The Supreme Court has given a Rs 1,100-crore breather to L&T Power by upholding the company’s right to recover coal washing and transportation costs from the electricity distribution company of Punjab. Power producers welcomed the decision and said the financially ailing state power distribution companies have been resorting to excuses to delay payments to electricity generators.
The verdict comes months after the apex court denied compensatory tariff for high imported coal costs to Adani Power and Tata Power. The court had earlier also denied Reliance Power’s claims for higher power tariff from the Sasan ultra mega power project to compensate for steep depreciation of the rupee.
The Supreme Court has directed Punjab State Power Corp Ltd (PSPCL) to refund nearly Rs 1,100 crore within three months to Nabha Power Ltd, a unit of L&T Power Development, failing which it will have to refund the principal amount along with 12% simple interest, said Aniket Prasoon, partner, HSA Advocates that handled the matter in the court on behalf of Nabha Power.
“The long-term impact of this judgement will allow Nabha Power to have benefits over the balance term of around 22 years as the future deduction by PSPCL is going to stop on the basis of this judgement. The overall impact could have been Rs 7,000-8,000 crore over the entire term of the power purchase agreement,” he said.
An email to L&T Power remained unanswered till press time Sunday.
Association of Power Producers director general Ashok Khurana said it is a very positive judgement. Read more
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