Power Grid Corp. of India Ltd’s investors shrugged off the adverse tariff ruling on the renewable energy transmission corridor resulting in a gain of 1.8% in the stock from 9 August when the order was issued by the Central Electricity Regulatory Commission. The order limits the liability of power distribution companies (discoms) to the extent of their usage of the green energy corridor, according to JM Financial Institutional Securities Ltd.
Theoretically, the latest order crimps Power Grid’s realizations as it will have to bear the complete project cost from the date of commissioning, irrespective of the utilization levels. The tariff order pertains to the 8,900 megawatts transmission system with an estimated cost of ₹7,041 crore. Of this, around ₹2,520 crore has been approved under the regulated tariff mechanism to Power Grid.
