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Informist, Monday, Jan. 6, 2025

 

NEW DELHI - The Supreme Court on Monday issued a notice to the Punjab State Electricity Regulatory Commission and Punjab State Power Corp. Ltd on Adani Power Ltd.'s plea against the state regulatory body's refusal to approve a power purchase agreement of 2006. The apex court will likely hear the case next on Feb. 25.

 

The agreement was signed between Udupi Power Corp. Ltd and Punjab State Power Corp. for the supply of 101.5 MW, which was 10% of the then proposed installed capacity of the 1,015 MW project located in Udupi, Karnataka. Adani Power was the successor in interest of Udupi Power.

 

Adani Power said the Punjab regulatory body erred by way of regulatory oversight by refusing to approve the agreement after 14 years of its signing and having been acted upon by parties. The regulatory body had earlier regulated power purchase and approved power procurement by Punjab State Power Corp. from Udupi Power project, Adani Power said. Once the power procurement "through agreements for purchase of power" was approved by the regulatory body, the agreement was deemed to be approved, the company said.

 

Both Punjab State Power Corp. and the state regulatory body have a role and obligation to ensure that the power purchase agreement gets approved, said Adani Power. After over 12 years of signing the power purchase agreement, Punjab State Power Corp. sought to cover up for its failures by filing a petition before the regulatory body, seeking rejection of the power purchase agreement.

 

Punjab State Power Corp. had all along been scheduling power from different entities prior to the power purchase being approved, Adani Power said. In over 146 power purchase agreements subsequently signed by Punjab State Power Corp., electricity was still being procured without any specific prior approval of such agreements, Adani Power said. 

 

The petitioner said that it had a "legitimate expectation" that Punjab State Power Corp. would duly schedule its contracted power of 101.5 MW under the agreement. However, Punjab State Power Corp. singled out Adani Power to not schedule power and pay for deemed generation, said the petitioner. 

 

Further, Adani Power said investments were made by Adani's generating companies on the strength of power purchase agreements. Here, the investment by Adani with respect to its 1,200 MW Udupi project was around INR 61.72 billion. The approach of the state regulatory body and the appellate tribunal for electricity was destructive over the principle of sanctity of statutory contracts, Adani Power said.

 

In September, the appellate tribunal for electricity upheld the state regulatory body's order. Challenging this, Adani Power moved the top court. 

 

On Monday, the shares of Adani Power Ltd. ended 4.3% lower at INR 498.30 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Vandana Hingorani

 

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