Ahmedabad/New Delhi: Adani Power Ltd and Tata Power Co. Ltd have approached the Central Electricity Regulatory Commission (CERC), India’s top power sector regulator, to consider an increase in power tariff.
“Adani Power and Tata Power have filed their petitions. The hearing is on 19 July,” said Pramod Deo, chairman, CERC. The Indian Express newspaper on Tuesday reported that Tata Power has sought regulatory intervention.
The petitions seeking an increase in tariff for imported coal-based power projects were filed after customers for the electricity generated from these two projects, both located in Mundra in Gujarat, declined to pay higher rates.
Adani Power has entered into two power purchase agreements of 1,000 megawatts (MW) each with the Gujarat government at Rs2.35 per unit and Rs2.89 per unit for its 4,620MW power plant in Mundra. It entered into a similar accord with the Haryana government for Rs2.94 per unit. The remaining power would be sold in the open market.
Adani Power is also fighting a case in the Supreme Court where it has challenged a Gujarat state electricity regulator’s decision that did not allow it to scrap the Rs2.35 per unit agreement with the Gujarat state utility. Adani had sent a notice to the utility seeking termination of the agreement as it could not secure fuel from a local source and had to import it.
Tata Power has been lobbying the power ministry for higher rates for the power generated from the country’s first ultra mega power project. The company acquired a 30% stake in two coal mining units and a trading company from Indonesia’s PT Bumi Resources Tbk for $1.1 billion in 2007 to source fuel for its Mundra plant. According to Indonesian rules, prices of coal produced in the country have been pegged to the prevailing international prices of the commodity.
“Both Adani and Tata Power wanted a price revision in the range of 70 paise to Rs1 per unit, which was not acceptable to us,” said a Gujarat government official dealing with the power sector, speaking on condition of anonymity.
Mint reported on 4 April that at a review meeting earlier this year on Coastal Gujarat Power Ltd, as Tata’s Mundra project is known, the company’s officials had said that they did not have any case against the Indonesian government. Tata Power had signed power purchase agreements to sell electricity generated from Mundra plant to Gujarat, Maharashtra, Haryana, Punjab and Rajasthan at Rs2.26 per unit. Overall cost of the Mundra project is estimated at about Rs17,000 crore, with 75% funding through debt.
With power firms consuming 78% of the total domestic production of coal, about 50 million tonnes of the commodity needs to be imported for electricity generation in India.
maulik.p@livemint.com
