Loss of Power From Pri­vate Cos Won’t Hit Gu­jarat

Power util­ity head says no threat to fi­nan­cial po­si­tion

The Economic Times - - Economy: Macro, Micro & More - Sarita.Singh @times­group.com

New Delhi: Gu­jarat will be able to with­stand any loss of gen­er­a­tion from the three stressed elec­tric­ity plants of Tata Power, Adani Power and Es­sar Power that run on im­ported coal, the man­ag­ing di­rec­tor of the state's power util­ity said.

The state has a di­ver­si­fied gen­er­a­tion port­fo­lio with a bal­anced fuel mix, Pankaj Joshi of Gu­jarat Urja Vikas Nigam Ltd ( GUVNL) told ET in an in­ter­view. “Non- or less avail­abil­ity of gen­er­a­tion from a par­tic­u­lar fuel may have a mar­ginal im­pact. How­ever, there is no threat to the fi­nan­cial po­si­tion of dis­tri­bu­tion util­i­ties,” he said. GUVNL, the um­brella com­pany man­ag­ing elec­tric­ity sup­ply in Gu­jarat, is ex­plor­ing blend­ing of do­mes­ti­cally pro­duced coal with that im­ported from cheaper sources and in­creased pur­chase of the fuel from the spot mar­ket to in­su­late con­sumers from fluc­tu­a­tions in in­ter­na­tional coal prices, he said.

In June, Tata Power, Adani Power and Es­sar Power each of­fered a 51% stake in their Gu­jarat plants that use im­ported coal for .₹ 1. These plants are un­der fi­nan­cial stress as they are un­able to in­crease elec­tric­ity prices to off­set higher cost on im­ported coal.

The rea­son for the higher cost on the fuel is changes in laws in sup­plier coun­tries. The Supreme Court in April ruled that in­crease in coal prices due to such a rea­son can­not be cited for chang­ing the terms of power pur­chase agree­ments. While SBI is draw­ing up var­i­ous op­tions, GUVNL is in the process of com­plet­ing its due dili­gence.

“State has re­ceived the pro­posal from gen­er­a­tors of­fer­ing stakes. State has yet not done de­tailed tech­ni­cal, fi­nan­cial and le­gal due dili­gence. Fur­ther, other states are also in­volved in the mat­ter and their view also needs to be taken into con­sid­er­a­tion,” Joshi said. “Once it is done, it may en­able the state gov­ern­ment to take a suit­able view in the mat­ter.”

Tata Power op­er­ates the 4,000 mw Mun­dra ul­tra mega power pro­ject that has power sup­ply pacts with five states. Adani Power’s board has al­ready ap­proved hiv­ing off its 4,620 mw Mun­dra plant and is ex­plor­ing of­fer­ing a ma­jor­ity stake in the re­sul­tant sub­sidiary to GUVNL that buys 2,000 mw from the pro­ject. Es­sar Power of­fered its 1,320 mw Salaya plant to Gu­jarat af­ter the ad­verse rul­ing from the court.

Tata Power has said lenders to Mun­dra pro­ject have sug­gested sell­ing a stake to power pro­cur­ers from the plant. He said Gu­jarat has ad­e­quate power ca­pac­ity tie-ups on a long-term ba­sis. “It is mak­ing con­stant ef­forts to­wards cost op­ti­mi­sa­tion and may pur­sue pur­chase un­der long, medium and short term to op­ti­mise the cost,” Joshi said.

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