SC dismisses Jindal Steel plea against Tribunal order

NEW DELHI: The Supreme Court has dismissed a petition by Jindal Steel and Power Ltd challenging the Appellate Tribunal for Electricity's order that asked the company to buy 5 per cent of power generated from renewable sources.

A bench headed by Justice H K Sema, while refusing to give relief, asked the company to file a review petition before the tribunal.

Jindal Steel, while seeking exemption from purchasing the power, stated that it had a surplus and such mandatory order should be imposed only on those licensees which were power deficient.

"It is totally unjust to direct the appellant to purchase even more power when it is already surplus in power," it said.

Senior counsel Nageshwar Rao, appearing for Jindal, contended that any increase in power procurement cost would affect the rate it has fixed for power supply to consumers, with whom the company had long-term fixed contracts.

"It is not in a position to pass on the increased cost of purchasing power from renewable sources to its consumers, there being long-term contracts with fixed rates," he added.

Jindal, which has an integrated steel plant in Raigarh, has entered into long-term agreements with certain industries for supply of around 290 MW power at fixed rates of Rs 2.50 per unit, which is much lower than the rates charged by the state electricity board for industrial consumers.

To promote generation of electricity from renewable sources, Chhattisgarh State Electricity Regulatory Commission (CSERC) in November 2005 had made it mandatory for all distribution licensees -- Jindal Power, Chhattisgarh State Electricity Boards and Bhilai Steel Plant -- to purchase 5 per cent of power generated from biomass-based plants.