Delhi High Court to hear case against power plant cost capping on August 20

NEW DELHI: The Delhi High Court has postponed to August 20 the hearing in a case challenging the government's move to cap the fixed costs that a power plant can factor into electricity tariffs, according to a person aware of the matter. Hearing was earlier scheduled to take place on Thursday.

The case has been filed by Mandakini Exploration and Mining Ltd, a joint venture of Jindal India Thermal Power Ltd and Monnet Power Company Ltd, against the Centre’s move to put a ceiling on the fixed costs that power plants can factor into electricity tariffs.

Mandakini Exploration and Mining has alleged that capping fixed costs after the auction of coal blocks “amounts to ex-post facto change in bidding conditions of coal mines for power sector” and would render its project “unviable” to service debt.

In April, the power ministry had issued an order to amend guidelines for power procurement by states, as per which state power distribution companies in consultation with their regulatory commissions will determine an upper ceiling for fixed costs for every unit of power. The fixed cost will be indicated in advance to all bidders before the distribution companies invite bids for power supply.