The country’s electricity regulator’s decision to compensate Tata Power for its higher costs has been challenged by Rajasthan and Punjab governments before the Appellate Tribunal for Electricity while Maharashtra and Haryana are also expected to file their petitions soon.
Gujarat that will procure the highest 1,900 mw of power from Tata Power’s 4,150 mw Mundra ultra-mega power project (UMPP) is yet to make up its mind. Another power producer Adani PowerBSE 1.02 % is also facing similar challenge from Haryana for its 1,242 mw agreement while Gujarat that will procure 1,000 mw has not taken call on this matter.
Adani has commissioned 4,620 mw of generation capacity at Mundra, near Tata Power’s UMPP to cater to various states. Delhi based NGO, Energy Watchdog, which estimated that higher costs will have an impact of Rs 75,000 crore on consumers in 25 years, has already appealed before the tribunal to seek stay against compensatory orders passed by Central Electricity Regulatory Commission (CERC).
“We would hope the process of law to validate & reinforce our view point on need for compensatory tariff,” according to Tata Power. Both Tata Power and Adani Power have been maintaining that they will continue to remain some of the cheapest electricity generators even after CERC’s compensatory orders.
In February, the commission directed utilities of five states to pay Rs 329.45 to Tata Power and two states to pay Rs 829 crore to Adani Power for past losses due to change in coal price regime in Indonesia. It also set formulas to compensate them for their higher fuel costs in the future while allowed state utilities to claim share in private power producer’s profits from mining business and sale of surplus electricity.
These orders were supposed to benefit several other power project developers who claimed an increase in their generation costs due to unforeseen reasons. Reliance PowerBSE 0.14 % has approached CERC to seek tariff revisions for its Sasan and Tilaiya UMPPs while Essar Power and Adani Power too have approached electricity regulators of Gujarat and Maharashtra to seek higher tariff for their respective power projects.
Read more…Source: ET