SASAN POWER LIMITED Vs. M.P. POWER MANAGEMENT COMPANY LTD. AND ORS.
LAWS(ET)-2015-3-6
CENTRAL ELECTRICITY REGULATORY COMMISSION
Decided on March 30,2015

Sasan Power Limited Appellant
VERSUS
M.P. Power Management Company Ltd. And Ors. Respondents

JUDGEMENT

- (1.) THE petitioner, Sasan Power Limited is a special purpose vehicle which was incorporated by M/s. Power Finance Corporation Limited (PFC), the nodal agency of Government of India for implementation of its Ultra Mega Power Project initiative on 10.2.2006 for the development and implementation of a coal fired, ultra mega power project based on linked captive coal mine using super -critical technology with an installed capacity of 4000 MW (plus/minus 10%) and a contracted capacity of 3722.4 MW (hereinafter "Contracted Capacity") at Sasan, District Singrauli, Madhya Pradesh (hereinafter referred to as "Sasan UMPP"). The project was conceived by Government of India to be implemented by a developer to be selected through tariff based international competitive bidding process.
(2.) BASED on the competitive bidding carried out by Power Finance Corporation as the Bid Process Coordinator, Reliance Power Limited (hereinafter referred to as "R Power") having quoted the lowest bid was declared as successful bidder for execution of the project. Accordingly, Letter of Intent (LoI) was issued to R Power on 1.8.2007 which was accepted. Consequently, in terms of the provisions of the Request for Proposal (RFP), R Power acquired 100% shareholding of the SPV on 7.8.2007. A PPA dated 7.8.2007 was executed between the petitioner and 14 procurers who are the distribution companies in the State of Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab, Haryana, Uttarakhand and Delhi. On 15.10.2008 a Supplemental Power Purchase Agreement (SPPA) was entered into between the petitioner and the procurers primarily to pre -pone the scheduled date of commercial operation (CODs) of the various units of the Project. In the Joint Monitoring Committee meeting held on 17.9.2010, the date of commercial operation of the various units of the project was revised by mutual consent. The dates of commercial operation of various units of Sasan UMPP as per the PPA and the SPPA are as under: - According to the petitioner, the COD of the first unit at the time of filing of the petition was expected to be 31.3.2013 subject to the completion of procurer's condition subsequent and other procurers obligations set out in the PPA.
(3.) THE petitioner has filed the present petition under section 79(1)(b) and 79(1)(f) of the Electricity Act, 2003 (hereinafter "2003 Act"), Article 13 read with Article 17 of the PPA read with Paragraph 5.17 of the Competitive Bidding Guidelines and Regulations 82, 92 and 113 of the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999. The petitioner has submitted that the following Changes in Law have occurred during the operating period of the project which have caused the capital cost of the project to increase substantially: "(a) Increase in water charges pursuant to Notification No. -18 -1/91/Madhyam/31/436 dated 21.4.2010 issued by the Water Resources Department, Government of Madhya Pradesh. (b) Increase in the rate of royalty on coal pursuant to Notification No. , dated 10.05.2012 issued by the Ministry of Coal, Government of India. , (c) Levy of Clean Energy Cess by the Government of India in the Finance Act, 2010 with effect from 01.04.2010 in terms of Notification No. -Clean Energy Cess dated 22.06.2010 issued by the Ministry of Finance, Government of India. (d) Imposition of Excise Duty on Coal by the Government of India in the Finance Act, 2012 with effect from 01.04.2012. (e) Increased Expenditure on account of the Mine Closure Plan which had to be formulated pursuant to a Notification No. 55011 -01 -2009 -CPAM, dated 11.01.2012 issued by the Ministry of Coal, Government of India. (f) Change in Income Tax Rates introduced in the Finance Act, 2012 with effect from 01.04.2012. (g) Increase in Minimum Alternate Tax Rates introduced in the Finance Act, 2012 with effect from 01.04.2012. (h) Change in merit rate of excise duty pursuant to a Notification No. - Central Excise, dated 17.03.2012 issued by the Ministry of Finance, Government of India. (i) Change in rates of Central Sales Tax pursuant to a Notification No. [F -No. 28/11/2007 -ST], dated 30.05.2008 issued by the Ministry of Finance, Government of India. (j) Change in Value Added Tax Rates pursuant to a Notification No. FA , dated 01.08.2009 issued by the Commercial Taxes Department, Government of Madhya Pradesh and the MP VAT Amendment Act dated 01.04.2010." ;


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