CERC gifts Tata Power’s Mundra project higher tariff & Rs 329-cr relief
23 Feb 2014 10:29 PM GMT
Electricity regulator CERC has allowed higher tariff as well as compensation of Rs 329.45 crore for Tata Power’s 4,000 MW Mundra project ‘to compensate for increase in the price of imported coal’. It has directed five states that procure electricity from the Mundra plant to pay a compensation of Rs Rs 329.45 crore for the period from April 1, 2012 to March 31, 2013. Besides, a compensatory tariff of Rs 0.524 per kWh has been granted for the project from the period beyond April 1, 2013, the Central Electricity Regulatory Commission (CERC) said in an order released on Saturday. Electricity from the Mundra Ultra Mega Power Project (UMPP) is supplied to Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.
It has been facing challenges following a rise in the price of Indonesian coal, which is used to fire the plant. ‘...the past losses of Rs 329.45 crore shall be reimbursed by the procurers in proportion to their contracted capacity in 36 equal monthly instalments,’ said the 110-page order.
Describing the order as ‘balanced’, Tata Power said in a statement that it provides partial relief to Mundra UMPP. ‘The company finds the order balanced perhaps keeping in view the beneficiaries and consumer interests.’ ‘The decision of CERC was awaited to make Mundra viable, which had got impacted due to no fault of itself, but due to change of law at Indonesia as also other coal exporting countries and an unprecedented rise which could not have been perceived,’ the company said.
In April last year, CERC allowed Tata Power and Adani Power to raise electricity tariffs for these projects as part of compensating the fallout from rise in coal costs. Following that, a panel headed by eminent banker Deepak Parekh had made proposals on the issue of compensatory tariffs.
Tata Power said the order would help resolve a major impasse affecting imported coal-based power projects that got impacted due to uncontrollable extraneous factors. ‘The Mundra UMPP has been since inception delivering to the full potential of Mundra albeit with tremendous fiscal pain and this challenge of keeping Mundra UMPP viable had continued far too long,’ the statement noted.
It has been facing challenges following a rise in the price of Indonesian coal, which is used to fire the plant. ‘...the past losses of Rs 329.45 crore shall be reimbursed by the procurers in proportion to their contracted capacity in 36 equal monthly instalments,’ said the 110-page order.
Describing the order as ‘balanced’, Tata Power said in a statement that it provides partial relief to Mundra UMPP. ‘The company finds the order balanced perhaps keeping in view the beneficiaries and consumer interests.’ ‘The decision of CERC was awaited to make Mundra viable, which had got impacted due to no fault of itself, but due to change of law at Indonesia as also other coal exporting countries and an unprecedented rise which could not have been perceived,’ the company said.
In April last year, CERC allowed Tata Power and Adani Power to raise electricity tariffs for these projects as part of compensating the fallout from rise in coal costs. Following that, a panel headed by eminent banker Deepak Parekh had made proposals on the issue of compensatory tariffs.
Tata Power said the order would help resolve a major impasse affecting imported coal-based power projects that got impacted due to uncontrollable extraneous factors. ‘The Mundra UMPP has been since inception delivering to the full potential of Mundra albeit with tremendous fiscal pain and this challenge of keeping Mundra UMPP viable had continued far too long,’ the statement noted.
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