On eve of Sasan start, RPower seeks tariff hike

The move by Reliance Power puts a spanner in the works for the power ministry’s ambitious UMPP programme, wherein developers quoting the lowest tariffs are handed out large-sized projects with pre-project clearances by government agencies. Reliance Power, which had bagged three UMPPs, had stopped work in mid-2011 on its Krishnapatnam UMPP in Andhra Pradesh, invoking the ‘force majeure’ clause.

The Sasan project comes bundled with captive mine blocks. A CAG report last year had pegged undue benefit of around Rs 29,033 crore from a government decision allowing the diversion of “surplus” coal from blocks allotted to Sasan project for Reliance Power’s other projects.

Reliance Power, in its petition, has invoked Article 13.2 of the PPA (read with Section 79(1)(b) of the Electricity Act, 2003) seeking certain reliefs to “recoup/adjust” the project economics for certain “changes in law”, including an increase in water charges by Madhya Pradesh’s water resources department of (notification dated 21.4.2010), an increase in the rate of royalty on coal by the coal ministry (notification dated May 10, 2012), levy of ‘clean energy cess’ by the Centre in the Finance Act, 2010, (Notification dated June 22,2010, issued by the ministry of finance).

Reliance Power has also cited the imposition of excise duty on coal by the Centre in the Finance Act, 2012 (with effect from April 1,2012), change in Income Tax rates introduced in

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