Reliance Power Ltd has announced that it has taken its dispute with the 11 electricity distribution companies in four States that had entered into power purchase agreements with it, to the Indian Council of Arbitration.

The issue relates to the development of the Rs 17,500-crore, 4,000 MW Krishnapatnam Ultra Mega Power Project in Andhra Pradesh by Coastal Andhra Power Ltd, a wholly owned subsidiary of Reliance Power.

The stand-off revolves around Reliance Power wanting to renegotiate the PPAs because of the changes in mining regulations in Indonesia, from where it proposes to bring coal for the power plants. Reliance Power feels the change in laws to be beyond its control and, therefore, force majeure , or ‘act of God’.

(Indonesia decided last year to link export prices of coal against international prices and mandated mining companies to allocate 24.2 per cent of their annual production for domestic use. More recently, in March 2012, Indonesia has said that foreign mining companies should bring down their stake in the domestic SPVs to 49 per cent over a 10-year period.

The Indian government is seeking ‘special status’ for India through the India-Indonesia Joint Working Group on Coal.)

The discoms, led by the chief procurer -- Andhra Pradesh Central Power Distribution Company -- feel that Reliance Power is hiding behind Indonesia’s regulations and had really abandoned the project.

Reliance won the project in November 2007, quoting a uniform tariff of Rs 2.33 a unit for 25 years. The project would supply 1,600 MW of power to Andhra Pradesh, and 800 MW each to Tamil Nadu, Karnataka and Maharashtra. Seeing no progress, the AP power utility sent a notice to Reliance in April saying that it would invoke the bank guarantee, effectively making Reliance Power pay Rs 400 crore.

In March, Reliance Power approached the Delhi High Court and got an order which, according to Reliance, restrained the discoms from taking any “coercive steps”.

In its notification to the stock exchanges today, Reliance Power said that its subsidiary had sent a dispute resolution notice on March 13, 2012 for an amicable solution, but the power procurers did not respond to the notice.

“Today’s filing is in continuation of the same,” it said.

>mramesh@thehindu.co.in