CERC declares commissioning of RPower’s Sasan plant invalid

In a major setback to the Anil Ambani-led Reliance Power, the power regulator Central Electricity Regulatory Commission (CERC) has cancelled the commissioning date of the Sasan Power Ltd’s ultra mega power project (UMPP) on the ground of flouting of norms.
Sasan project was commissioned after independent engineers certified the commissioning date. It is the first coal-based UMPP in the country, with six units of 660 MW each.
The clauses in the PPA on Commercial Operation Declaration (COD) mandate that the unit should operate continuously for 72 consecutive hours at or above 95 per cent of its contracted capacity. However, the data available with Western Regional Load Despatch Centre (WRLDC) show that the 3,960 MW Sasan Power generated only 153 MW and hit a maximum of 165 MW on the date of commissioning i.e. March 30, 2013 against the required 660 MW or 95 per cent of that level.
“WRLDC is basically aggrieved by the certificate of the Independent Engineer dated 30.3.2013 that unit could not be tested for its full load capacity on account of the WRLDC instructions and grid conditions. WRLDC has further alleged intentional mis-declaration on the part of SPL,” the regulator observed in its order dated June 20.
This development is expected to impact revenue generation for Sasan Power’s promoters Reliance Power Ltd, as the first financial year of operation will now stand pushed back by a year, to 2013-14. According to the norms, the company’s first fiscal of operations is considered based on the date of commissioning. And from the third year, the power tariff will increase by 70 per cent.
“Since the tested capacity was only 101.38 MW as against the required tested capacity (95 per cent of the contracted capacity) of the unit, we direct SPL to carry out the fresh testing in accordance with the PPA to achieve the unit tested capacity of not less than 95 per cent of the contracted capacity as existing on the effective date,” said the Commission said.
It also adds, “Failure to achieve at least 95 per cent of the contracted capacity shall be considered as failure in the commissioning test and the seller is required to retake the required test with notice to the procures and the Independent Engineer.”

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