The Supreme Court on Monday has stayed the electricity appellate tribunal Aptel’s interim order on compensatory tariff, which allowed Tata Power and Adani Power to charge hiked tariff from March 2014.
The apex court has asked the tribunal to hear the matter expeditiously.
Haryana electricity distribution companies had moved SC on August 20 seeking a stay on the electricity tribunal’s interim order.
Aptel in July had allowed Tata Power and Adani Power to recover dues from procurers on account of unforeseen rise in import cost of fuel but maintained that arrears from before March 2013 cannot be recovered by power producers.
As per an estimate, pre-March 2013 dues for Tata Power’s 4,000 MW Mundra plant in Gujarat stand at Rs 330 crore, while the same for Adani’s 1,980-MW is at Rs 830 crore.
Prior to Aptel order, CERC in April last year, had allowed Tata and Adani Power to recover compensatory tariffs from five state discoms that have PPAs with power producers.
Speaking on the move, Harshavardhan Dole, Power Analyst at IIFL, said the SC’s move to ask Aptel to hear the case expeditiously will bode well in the long run.
He thinks that if the apex court takes the view that compensatory tariff should not be given then that could be set as a milestone judgement and would undoubtedly be a big overhang for Adani Power and Tata Power stocks.
“The only good thing is that from Tata Power’s perspective, the stock has already corrected and it will not surely go up from hereon, but if one has to take a balanced view and pick certain stocks from the sector on the long-term perspective, Tata Power is one stock that one should keep in radar,” Dole said. IIFL doesn’t cover Adani.
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