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Business News/ Industry / Energy/  CERC ruling to cut losses; tariff still competitive:Tata Power
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CERC ruling to cut losses; tariff still competitive:Tata Power

Tata Power says hike in electricity tariff would be in the range of 45-47 paise per unit

CERC has allowed a compensatory tariff of Rs0.524 per kWh for the project from the period beyond 1 April 2013. Photo: Priyanka Parashar/MintPremium
CERC has allowed a compensatory tariff of Rs0.524 per kWh for the project from the period beyond 1 April 2013. Photo: Priyanka Parashar/Mint

New Delhi: Describing the Central Electricity Regulatory Commission (CERC) ruling on Mundra project as partial relief, Tata Power on Wednesday said tariff of electricity generated from the plant would go up to Rs2.90 per unit which still remains very competitive.

Tata Power managing director Anil Sardana told PTI that hike in electricity tariff would be in the range of 45-47 paise per unit. The final tariff would be around Rs2.90.

Even after the tariff hike, the cost of power sourced from Mundra plant would be “very very competitive" compared to electricity sourced by beneficiaries from other sources, Sardana said.

According to him, at present, the cost of electricity decided through competitive bidding in long-term power purchase agreements is above Rs4 per unit.

“It (CERC ruling) is actually a great win for customers...an asset has been salvaged," he added.

He also noted that losses incurred by the 4,000 MW Mundra plant would come down.

Electricity from Mundra project is supplied to Gujarat, Maharashtra, Rajasthan, Haryana and Punjab. The power purchase agreement with distribution companies (discoms) from these states is for selling electricity at a price of Rs2.26 per unit. Taking into consideration the fluctuations in exchange rate, the tariff of electricity from the plant is now around Rs2.45 per unit.

CERC has allowed a compensatory tariff of Rs0.524 per kWh for the project from the period beyond 1 April 2013.

The estimate of “45-47" paise hike in tariff is after taking into account various other factors including those related to Return on Equity (RoE), according to the company.

It has directed the states that procure electricity from the Mundra plant to pay a compensation of Rs329.45 crore for the period from 1 April 2012 to 31 March 2013.

The regulator’s move is aimed at compensating the losses suffered by the Mundra plant, located in Gujarat, due to rise in the price of Indonesian coal that is used to fire it.

CERC order, released last Saturday, came on Tata Power plea seeking relief due to rise in price of Indonesian coal, which is used to fire the plant.

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Published: 26 Feb 2014, 05:41 PM IST
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