India’s electricity appellate tribunal grants partial stay on CT award in Adani Power facility

Cash flows on CT account to begin.

India’s Appellate Tribunal of Electricity (APTEL), in an interim order, has partially stayed Central Electricity Regulatory Commission’s (CERC’s) order to pay “compensatory tariff” (CT) to Adani Power (APL).

According to a research note from Nomura, this is over and above the tariff discovered via competitive bidding with respect to electricity supply under two PPAs—1000MW with Gujarat Urja Vikas Nigam (GUVNL) and 1424MW with Haryana Discoms (UHBVNL and DHBVNL) from APL’s 4620MW Mundra facility.

A read-through of the interim order indicates that APTEL clearly believes that its final decision in this case (being examined in tandem with a CT award by CERC to Tata Power for its Mundra project) would have far reaching consequences.

The tribunal would essentially be assessing “if the CERC has got a jurisdiction or whether it was correct in allowing the CT exercising its regulatory power in the circumstances of the case” in considerable detail the main Appeal.

Here’s more from Nomura:

Directions as per the interim order—[1] Gujarat & Haryana Discoms to make current payments (i.e. from March 2014 onwards) as per CERC’s order, i.e., CT is to be paid out to APL

[2] Arrears for March-May 2014 to be paid in six equal installments from end-July 2014

[3] APL would keep an account of the CT received from the Discoms; same would be refundable along with interest in case APTEL’s final judgment upholds Discoms’ appeal against CERC’s CT order

[4] Recovery of CT arrears from 1 April, 2012 to 28 February, 2014 need not be complied with, pending the final disposal of the Discoms’ Appeal (i.e. it would be subject to APTEL’s final judgment on this case.

[5] Hearing on the case is scheduled for 19 August.

As the recovery of CT in respect of current payments has not been stayed, it is likely that Discoms will begin payment of CT (as per the formula given in CERC’s order) along with the payment of the monthly bills.

As APTEL simply states that APL would need to keep an account of the CT received (vs. to be kept in a separate account), prima facie, it seems utilization of this cash flow would not be restricted.