Reliance Power in spat with CERC over Sasan

Reliance Power and the Central Electricity Regulatory Commission (CERC) are at odds over the former's claim that the first unit of the 3960 MW Sasan ultra mega power project has been commissioned.

The central power sector regulator has ruled that the project has not commenced commercial operations since it did not meet the set testing parameters and that it has grave doubts over a routine announcement by Reliance Power that the plant has commenced commercial operations in March.

The 3,960 MW Sasan ultra mega power project, the world's largest integrated coal mine and power project, reported synchronisation of the first 660 MW unit on 9 March 2013.

Reliance Power claims that all six units of the project are well on track for completion ahead of schedule. Reliance Power has strongly contested the regulatory ruling, saying that the order is "violative of principles of natural justice and is not tenable in law."

"Sasan Power is approaching Appellate Tribunal to quash the untenable order of CERC."

"The first unit of 660 MW of 4,000 MW Sasan UMPP achieved commercial operations, as certified by the Independent Engineer (IE), appointed jointly by the procurers and Sasan Power, on 30.03.2013 which was duly accepted in writing by all the 14 procurers," the company said.

CERC has now ruled that the company start testing of the unit and apply afresh for approval of its commercial operations.

The regulator also ruled that the company did not act as per the provisions of the power purchase agreement.

"It is noticed that SPL instead of taking appropriate remedial measures under the PPA has vide its email dated 30.3.2013 to WRLDC (Western Region Load Despatch Centre) has intimated the commercial operation of the unit from 0:00 hrs of 31.3.2013 and sent the declared capacity of the Sasan UMPP for 31.3.2013 for 620.4 MW. In our view, SPL has not acted strictly as per the provisions of the PPA," the regulator said in its order.

WRLDC also had contested the company's claim in the CERC.

Refuting this Reliance Power said, "WRLDC has no locus standi to question COD (commercial operation declaration). WRLDC petition was listed before CERC on 23.05.2013 for hearing on maintainability only and the hearing was accordingly confined to maintainability. It is surprising that CERC vide order dated 20.06.2013 chose to deal with the merits of IE Certificate without even hearing Saasn Power or IE. The order effectively is an ex parte order."

Sasan Power has signed PPAs with 14 distribution companies for supply of power at 70 paise per unit for the first two years. The tariff will go up by over 70 per cent in the third year.

CERC fears that the company has not started power production so far and that the announcement of the start of commercial operations was only a ruse to start charging a higher tariff tariff from the third year.