NAGPUR: The designated consumer representative of Maharashtra Electricity Regulatory Commission (MERC), Ashok Pendse, has questioned the commission’s rationale of giving relief to Adani Power at the cost of MSEDCL consumers. 

Due to the order, MSEDCL will have to pay about Rs60 crore to Adani, which will be recovered from consumers by way of higher tariff.

While granting relief, the commission used a Supreme Court (SC) judgment with retrospective effect. Secondly, it has applied clauses of power purchase agreement(PPA) between Adani and MSEDCL to power that was not purchased under the agreement.

Adani Power had signed a power purchase agreement (PPA) with Maharashtra State Electricity Distribution Company Ltd (MSEDCL) to sell 1,200 MW from April 1, 2014. However, its two 660 MW units were commissioned in September 2013 and it offered to sell power to the discom from October 1, 2013. MSEDCL agreed to the proposal stating power will be purchased as per terms and conditions of the PPA.

Even though Adani had shown enthusiasm for selling power before the PPA came into effect, it did not have coal linkage from that date. As a result, it had to buy costlier coal from the market through e-auction and also through imports.

Same happened in case of the PPA for 1,350 MW. The units were commissioned 75 days before the commencement of PPA and power was sold to MSEDCL. Here too, costlier coal had to be purchased.

Adani then demanded that cost difference between e-auction coal and linkage coal be reimbursed to it. MSEDCL refused to comply and Adani approached the MERC. The commission in October 2017 rejected its petition.

Earlier this year, the Supreme Court ruled that with New Coal Distribution Policy (NCDP) kicking in, compensatory tariff could be provided to power generators. Adani filed a review petition on the basis of this judgment.

The bench of chairman Anand Kulkarni and members IM Bohari and Mukesh Khullar surprisingly accepted Adani’s plea applying the apex judgment with retrospective effect. It was another bench which had rejected the MERC’s plea.

Pendse has demanded that MSEDCL approach the Appellate Tribunal for Electricity (ATE) against this ruling and get relief for its consumers. MSEDCL chief spokesperson PS Patil could not be contacted despite repeated attempts.