Setting aside an order of the Appellate Tribunal for Electricity (APTEL), the Supreme Court has ruled that Sasan Power Ltd, a power generation unit wholly owned by Reliance Power Limited, was disallowed from recovering Rs.1050 crore from 15 power distribution companies.
A bench of Justice Rohinton Nariman and Justice Kurian Joseph set aside the order that was in favour of Sasan.
It is to be noted that the appeal was heard and decided within seven months, an unusually short time for electricity cases. The court had refused stay against the APTEL order in July after the appeal was filed in April.
The issue of contention was the Commercial Operation Date (COD) or the date on which commercial operations began in Sasan Ultra Mega Power Project in Singrauli district of Madhya Pradesh. It is a huge power plant and coal mining project, set up with an investment of Rs.27,000 crore.
According to Sasan, the COD is 31 March, 2016, and 16 power distribution companies must pay from that date, according to the power purchase agreement entered between Sasan Power and the procurers.
The 15 power distribution companies, meanwhile, claimed that the COD was in fact 16.08.2013, as Sasan only doled out electricity on agreed capacity from that day. Before that, it was merely injecting infirm power. Infirm power is electricity supplied to the grid before commissioning of a project.
The view of the discoms was supported by an independent engineer’s certificate which the Central Electricity Regulatory Commission (CERC) agreed with in Petition No. 85/MP/2013, in the matter of Western Regional Load Despatch Centre, Mumbai, vs. Sasan Power Limited, Mumbai and Others.
Aggrieved with the CERC verdict, Sasan moved APTEL and got the order reversed. See order here.
The 15 companies then moved the apex court, which reversed APTEL’s order, saving them over a thousand crores of rupees.
The 15 companies are: