'SC order on power sector regulators positive for producers'

The recent apex court order upholding the statutory powers of regulators to review tariffs in power purchase agreements is a positive regulatory development for generation entities, domestic ratings agency Icra said today.

"The recent SC orders...is a positive regulatory development for generation entities, which are in dispute with off-takers over the review of tariff, arising out of reasons/events which are uncontrollable," Icra said in a statement.

"While these orders are a positive development for the IPP segment, it can be observed that the tariff re-determination/ compensation-related issues are unlikely to be resolved quickly," Icra Ratings Senior Vice President Sabyasachi Majumdar said.

"Further, orders issued by APTEL/CERC/SERCs, whichever way they may favour - are likely to be contested and SC has itself noted in one of the cases that the final orders issued by the regulators shall be subject to its scrutiny," Majumdar added.

On July 5, the Supreme Court upheld the order issued by the Appellate Tribunal for Electricity for re-determination of the tariff by Gujarat Electricity Regulatory Commission (GERC) in case of power purchase agreements (PPAs) signed by IPPs - namely Tarini Infrastructure Ltd (TIL ) and Junagadh Power Projects Pvt Ltd (JPPPL) with the Gujarat Urja Vikas Nigam Ltd (GUVNL), it said.