In a decision set to put huge additional liability on power utilities, the Haryana Electricity Regulatory Commission (HERC) has granted relief to Lanco Amarkantak Power Limited by raising its generation tariff.
The two-member commission headed by Jagjeet Singh has, in a detailed order last week, raised generation tariff from Rs 2.32 per unit to Rs 2.88 and Rs 2.92 per unit for power purchased by the state distribution companies from the private firm in 2011-12 and 2012-13 respectively.
The revision in generation tariff would mean additional outgo of approximately Rs 140 crore for state utilities, Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN), for power received from the 300 mega watt Unit-2 of Lanco's thermal power plant at Amarkantak in Chhatisgarh during the two-year period, sources told HT.Lanco, which was to supply power from the unit to Haryana through the Power Trading Corporation for 25 years at levelised capped tariff of Rs 2.32 per unit, had stopped supplying power thereafter due to non-availability of coal.
While any such increase is passed through to the consumers, the power companies, which vehemently opposed the tariff revision application in HERC hearings, may challenge the rate hike before the Appellate Tribunal for Electricity (APTEL).
A discom official said that they would decide after assessing the full impact of the order. While the commission chairman was not available, HERC director, tariff, Sanjay Varma, told HT that the commission was bound by the orders of the Supreme Court and the demand order of APTEL to re-determine tariff in the Lanco Unit-2 case in accordance with the HERC Tariff Regulations, 2008 dehors the power purchase agreement which is still sub-judice before the court.
The power purchase deal, which has run into prolonged litigation, was signed by the Bhupinder Singh Hooda-led Congress government in a hush-hush manner in 2006 in contravention of the National Tariff Policy. While the extant guidelines made bidding mandatory for all power purchases, the government decided to buy 370 MW power from Lanco's two plants in Chhatisgarh and Himachal Pradesh through PTC by way of long-term power purchase agreements.
While a consultancy firm engaged by the Haryana Power Generation Corporation Limited (HPGCL) had opined that the Amarkantak project was not in line with the tariff policy and, therefore, required the bidding route, the power department preferred the negotiation route. "Strictly going by the tariff policy, it appears that we shall have no choice but to ask bids for power procurement on long term basis...there are various possibilities in the tendering process. We may get a lower tariff or a higher tariff than now offered. These IPPs may or may not participate in the bid," it had argued before the cabinet. The government had approved the proposal.
In 2009, Lanco unilaterally terminated its agreement with PTC, leading to litigation in HERC, tribunal and the apex court on a range of issues including generation tariff and coal linkage. In March 2011, APTEL asked the company to supply 65% power from Amarkantak Unit-2 to Haryana.
After the Supreme Court, in an interim order in December 2011, directed it to fix the tariff for sale and purchase of power, the HERC worked out the tariff of Rs 2.52 per unit, but decided that the capped tariff of Rs 2.32 per unit shall prevail. Last year, the tribunal had set aside the commission's order and directed the commission to re-determine the tariff.