Supreme Court has given its nod to examine billionaire Gautam Adani-led Adani Power’s appeal against the Punjab State Electricity Regulatory Commission’s (PSERC) decision on Monday. The SC bench headed by Justice PS Narasimha issued an order to the PSERC and Punjab State Power Corp (PSPCL) following Adani Power’s move to challenge a September 2024 order by the Appellate Tribunal for Electricity (Aptel).
Adani Power contested in the SC that the commission had failed to approve the PPA even after the parties had performed their respective obligations towards the execution of the contract.
Case’s Timeline
The company first moved to the Commission in 2018 to get its approval to implement the power purchase agreement (PPA) signed between Adani Power’s predecessor Udupi Power Corp and a Punjab government discom in 2006 under the Electricity Act, 2003. The “in principle” approval for the PPA was granted by the Central Electricity Regulatory Commission in 2005.
However, the commission rejected the grant permission. In its reasoning, the commission said that it is not economically feasible to buy electricity from Adani’s Udupi project at the price determined by the Central Commission, particularly when much cheaper options are available in the market.
The PPA was signed between Adani Power’s predecessor and PSPCL for purchase of 101.5 MW of power, which was around 10 per cent of the then proposed installed capacity of the 1,015 MW of Adani Power’s Udupi project located in Karnataka. The plant supplies power to discoms in Karnataka, Punjab and Gujarat.
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Following the Commission’s disapproval, the company moved to Aptel. PSPCL contended that it cannot go forward with the execution unless an approval is given by the Commission.
“PPA is a contingent contract and not enforceable until approved by the Commission is totally mis-placed and untenable,” Aptel stated in its order on September 25, 2024.
On the other side, Adani Power argued that it is the responsibility of PSPCL to obtain the Commission’s approval and not of the power-generating company under the PPA or the 2003 Electricity Act.
The Electricity Tribunal stated in its order that no error was made by the commission in refusing the grant permission to Adani Power.
“We do not find any error or infirmity in the impugned order of the Commission. The appeal is devoid of any merit,” said the Appellate Tribunal for Electricity.
