Reliance Power applies for hike in Sasan tariff on higher overheads

Claiming a hit of over Rs 350 crore on account of "change in law", Reliance Power Ltd has applied for a hike in tariff for its Sasan power project — the country's first Ultra Mega Power Project — even before the commencement of electricity generation from the proposed project. The reasons cited in the petition include a revision in water charges and hikes in excise duty and royalty on coal.

In the petition moved before the Central Electricity Regulatory Commission, tentatively slated to come up for hearing on January 30, Reliance Power arm Sasan Power Ltd has sought compensation citing that the "change in law" will be "impacting revenues and costs during the operating period." The petition, filed on January 16, 2013, comes just ahead of the scheduled COD for the first unit of January 31, 2013.

Under the original power purchase agreement (PPA) for the project signed by the developer, electricity was to be delivered by Sasan Power to a clutch of 14 distribution utilities at a levelised tariff of Rs 1.19616/kWh over the 25-year PPA tenure. The Rs 350 crore compensation amount sought by developer, which works out to a tariff hike of slightly over 13 paise per unit, could possibly delay the commissioning schedule of the project, a government official said.

Responding to a query, a Reliance Power spokesperson said the application before the CERC seeks compensation under the 'Change of Law' head as provided "under Article 13" of the PPA. On whether the first 660 MW unit of the project would be commissioned by the commercial operation date (COD) of January 31, he quoted a statement, attributed to J P Chalasani, CEO of Reliance Power, saying: "...pre-commissioning activities have started at our 3,960 MW Sasan project and the project is all set to be commissioned in this quarter, well ahead of the bid schedule".

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