The Gujarat government last week passed an order to allow thermal power plants owned by Adani, Tata and Essar groups to pass on the higher cost of coal to discoms, which means that ultimately consumers will bear the brunt of higher power tariffs.

The decision was taken in accordance with the Supreme Court order and recommendation made by a high-powered panel. The apex court on October 29 gave go-ahead to discoms and stressed power companies to appeal for amendment in power purchasing agreement (PPA) of Mundra projects.

The three-member higher-power panel formed by the Gujarat government recommended passing the burden of high coal price to discoms along with extention of PPA and haircut to lenders.

“The company welcomes the resolution by the Government of Gujarat to accept the recommendations of the High Power Committee in giving some relief to Mundra Ultra Mega Power Project that meets nearly 15% of Gujarat’s requirement of power at a very reasonable cost,” Tata Power said in a statement on Monday.

“This relief will help Coastal Gujarat Power Ltd to continue its operations to meet its obligations to all the five beneficiary States,” it added.

The SC opened doors for negotiation after rejecting the request to raise power tariffs earlier. The apex court said that consumers, if unhappy with the hiked tariff, can challenge the decision as per the law.

According to news agency PTI, due to higher power tariff, electricity bill can shoot up in these five states. In Gujarat alone, the burden could be around Rs 9,000 crore, the news agency had reported earlier.

States where power tariff could surge:

  • Gujarat
  • Haryana
  • Maharashtra
  • Punjab
  • Rajasthan

The 4,000 MW Coastal Gujarat Power Limited of Tata Power, 4,620 MW at Mundra, Adani Power Mundra Limited and 1,200 MW Essar Power Gujarat Power Limited at Salaya were identified as stressed power projects as they reeled under costlier coal imported from Indonesia.


Source:- financialexpress