Tata Power and Adani Power could get more generous regulatory relief for their Mundra power plants in terms of tariff increases as the Appellate Tribunal for Electricity (Aptel) on Thursday held that force majeure be invoked to compensate them. The tribunal set aside the compensatory tariff order issued by the Central Electricity Regulatory Commission (CERC) in 2013, saying the commission had no power to modify tariffs for developers that had entered into power purchase agreements (PPAs) through the tariff-based competitive bidding route. It, however, asked the CERC to compute relief to the two firms under the PPA\u2019s force majeure clause within three months. Analysts said tariff increases under force majeure could be higher than what the CERC had earlier provided. While the regulator had to balance the interests of the consumer, lenders and developers when it computed the relief, invoking force majeure would require complete elimination of the impact of the detrimental event on the two gencos. In April 2013, CERC had estimated the compensatory tariff to Adani Power at R0.851 per unit and R0.364 per unit for the PPAs with utilities in Gujarat and Haryana, respectively, and R0.524 per unit for Tata Power for all its buyers. Aptel said: \u201cWe hold that the increase in price of coal on account of the intervention by the Indonesian Regulation as also the non-availability\/short supply of domestic coal in case of Adani Power constitute a Force Majeure event in terms of the PPA.\u201d In the case of Tata Power\u2019s arm CGPL, which runs the 4,000-MW Mundra ultra mega power plant, however, scarcity of domestic coal was not a factor, and the spike in Indonesian coal price itself constituted force majeure. Aptel, however, ruled against the use of the PPAs\u2019 Change in Law clauses, saying the \u201cElectricity Act should not be construed to include laws other than Indian Laws such as the Indonesian Law \u201cWith this order, the process seems to be moving into a decisive and positive phase, where a final outcome can possibly be expected soon. A force majeure situation permits both the procurer and generator greater flexibility in terms of reaching an agreed way forward with necessary oversights,\u201d said Ashok Khurana, director-general of the Association of Power Producers (APP). According to Sakya Singha Chaudhury, partner, HSA Advocates, the judgment is of immense importance for the electricity sector as it lays down certain ground rules on how contracts entered through competitive bidding process need to be construed by the regulator in case of disputes. Immediately following the Aptel order, the stocks of Tata Power and Adani Power fell 12% and 11%, respectively, but both recovered part of the lost ground as the favourable implications of the ruling became clear \u2014 at the end of trade, the stocks were down 2.75% and 3.65%, respectively. Back in 2007, Tata Power had emerged as the L1 bidder for the 4,000 MW Mundra UMPP by quoting a levellised tariff of `2.26 per unit for power supply to Gujarat, Maharashtra, Haryana, Punjab and Rajasthan. The project was envisaged to be operated on imported coal, for which the company also purchased a 30% stake in an Indonesian mining company. As for Adani Power's 4,620-MW Mundra plant, the company has been seeking compensatory tariff for PPA of 1,000 MW with Gujarat utilities and 1,424 MW with Haryana utilities. Adani Power quoted a levellised tariff of `2.35 per unit for Gujarat utilities and `2.94 per unit for Haryana utilities.