Hopes of a quick resolution to the compensatory tariff issue have receded with the Appellate Tribunal for Electricity (APTEL) now likely to hear the matter afresh once the post of technical member is filled in July. The two petitions for compensatory tariff involve Mundra-based Tata Power’s ultra mega power plant (UMPP) and Adani Power’s 4,620-MW thermal plant at the same location.
Industry experts and the companies involved were hoping for a decision before the superannuation of the tribunal’s technical member who retired on May 20. However, the tribunal has decided for the full bench to be constituted with the appointment of a technical member and a fresh hearing to resume before a final order.
Orders were reserved in the Tata Power and Adani Power cases after arguments were concluded on April 29 and May 13, respectively. However, on May 26, the tribunal put out a notice saying both petitions “shall be listed before the full bench”.
“We expect that the government would appoint a technical member soon after the tribunal resumes business after the summer vacation in July. The ministry is currently considering 2-3 candidates for the post,” an administrative official at APTEL told FE. He added that fresh hearing did not mean repeat of the entire set of arguments already heard, but hearing on a ‘few contentious’ points.
“APTEL has been hearing the matter for about 18 months, and the order has been reserved for the past four months.
After this delay, re-commencement of the hearing afresh creates great disconcertment in the minds of investors about the efficiency of dispute resolution processes in the country,” Shravan Sampath, CEO, Oakridge Energy, an advisory firm in the power sector, told FE.
Last year in August, the Supreme Court had stayed an interim order by the APTEL allowing Tata Power and Adani Power to charge higher prices from procurers than agreed upon in the power-purchase agreements (PPAs) for electricity produced from their plants. The apex court directed the tribunal to dispose of the matter speedily.
On 21 July, APTEL passed an interim order, which partially upheld Central Electricity Regulatory Authority (CERC) order, by allowing an increase of 52 paisa per unit and 41 paisa per unit to Tata Power and Adani Power, respectively, for the electricity produced from the Mundra-based plants. The higher tariff was allowed due to a sharp surge in Indonesian coal after the government changed rules.
The tribunal’s order was subsequently challenged in Supreme Court by the power distribution utilities of Maharashtra, Haryana, Rajasthan and Punjab that have been buying power from these two plants under long-term PPAs.