Ratnagiri Gas and Power Pvt. Ltd. (RGPPL) had been granted an execution order to recover approximately INR 7,114 crore from the Maharashtra State Electricity Distribution Company Ltd. (MSEDCL). The Supreme Court has now declined to intervene in this case.
RGPPL and MSEDCL had entered into a power purchase agreement on April 10, 2007. Under this agreement, MSEDCL had agreed to buy 95% of the energy produced from the Dabhol power plant. The agreement required MSEDCL to pay RGPPL both fixed and variable charges.
The dispute started in 2012 when RGPPL, the operator of the Dabhol power facility in Konkan, contacted the Central Electricity Regulatory Commission (CERC). The company sought to address issues arising from the lack of domestic gas availability and to instruct MSEDCL on the payment of fixed charges and other outstanding amounts.
On July 30, 2013, CERC ordered MSEDCL to pay the fixed charges to RGPPL. The Appellate Tribunal for Electricity (APTEL) upheld this order on April 22, 2015. Despite MSEDCL's appeal to the Supreme Court, the plea was dismissed on May 13, 2015.
Following this, RGPPL submitted an execution application to APTEL to recover INR 7,114 crore, including INR 5,287.76 crore in fixed costs. This led MSEDCL to petition the Supreme Court once again.
MSEDCL argued that it is not responsible for the additional amount demanded by RGPPL. According to MSEDCL, the Power Purchase Agreement required RGPPL to obtain MSEDCL's approval before purchasing alternative fuel.
The Supreme Court rejected MSEDCL's petition. The court ruled that the Power Purchase Agreement allowed for a shift from one fuel to another without MSEDCL's approval. The court further stated that due to the statewide shortage of petrol, a change was necessary to maintain availability.
The court's ruling implies that MSEDCL is liable for the additional costs incurred due to the fuel change. This decision is a significant development in the dispute between RGPPL and MSEDCL.
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