Judgement of the Supreme Court of India regarding Adani Enterprises Consortium seeking a hike in power tariffs due to escalation in the price of coal, 11/04/2017
Judgement of the Supreme Court of India in the matter of Prayas (Energy Group) Vs Central Electricity Regulatory Commission & Others dated 11/04/2017 regarding Adani Enterprises Consortium seeking a hike in power tariffs due to “unprecedented and unforeseen” escalation in the price of coal imported from Indonesia.
CASE HISTORY & TIMELINE
An important part of the case is that a change in law in Indonesia took place in 2010 and 2011, which aligned the export price of coal from Indonesia to international market prices instead of the price that was prevalent for the last 40 years.
- In January 2007 Adani Enterprises Consortium was selected by Gujarat Urja Vikas Nigam Limited (GUVNL) as the successful bidder for supply of 1000 MW of power and in February 2007 a Power Purchase Agreement was entered into between GUVNL and Adani Power and this was for supply of power from a power project being set up at Korba in Chhattisgarh. This was changed to a Mundra Project in Gujarat.
- On 18th April, 2007, a supplementary PPA was signed to this effect. As far as Haryana is concerned, Adani Power submitted their bid for supply of 1425 MW of power to Haryana Utilities on 24th November, 2007. Two separate PPAs were executed by Adani Power with two Haryana entities for supply of 712 MW of power to each of them from the Mundra Power Project.
- An important part of the case on behalf of the respondents is that a change in law in Indonesia took place in 2010 and 2011, which aligned the export price of coal from Indonesia to international market prices instead of the price that was prevalent for the last 40 years.
- Adani Power filed a petition before the Central Electricity Regulatory Commission being Petition No.155 of 2012 on 5th July, 2012 under Section 79 of the Electricity Act seeking relief on the score of the impact of the Indonesian Regulation to either discharge them from the performance of the PPA on account of frustration, or to evolve a mechanism to restore the petitioners to the same economic condition prior to occurrence of the change in law.