Set-back to HP Govt : HC stays the amendment in hydro power policy

Set-back to HP Govt : HC stays the amendment in hydro power policy
Shimla, October 12

The Himachal Pradesh Government got a major set back today as Himachal Pradesh High Court stayed the decision of Congress government taken in the month of August this year to amend the hydropower policy imposing more royalty on commissioning of power project in the form of free power.
The division bench of Chief Justice MS Ramachandra Rao and justice Joytsna Rewal Dua passed order against the decision of Sukhvinder Singh Sukhu Government to amend the hydro power policy.
The counsel of JSW Energy and Senior advocate P Chitambram demanded that the action of state govenrment is breach of prepower purchase agreement should be quashed and court should issue status quo ante on the matter which was allowed by the high court on the very first hearing on this matter on Thursday.
The counsel of the state and Advocate General Anup Rattan opposed the petition and plead the court to not grant stay on the decision of state. He said that decision taken by the state is within its domain being the matter of policy. However court allowed the plea of the peititioners and fixed the next hearing on December 6 , 2023.
It is worthwhle to mention that on August 22, 2023 the council of minister under the chairmenship of Chief Minister Sukhvinder Singh Sukhu decided to amend the Swaran Jayanti Energy Policy, in which it was decided to amend the power policy and also go for new MoU to be signed with the developers.
Notably,  the Karcham Wangtoo plant located on the mighty Satluj river in Kinnuar district was commissioned on September 13, 2011 and Baspa on June 6, 2013, would  have to pay the increased 20 per cent free power royality for the next 18 yrs and and 30 pc free power royalty after 30 yrs till the plant br handed over to state after Sep 13, 2051 on June  6, 2053.
Recently, the COMs have amended the clause of royalty to be be charged 15 percent for the first 12 years,  20 pc for the next 18 years and 30 percent for the remaining 10 year period. After the 40 yrs project should be reverted back to the State Government free of cost and free from all encumbrances and liabilities. However, the royalty payable to the State for an extended period would not be less than 50 percent.
The COMs also withdrew the relaxation given for staggered free power royalty in favour of SJVNL and NHPC for 210 MW Luhri Stage-I, 66 MW Dhaulasidh, 382 MW Sunni Dam and 500 MW Dugar Hydro Electric Projects with immediate effect.  The Cabinet decided to rationalize the tariff of water cess to be charged from the Hydel Power Projects.
Aggrieved by the cabinet decison the JSW Energy operating 1300 mw Karchham Wangto power project on the Satluj River and 300 mw Baspa power project on the Baspa river tributories of the Satluj in Kinnuar district moved in the High court on October 6 challenging the amendment in the power policy.
Under ease of doing business, in 2018,  the Jai Ram Thakur government amended the power policy by charging 12 per cent deliverable free power from the commissioned projects for the period and extending up to 12 years from the date of Scheduled Commercial Operation. The projects were allowed to provide 18 per cent free power to Himachal for the period of next 18 years and at the rate of 30 per cent of the deliverable energy for the balance agreement period beyond 30 years.
To attract new power developers and stop migration of power producers from the state, the BJP rule had also extended operation period from the scheduled 40 years to 45 yrs from the date of scheduled Commercial Operation.
The BJP government had also decided that Free Power Royalty for all the new hydro projects to be allotted in future under Private Sector shall be levied as per the provisions contained in the National Hydro Power Policy i.e. levy of royalty in the shape of Free Power would be at uniform rate of 12 per cent for the entire agreement period. Before the allotment of power project new power developers are liable to sign revised Pre Implementation Agreements, Implementation Agreements and Supplementary Implementation Agreements as the case may be.
The JSW and other public sector firms filed separate petitions before the HP high court seeking restoration of old power policy and have opposed levying of water cess on the generation of power terming it violation of Pre Implementation and power purchase agreements signed by the previous Government in the state.

Team Himachal Scape