RPower seeks revision in tariff from Sasan; approaches CERC

Sasan project's first 660 MW unit is likely to be commissioned this month.

Last Updated: Jan 18, 2013, 18:04 PM IST

New Delhi: Reliance Power has petitioned power sector regulator CERC for permission to revise tariff of its 4,000 MW Sasan project in Madhya Pradesh due to rise in taxes and user charges.

Sasan Power Ltd, the special purpose vehicle of Reliance Power set up to build this 4,000 MW project, has filed a petition with CERC seeking tariff revision from Sasan plant on account of rise in user charges.

Reliance Power had in 2007 bagged the project in an international tender quoting the lowest levelised tariff of Rs 1.19 per unit for 25 years.

"Sasan Power has approached CERC seeking relief to recoup or adjust the project economics for certain changes since the award of the project such as increase in water charges, royalty rates, changes in tax rates etc," Reliance Power spokesperson said.

The spokesperson said, "The adjustments sought by the company are as per the provisions of the Power Purchase Agreement signed in 2007 by the company with the Procurers and in line with industry practice."

As per the Power Purchase Agreement (PPA) between the developer of the project and procurer of electricity, the company can approach CERC for any Change in Law.

The PPA states that as a result of change in law, the compensation for any increase or decrease in revenues or cost to the seller shall be determined and effective from such date, as decided by CERC whose decision shall be final and binding on both the parties.

Sasan project's first 660 MW unit is likely to be commissioned this month. The coal production from the three coal mines -- Moher, Moher Amlohri extension and Chhatrasal -- allotted to the project, has begun.

The access coal from Chhatrasal, after meeting the requirement of the Sasan project, would be utilised for company's another 4,000 MW capacity project at Chitrangi in Madhya Pradesh.

PFC is the nodal agency for the ultra mega power projects in the country. It has so far awarded four such projects of Reliance Power has bagged three -- Krishnapatnam (Andhra Pradesh) and Tilaiya (Jharkhand) apart from Sasan.

Tata Power is executing the fourth 4,000 MW Mundra UMPP in Gujarat.

Ultra Mega Power Project is a big-size power plant of at least 4,000 MW generation capacity.