On August 31, a Supreme Court Bench headed by Justice Arun Mishra approved the decision by electricity regulators to grant Adani Power “compensatory tariffs” amounting to Rs 8,000 crore for electricity generated at its power plant in Rajasthan. The verdict is the seventh judgment since 2019 in which benches headed by him have ruled in favour of Adani group companies.
In a judgement that is expected to be pronounced before September 2, the Supreme Court will decide on a seven-year-long dispute between Rajasthan’s electricity distribution companies and a power generation company in the Adani group. The Adani group company stands to gain over Rs 5,000 crore if the judgement goes in its favour.
It is claimed that a recent decision by the Gujarat government, to revoke a 2018 government resolution allowing increases in electricity tariffs by private power companies in the Adani, Tata and Essar groups, would “safeguard” consumer interests. On the contrary, the decision may benefit the private companies at the expense of electricity consumers.
Allowing 100% FDI in coal mining is raising apprehensions that foreign companies will now ‘plunder’ mineral resources for commercial purposes for sale in the open market.
Appeals before electricity regulatory authorities against a hike in tariffs by Adani Power’s plant in Mundra, Gujarat, that had been granted in December 2018, have reopened an issue that was presumed to have been settled by the Supreme Court.
Regulatory authorities have interpreted rules in ways that have resulted in mounting losses for public sector electricity distribution companies while users are paying higher tariffs. The Supreme Court granted Adani Power Rajasthan Limited rights to claim over ₹2,500 crore from three Rajasthan discoms by passing through tariff increases to electricity consumers, despite a 2017 judgment forbidding such compensation.
Draft report proposes that “the burden of hardships” be borne by all stakeholders – developers, lending banks, and consumers.
Two prominent infrastructure companies belonging to Adani Group and Tata Group had sought the assistance of electricity regulators to hike the rate at which they sold power to several state power utility and distribution companies. They claimed that compensatory tariffs to the tune of nearly ₹8,000 crore were due to them as they had to absorb an increase in the price of coal imported from Indonesia. But this was denied to them by the Supreme Court.
