The Maharashtra Electricity Regulatory Commission validated Adani Power’s claim for compensatory tariff from state-owned discom Maharashtra State Electricity Distribution Company (MSEDCL) for additional costs incurred in supplying power from its 3,300 MW Tiroda plant, after the allocation of the Lohara coal block withdrawn due to environmental reasons.
Analysts estimate the compensation could be around Rs 2,500 crore (including carrying costs) for the supplies in the 2013-2018 period.
Holding that the cancellation of the coal block qualifies as a ‘Change in Law’, the state power regulator asked the discom to reimburse the company for the expenses it had to bear to make fuel arrangements to compensate for the shortfall arising from the coal block de-allocation.
The Lohara block was allocated to the company by the Union coal ministry in 2007, and subsequently it was cancelled in 2009.
The company had signed four power purchase agreements (PPAs) with Maharashtra between 2008 and 2013, for 3,085 MW capacity, to supply electricity from the Tiroda plant.
The company’s shares closed at Rs 63.65 at the BSE on Wednesday, recording 5.91% rise from a day ago.
The Supreme Court in July had also allowed similar compensatory tariff from Gujarat discom to the company from for additional costs incurred in supplying power from its imported coal-based Mundra plant, after the Gujarat Mineral Development Corporation reneged on its promise to supply local coal from Mogra-II coal block in Chhattisgarh.
Adani Power is also the first — till date, the only — company to benefit from the Supreme Court’s October 29, 2018, ruling that extended the lifeline to the three troubled imported-coal-based power plants in Gujarat (Tata Power’s Mundra unit and Essar’s Salaya plant are the other two) by allowing the Central Electricity Regulatory Commission to amend their power purchase agreements to facilitate pass-through of future fuel price escalation, subject to a ceiling.
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