By Sumit Saxena
New Delhi, Aug 31 : In a relief for Adani Power Rajasthan Ltd (APRL), the Supreme Court on Monday upheld the orders passed by the Rajasthan Electricity Regulatory Commission (RERC) and the Appellate Tribunal for Electricity (APTEL), stating that APRL was entitled to compensatory tariff in connection with the power purchase agreements (PPAs) with the Rajasthan discoms.
A bench of Justices Arun Mishra, Vineet Saran and M.R. Shah said: “Considering the facts of this case and keeping in view that the RERC and the APTEL have given concurrent findings in favour of the respondent with regard to change in law, with which, we also concur.”
In March 2008, the Rajasthan government and Adani Enterprises Ltd (AEL) entered into an MoU to set up a coal-based thermal power generation project of 1,200 MW near Kawai in the state’s Baran district.
The estimated cost of the project was approximately Rs 5,000 crore, and Rajasthan was to make the best efforts to facilitate getting the coal linkage from the Centre or coal from any other source for the project. As per the New Coal Distribution Policy (NCDP) of 2008, the Coal Ministry had assured 100 per cent domestic coal to power plants.
AEL asked the Rajasthan government to persuade the Centre to allocate a coal block for its plant. In 2010, APRL executed a PPA with three state discoms for supply of 1,200 MW. In 2013, the AEL, however, did not feature on the Centre’s list for supply of coal, and it made a claim before the state electricity regulatory commission for compensatory tariff, as it had used Indonesian coal to generate power.
In 2018, APRL’s claim was allowed and state discoms filed an appeal before APTEL, which held the bid was based on domestic coal and accordingly, covered under the change in law event in terms of the PPA. The state discoms had then appealed these orders in the apex court.
The top court noted that considering documents on record, it is “apparent that APRL’s bid was premised only on domestic coal. It was evaluated as such, and the PPA also records the same”.
“Various documents and the PPA make it clear that its bid was premised on domestic coal and approved tariff was based on domestic coal, the order of RERC is final, conclusive, and binding on the parties; it has not been questioned and attained finality. No stand contrary to the same was permissible to be taken by the Rajasthan discoms.”
Senior advocate A.M. Singhvi, appearing for APRL, had argued that the bid and the PPA were based on domestic coal. “The tariff was also quoted on the domestic coal linkage format. As the bid was premised on domestic coal, the bid’s evaluation was made on the domestic coal. The PPA also provided for the same, which is binding. The FSA was for imported coal with the bid was only to assess bid eligibility,” he argued.
(Sumit Saxena can contacted at firstname.lastname@example.org)
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