CERC looks into alleged billing issues of Tata Power's Mundra Plant

NEW DELHI: Power regulator Central Electricity Commission (CERC) is looking into Tata Power’s alleged irregularities in commissioning of four of five units of its Mundra ultra mega power project (UMPP) and had sought all the relevant information on the matter by Jan 15.

The regulator is acting on complaints received from a retired engineer of the Madhya Pradesh Electricity Board who has alleged non-compliance of provisions of power purchase agreement (PPA) by Mundra UMPP leading to excess billing of 5,000 cr by Tata Power. The company dismisses all the allegations as malicious and says that it appears to be an attempt to defame it. It also said that the commission has not initiated an investigation or a probe into the matter, but had called all stakeholders to understand their perspective.

CERC last Wednesday initiated suo-moto proceedings and directed issue of notices to Coastal Gujarat Power Ltd, Tata Power’s unit that operates Mundra UMPP, the distribution companies buying power from the project, the independent engineer Black and Veatch that certified the project and the Western Region Load Dispatch Centre “to explain the facts and circumstances leading to the declaration of commercial operation of Units 20 to 50 of the Mundra UMPP”.

M C Bansal had written to the corporate affairs ministry alleging willful mis-declaration by Tata Power that it has commissioned all five units of Mundra in the letter of offer dated March 19, 2014 for rights issue of Tata Power. Tata Power in its reply said that the load change happened on account of restrictions imposed by the electricity grid. “The complaint is not just malicious with wrongful motive but also complainant has no locus standi to make such allegations…. This just seems to be an attempt of competition to defame and discredit the achievements in commissioning all five units of Mundra UMPP in record time….,” the company had stated.

The company has also declared that the commissioning of each of the units was certified by Black Veatch Consulting, independent engineer appointed by Gujarat Urja Vikas Nigam, Maharasthra State Electricity Distribution Co, Ajmer Vidyut Vitran Nigam, Jaipur Vidyut Vitran Nigam, Jodhpur Vidyut Vitran Nigam, Punjab State Electricity Board, Haryana Power Generation CO, etc and CGPL pursuant to the provision of the PPA. “Accordingly we deny these allegations on the basis that they are absolutely baseless, devoid of merit and carry neither authentication nor any weight.” Tata Power says.

Bansal alleged that it is evident from performance test reports for 4,000-mw Mundra UMPP that four out of five units totaling 3200-mw did not comply with the PPA requirements and thus did not achieve commencement. The PPA required the UMPP to run at 95% load for 72 hours.

“All these four units have actually run at far lower capacity due to various reasons including grid restriction, unit’s technical failures, etc… Mundra started billing the distribution companies at PPA tariff making huge financial gains of 1.50 per unit totaling … excess billing of about 5000 crore upto July 2014,” he said.

The company says allegations were levelled against it in letters written to GUVNL and MSEDCL, after which B&V denied the allegations and clarified that “all five units of CGPL met the requirements of the PPA and all major equipment was observed to be operating as expected.”