Delhi High Court to hear case against power plant cost capping on September 15

NEW DELHI: The Delhi High Court will on September 15 hear a petition against the government's move to cap the costs of power plants.

The hearing was scheduled to take place on Tuesday, a source said.

Mandakini Exploration & Mining, a joint venture of Jindal India Thermal Power and Monnet Power Company, had approached the court against the Centre’s move to put a ceiling to fixed costs of power plants that can be factored in electricity tariffs.

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

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