The Central Electricity Regulatory Commission (CERC) has allowed Reliance Power Ltd to charge 7% higher tariff from Madhya Pradesh government for power sold from its Sasan Ultra Mega Power Project (UMPP).

The tariff hike of around 9 paise per unit will provide Reliance Power a compensation of around Rs 300 crore every per annum for the power purchase agreement period of 25 years.

The power sector regulator has also approved a one-time compensation of Rs 271 cr to Reliance Power till July 31, Reliance Power said in a regulatory filing.

The Anil Ambani-led company said CERC has approved a petition filed by Reliance Power in 2013 to hike tariff on account of changes in law after the project became operational.

"The order allows it to claim increase in electricity rate and energy development cess on sale of power to the state of Madhya Pradesh and on auxiliary power consumption," Reliance Power said.

It further said the CERC order established the principles in change in law in line with the terms of the power agreement between Sasan Power Ltd and procurers, which will also ease pass-through of future change in law impacts on Sasan UMPP.

The 3,960 MW Sasan UMPP has been set up at Singrauli in Madhya Pradesh and Reliance Power said the project currently has a plant load factor of 100%.