Supreme Court stops Tata and Adani Power from charging more for power in five states
The companies had wanted to increase tariffs after Indonesia, from where they source coal, changed its export laws in 2010.
The Supreme Court on Tuesday prohibited Tata Power and Adani Power from raising power tariffs in the five states they operate in – Maharashtra, Gujarat, Haryana, Punjab, and Rajasthan, NDTV reported. The companies had wanted to increase tariffs in these states after a change was made in Indonesia’s coal export laws in 2010. Both companies source coal from the Southeast Asian country.
The Central Electricity Regulatory Authority had allowed the companies to charge more from customers in the month of December. This had prompted state power boards to take the corporate bodies to the court.
On March 30, a bench comprising justices Pinaki Chandra Ghose and Rohinton F. Nariman had heard a batch of appeals filed against a 2016 ruling of the Appellate Tribunal for Electricity that said that an unforeseen increase in the cost of coal would be a “force majeure event” under the Power Purchase Agreements signed between power generating companies and distributors. The appellate had asked the Central Electricity Regulatory Commission to grant relief to Tata and Adani in accordance with the PPAs. The bench had reserved its judgement then.
On Tuesday, the Supreme Court in its ruling said, “The only benefit we are allowing is if the force majeure event is related to Indian laws.”
Shares of Tata Power reversed early gains to fall as much as 6.78% after the Supreme Court’s order, while Adani Power slumped up to 20% to its lowest since February 21, The Hindu reported.
Tata Power subsidiary Coastal Gujarat Power Limited and Adani Power’s Mundra project in Gujarat have Power Purchase Agreements with state discoms in Rajasthan, Gujarat, Haryana and Punjab.