CERC allows Adani, Tata Power to hike power tariff

The Central Electricity Regulatory Commission (CERC) has granted higher tariffs to thermal power projects using imported coal and oil as feed stock in view of the higher cost of imported fuel, thereby raising the cost of electricity to at least five states, including Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

Apart from Adani, Tata Power, the tariff hike that will also help other major power producers like NTPC, NLC, LANCO, SJVN, among others.

In its recommendations on operational norms for thermal power stations for tariff period 2014-19, CERC asked Gujarat to pay Rs420.24 crore and Haryana to shell out Rs409.51 crore as compensation from the commissioning date till 31 March 2013 to Adani Power.

CERC also allowed higher tariff as well as compensation of Rs329.45 crore for Tata Power's 4,000-MW Mundra project in Gujarat.

The regulator has ruled for a compensatory tariff of Rs0.524 per kWh for the Tata project from the period beyond 1 April 2013, which has to be borne by the five states - Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

The new CERC order will push up the cost of electricity for consumers in the five states while providing relief for Tata Power and Adani power projects in Mundra.

In Maharashtra, state-run power distribution company Mahavitaran estimates the tariff hike to result in an additional burden of about 45 to 50 paise per unit of electricity.

Discoms in Gujarat, Rajasthan, Haryana and Punjab will also have to bear similar burden.

Coastal Gujarat Power Ltd (CGPL), which is implementing the Mundra Project, has agreements with the five states for selling power from the plant at a price of Rs2.26 per unit.

CGPL is a wholly-owned subsidiary of Tata Power.

The CERC ruling comes on a plea by Tata Power seeking relief for the project due to price rise in Indonesian coal that is used to fire the plant, asd a result of which its Mundra project has been seeing significant losses on account of increased price of imported coal.

In a statement Tata Power said the CERC order provided partial relief to Mundra UMPP.

In a separate order, CERC granted nearly Rs830 crore compensation for Adani Power's 4,620 MW Mundra plant.

The order pertains to Adani Power's PPA, signed on 2 February 2007, with Gujarat Urja Vikas Nigam Ltd for 1,000 MW and two PPAs with Haryana utilities - Uttar Haryana Bijli Vidyut Nigam Ltd and Dakshin Haryana Bijli Vidyut Nigam Ltd on 7 August 2008.