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Home News Power Sector News Krishnapatnam UMPP - Reliance arm approaches CERC for tariff hike

Krishnapatnam UMPP - Reliance arm approaches CERC for tariff hike

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ADAGThe Reliance Power arm, which is building one of India's largest power stations, wants to revive the 4,000-megawatt (mw) project at Krishnapatnam in Andhra Pradesh by moving the country's electricity regulator for an increase in tariff, people aware of the matter said.

 The imported coal-fired project has been in limbo for over a year and Andhra Pradesh, Tamil Nadu, Karnataka and Maharashtra - which have signed power purchase agreements (PPA) - have threatened to terminate the agreements.

Eleven power distribution companies from the four states have slapped a fine of Rs 400 crore on Coastal Andhra Power, part of the Anil Dhirubhai Ambani Group.

The power utilities also threatened to encash Rs 300 crore in bank guarantees, apart from taking back the land allotted to the project. Contesting the decision of the state-owned power utilities to penalise it for the delay in implementing the project, the Reliance Power arm had moved the Delhi High Court and obtained a stay.

Reliance Power has been arguing that the project turned unviable as the price of imported coal shot up because of a change in Indonesian rules on coal pricing and sought tariff revision citing a 'force majeure' event beyond its control. However, the states declined to raise tariff from Rs 2.33 per unit agreed in 2007.

On Thursday, Reliance Power informed the HC that it plans to move the Central Electricity Regulatory Commission (CERC) seeking a tariff revision so that it can approach lenders with a new power purchase agreement, a lawyer advising the distribution companies told ET. The court has posted further hearing in the case to March 7, 2013.

The counsel, who did not wish to be identified, said the distribution companies (discoms) insisted that Reliance Power should file an affidavit before the court laying out its concrete revised roadmap before the next hearing. The discoms also insisted on meeting the lenders of Reliance Power to ascertain their keenness to fund the project.

Source- Economic Times


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