Stop sending bills, DPC tells MSEB

Sanjay Jog

Mumbai, Sept 17: The Maharashtra State Electricity Board (MSEB) has made it clear to the Dabhol Power Company (DPC) that it would not pay any bills towards power purchase since it has repudiated the power purchase agreement (PPAs) on May 23 and stopped purchase of power from May 29. Simultaneously, MSEB has also asked the Dabhol Power Company (DPC) to stop sending monthly bills.

MSEB sources told The Financial Express on Monday that it dispatched a letter in this regard to the DPC on September 15. “Such a letter is necessitated as the DPC had already sent power purchase bills for May (Rs 140 crore), June (fixed charge Rs 106 crore), July (Rs 100 crore), August (Rs 100 crore). However, we feel that we have rescinded the PPA and furthermore the Mumbai high court has yet to decide the issue of jurisdiction of Maharashtra Electricity Regulatory Commission (MERC) to adjudicate dispute between MSEB and DPC,” sources added.

MSEB in its letter has also told the DPC that henceforth it would not entertain any communication with regard to the monthly bills. MSEB is believed to have reminded the DPC that it owes nearly Rs 1,200 crore for the rebate charged for misdeclaration and default on the availability of power.

MSEB’s move has come in the wake of the Mumbai high court’s order allowing the DPC through the Bank of America to invoke a letter of credit facility with Canara Bank for Rs 136 crore towards power purchase bill of April.

Though, MSEB has claimed that it has rescinded its power purchase agreement (PPA) with the DPC for the material misrepresentation and default on the availability of power by DPC on January 28, February 13 and March 29, DPC has not recognised the MSEB’s move.
However, DPC has been insisting that though the “Dabhol project was distressed and its PPA was quite strong and valid.” Sources said that DPC has been banking upon a clause related to the recovery of fixed charge from the MSEB, despite the non-purhcase of power by MSEB.