Tata Power and Adani Power, two of India's biggest private electricity generation companies, may have to wait longer for a decision on their proposals to increase tariffs as the head of the panel hearing their case is due to retire this month.
The departure of Justice M Karpaga Vinayagam, Chairperson of the Appellate Tribunal for Electricity, could delay the process as the appointment of a presiding judge can take a long time, government officials said.
Both companies, which operate separate plants at Mundra in Gujarat, sought higher than-contracted tariffs for electricity sold to state utilities after the price of coal imported from Indonesia increased.
Although APTEL had approved a tariff increase, the Supreme Court stayed the order and asked it to re-hear and expedite the matter, a process that's under way.
"This delay will definitely have a big financial impact on these companies, which have already been incurring losses on account of the Mundra power plants, and more so, on the lenders. The courts need to balance the financial concerns of the state electricity boards with private utilities as power assets like Mundra cannot be allowed to degenerate," said Harish H V, a partner at Grant Thornton India.
Both companies did not respond to e-mailed questionnaires sent by ET. Judge Vinayagam was unavailable for comment despite repeated calls to his office. There has been no new appointment to the position or an official announcement about a replacement for Justice Vinayagam, said an APTEL executive.
Judge Vinayagam's retirement will indefinitely delay the entire process, according to a senior Maharashtra government official with direct knowledge of the matter.
"APTEL did indicate last week that both parties could come to a negotiated settlement separately but that it will continue to hear the matter," the official said, adding that the process is a long-drawn one. APTEL has re-heard the power utilities of Punjab and Haryana and still needs to hear the rest, after which both Tata and Adani will get a chance.
On July 21, APTEL had passed an order allowing an increase of 52 paise per unit and 41 paise per unit to Tata Power and Adani Power, respectively. The decision was challenged by the state power utilities of Punjab, Haryana, Maharashtra and Rajasthan.