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Punjab State Power Corporation has petitioned APTEL challenging electricity regulator CERC's order granting compensatory tariff to 2 Mundra projects of TATA Power and Adani Power. Punjab in its petition, with the the Appellate Tribunal for Electricity, said that the Central Electricity Regulatory Commission 'erred' on various grounds while deciding on the compensatory tariff for the two power companies. Punjab State Power Corporation in its petition said that "CERC has failed to appreciate that the terms and conditions for supply of electricity in a competitive bidding process is only based on the bidding documents.”

The petition said that "There cannot be any determination of tariff or examination of the costs and expenses by CERC in a competitive bidding process and more particularly after the bidding process is over." Earlier this week, three Rajasthan power distribution utilities Ajmer Vidyut Vitaran Nigam, Jaipur Vidyut Vitaran Nigam and Jodhpur Vidyut Vitaran Nigam had also approached APTEL on the same matter.

The CERC allowed TATA Power and Adani Power higher tariff and total compensation amounting to more than INR 1,100 crore for their Mundra projects in Gujarat. Rajasthan discoms in their appeal said that "CERC can revise tariff only with reference to Force Majeure, Change in Law or matters relating to the application of escalation for escalable tariff."
 The petition said that "CERC erred in considering the reduced price considered by TATA Power during bid though there was no firmed up coal supply agreement for supply at the discounted price."

TATA Power runs a 4,000 MW ultra mega power project at Mundra, while Adani Power operates a 4,620 MW plant. TATA Power won the bid for the Mundra plant in 2007 by offering a levelised tariff of INR 2.26 per unit for 25 years.

The CERC said that the higher tariff would be imposed with retrospective effect from April 1st 2013, entitling TATA Power to recover INR 329.45 crore and Adani Power almost INR 830 crore from customers. Last year, CERC had agreed that tariffs should be increased for both companies and set up a panel to work out the compensatory tariffs to mitigate the impact of higher overseas coal prices. The panel, headed by eminent banker Mr Deepak Parekh, had submitted its recommendations to CERC last August.

Tata Power's Mundra plant sells power to customers in the states of Maharashtra, Haryana, Punjab, Gujarat and Rajasthan.

Source-On Request