APTEL disallows compensatory tariff for Adani Group's plants

Energy tribunal APTEL has not allowed compensatory tariff to Adani Group's power plants at Tiroda in Maharashtra and Kawai in Rajasthan as given by state power regulators MERC and RERC in separate orders.

"Since the Maharashtra Electricity Regulatory Commission (MERC) has come to a conclusion that the case of Force Majeure event is not made out, it could not have granted compensatory tariff to Adani Power Maharashtra (which runs Tiroda plant)," Appellate Tribunal of Electricity (APTEL) said in an order.

In another case, it said, "the Rajasthan Commission could not have granted any compensatory tariff..Pertinently, in this case, the Rajasthan Commission has held that a case of Force Majeure or Change in Law is not made out." The compensatory tariff is a tool which is used to provide relief to power generators to pass through the cost escalation due to change in law, Force Majeure or rise in input (fuel) cost.

In its order on April 7, 2016, the APTEL had held that the power regulators or electricity commissions, have no regulatory power to grant compensatory tariff to generating companies where the tariff is discovered by a competitive bidding process.

The tribunal had also said that if a case of Force Majeure or Change in Law is made out, relief available under the power purchase agreement can be granted under the adjudicatory power of these regulators or commissions.

When contacted, a company spokesperson declined to comment on the judgement and further course of action.

However, a source said the company may explore the possibility of approaching the Supreme Court against the order.