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Tauron demands 1.3 billion zloty in damages over power unit it says is faulty

WARSAW (Reuters) -Polish power utility Tauron demanded 1.3 billion zloty ($299 million) in damages and penalty fees from a consortium of Rafako and Mostostal Warszawa that built a 910 megawatt (MW) power unit it deems faulty.

The coal-fired unit, built in 2020, has undergone several prolonged outages since commissioning. Last year, the state-controlled utility said it suffered a margin loss of 285 million zloty after a generator was halted for several weeks amid soaring power prices.

Tauron and the Rafako-led consortium have been arguing for months about the source of the problem.

The consortium blames the utility for supplying substandard quality coal for the unit, which may have damaged boiler, while Tauron claims the faults were owed to the contractors and design mistakes.

"Rafako has received a long list of faults that have not been eliminated to date," Tauron said in a statement, adding it would give the consortium 30 days for payment.

"Design faults are impacting the operation, efficiency and economics of the unit."

Rafako said Tauron's demands were groundless and unlawful.

"This action is solely an attempt to improve Tauron's financial standing at the expense of Rafako," the company said in a statement which highlighted substandard coal supplied by Tauron as the source of problems with the unit.

($1 = 4.3522 zlotys)

(Reporting by Marek Strzelecki and Anna Koper; editing by Jason Neely)