Gujarat-owned PSU Discom doesn’t need permission to pay compensatory tariff to Adani Power: Supreme Court

The Division Bench of the Apex Court comprising of Justices J. Chelameswar and Abhay Manohar Sapre while hearing a Civil Appeal preferred by M/s. Adani Power Ltd. held that Gujarat-owned Discom does not require its permission to pay “compensatory tariff” to Adani Power Ltd and such a decision would be subject to final verdict on the plea of the private power generating firm. Adani Power is a power generating firm and Discom is a company owned by the State of Gujarat carrying on business of purchasing power in bulk from power generating companies such as Adani Power and supplying to various distributing companies in the State of Gujarat. Adani Power and the Gujarat owned Discom entered into a Power Purchase Agreement (PPA). Under the said agreement, the Adani Power is obliged to sell 1000 megawatt of power from the their power project. For various reasons the Adani Group terminated the PPA since January 2010. After some correspondence, the Discom filed a petition before the Gujarat Electricity Regulatory Commission seeking adjudication of the dispute arising out of termination of the PPA. Aggrieved by the said order, the Adani Group carried the matter in appeal before the Appellate Tribunal for Electricity unsuccessfully. Adani Power Ltd has filed appeal in the apex court against the order of the Appellate Tribunal for Electricity which had upheld the view of subordinate panel, the Gujarat Electricity Regulatory Commission (GERC). The GERC, on August 31, 2010, had set aside the decision of Adani Power to terminate its PPA with Discom and had asked the private firm to keep supplying electricity as per the terms of PPA.

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