Regulator directs MP to pay dues to Adani Green Energy

Levies fine on state agency for non-compliance of order

In a first, the Madhya Pradesh Electricity Regulatory Commission (MPERC) has imposed a fine on a state government entity, besides telling it to clear all dues to Adani Green Energy.

The company provides wind power in the state and the MP Power Management Company ( MPPMCL) has been delaying payment to it for close to a year. The regulator has asked the state agency to clear all dues in 45 days. The penalty is ~100,000, for non- compliance with an earlier order for payment.

The order is likely to pave the way for timely payment to renewable power producers. They are facing delays and pending dues, given the cash shortage at most power distribution companies in the country.

In MP, as many as 266 power purchase agreements (PPAs), signed by around 50 companies, were impacted by delay in payment. The cumulative capacity of wind power in the state is 2,400 megawatt. Adani Green Energy moved the MPERC, contesting the delay and the rebate asked for by the state, of 1 per cent on dues “to expedite the payment”. While several companies did agree to give a rebate, many others were awaiting a suitable decision in the Adani case.

In July 2017, the regulator had directed MPPMCL to pay the dues. It did not, arguing the agreement with Adani was for 25 years and it could pay later.

MPERC came down heavily on this. “The Commission’s order cannot be read as a direction for non-payment of bills till the life of the PPA, as being contended by the respondent.” It has also directed that such delays do not recur in future.

This is a second jolt to the state in the segment. Last month, the Supreme Court quashed the cancellation of a PPA with ReNew Power.