Supreme Court declines stay on payment to Sasan UMPP

Tripods of television crew stand in front of the Supreme Court building in New Delhi
The Supreme Court on Wednesday declined to stay an order of the Appellate Tribunal for Electricity (APTEL) that directed a group of state electricity distribution companies to pay around Rs 1,050 crore to Reliance Power's Sasan Power Ltd (SPL).

The apex court admitted an appeal filed by these companies and issued a notice to SPL. APTEL had set aside the order of August 2014 of the Central Electricity Regulatory Commission, which had rejected the claim of commercial operation date (COD) by Sasan Power Ltd. It had also made some adverse remarks against the engineer who had certified the COD. Thereafter, the All-India Power Engineers’ Federation had approached the court.

The states utilities that moved the court included those of Uttar Pradesh, Madhya Pradesh, Haryana and Punjab. Tata Power Distribution Co and Ajmer Vidyut Nigam were also arrayed on the state side.

The Bench, after hearing the appeals, issued a notice on the stay application to Sasan, asking it to respond to the appeals. But the court did not set any date for the next hearing on the main issues.

Several state electricity corporations had signed power purchase agreements (PPAs) for Sasan UMPP but a dispute arose on the COD. The distribution companies did not accept March 30, 2013, as COD and took 2013-14 as the first year of commissioning.

If the test certificate was taken as the basis for commissioning date, the first year of operation for the power plant would be 2012-13, during which it got about 70 paise a unit (kilowatt per hour) for the power supplied from the power plant. The tariff was to stay for the second year but from the third year, the tariff was to rise more than 70 per cent. The third year would be pushed ahead by a year if 2012-13 was not considered as the first year.

RPower had threatened to cut off supply if its dues worth around Rs 1,050 crore were not cleared. APTEL had set aside a CERC order that had rejected the COD date. These states utilities were asked to pay in instalment and one instalment has been paid, said a person close to the dispute. Aggrieved by the tribunal order, the utilities had approached the apex court.

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