SPL had claimed that the unprecedented, unforeseen and uncontrollable steep depreciation of the rupee was a force majeure event.The Supreme Court on Thursday refused Reliance Power-promoted Sasan Power’s (SPL) claim for higher tariff for its 4,000-MW project, located in the Singrauli district of Madhya Pradesh, saying the issue was covered by an earlier judgement. SPL had claimed that the unprecedented, unforeseen and uncontrollable steep depreciation of the rupee was a force majeure event. The apex court had last week put to rest an important issue, when it held that such unforeseen increase in the cost of coal would not be a ‘force majeure event’ under the power purchase agreements (PPAs) between power-generating companies and distributions companies. A bench led by justice PC Ghosh remanded SPL’s case back to the appropriate authority, to be decided afresh in terms of its last week’s judgment that also rejected Tata Power and Adani Power’s claim to recover compensatory tariff for additional fuel costs that they are incurring due to expensive coal imports in their plants in Mundra, Gujarat.
Sasan Power had claimed urgent need to devise a mechanism to revise the tariff for the project to factor in the impact of steep depreciation of the rupee and consequent increase in the equity contribution required to make good the increase in project cost. CERC had in February 2014 rejected SPL’s claim that the unprecedented, unforeseen and uncontrollable steep depreciation of the rupee was a force majeure event. SPL had challenged the full bench of Aptel’s judgment that held that CERC has no regulatory power under the Electricity Act to vary or modify the tariff determined through a competitive process.
It also held that the commission cannot grant any relief to SPL on account of unprecedented, unforeseen and uncontrollable steep depreciation of the rupee vis-a-vis the dollar, which as per the company, had impacted project economics. The company stated that the tribunal had erred in concluding that the tariff determined under the Act is sacrosanct and cannot be tampered with to ensure sanctity of the bidding process.