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Delhi High Court postpones hearing on power plant cost capping case

The Delhi High Court on Tuesday postponed for a second time hearing on a petition challenging the government’s move to put a ceiling on the fixed costs that a power plant can factor into electricity tariffs.

The petition, filed by Mandakini Exploration and Mining Ltd, a joint venture of Jindal India Thermal Power and Monnet Power Company, was earlier listed for hearing on May 13.

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The company has argued 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”. It has said that the move will render its project “unviable” to service debt.

In April, the power ministry issued an order to amend guidelines for power procurement by states. According to the new guidelines, 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.

The high court has now listed the matter for July 30.


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