPPcould not achieve its full load in March 2013, COD. This in turn led to tripping in the power supply, stated WRLDC. If a power generator achieves early commissioning and full load, it is entitled to more payment.

The case by WRLDC filed in 2013 in APTEL was directed to CERC. The Commission in its order dated August 2014 favoured WRLDC that the COD suggested by the company cannot be accepted as full load could not be achieved by the plant and supply kept of tripping. 

CERC in its decision also directed Sasan to sell power at 70 paisa and not Rs 1.19 per unit.Reliance Power filed an appeal in APTELcontesting the CERC order later in 2015. The APTEL in March 2016 noted this as an "arbitrary and discriminatory treatment by WRLDC and directed the procurers to accept the COD and pay compensation arising out of the decrease in power price.

Sasan power project has six units of 660 mweach and it achieved full commissioning in March 2015. Among the procurers from the plant are utilities in Madhya Pradesh, Uttar Pradesh, Punjab and Rajasthan.

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