Tribunal upholds appeal of Reliance Power subsidiary

Mumbai, Nov 5 (IANS) The Appellate Tribunal for Electricity (APTEL) has upheld the principle of fuel cost pass-through in its judgment pronounced in an appeal filed by Vidarbha Industries Power Limited (VIPL), a subsidiary of Reliance Power Limited.

VIPL operates 600 MW thermal power plant at Butibori in Maharashtra.

VIPL had challenged order issued by Maharashtra Electricity Regulatory Commission (MERC) on June 20, 2016, which partially disallowed fuel costs for FY14-15 and FY15-16.

The said MERC order had pertained to truing up (correcting or putting something in the right position) for FY14-15, provisional truing up for FY15-16 and Multi-Year Tariff for FY16-17 to FY19-20.

MERC had earlier approved the Power Purchase Agreement for Butibori Project of VIPL under Section 62 of Electricity Act.

APTEL found merit in VIPL’s contentions against the disallowance of fuel costs in the said MERC order.

APTEL observed that once PPA is approved under Section 62 of Electricity Act, the basic principles of tariff determination as per Section 62 have to be followed, where the fuel cost is pass-through in tariff.

APTEL further observed in its judgment that actual fuel mix used must be allowed while undertaking the prudence check. APTEL has accordingly asked MERC to rework fuel cost pass-through based on the decisions in its judgment.

The APTEL judgment provides regulatory clarity and certainty for VIPL.