SC allows APRL to recover compensatory tariff for higher coal cost from R'than discoms

Adani Power on Tuesday said the Supreme Court has allowed its arm APRL to recover compensatory tariff from Rajasthan discoms for higher coal cost in its order issued on August 31.

Adani Power on Tuesday said the Supreme Court has allowed its arm APRL to recover compensatory tariff from Rajasthan discoms for higher coal cost in its order issued on August 31. In September last year, Appellate Tribunal for Electricity (APTEL) had allowed APRL to charge higher cost of coal regarding a 1,200-MW power supply agreement with distribution companies of Rajasthan.

The tribunal had allowed the compensation due to the shortage of domestic coal. "(The) Supreme Court, vide its judgment on 31st August 2020, partially upheld the appeal filed by Rajasthan DISCOMs ('DISCOMs'). The order allowed Adani Power Rajasthan Ltd (APRL), a wholly-owned subsidiary of the Company, to recover compensatory tariff from DISCOMs as per APTEL order of 14th September 2019," Adani Power said in a BSE filing.

However, the company said the Supreme Court order limits the interest rate applicable on delayed payments by discoms at SBI Prime Lending Rate, with a cap of 9 per cent per annum, to be compounded annually instead of monthly compounding. Last year in September, the APTEL had allowed compensation for domestic coal shortfall arising from the change in law pertaining to the New Coal Distribution Policy, 2007 (NCDP), and the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India policy of the government (SHAKTI Policy).