GUJ CANCELS ORDER ON HIGH POWER TARIFFS

MUMBAI: The Gujarat government has decided to reverse its 2018 decision to amend the power purchase agreements (PPAs) it signed with Tata Power, Adani Power and Essar Power that allowed the three producers to raise electricity tariffs to offset the rising cost of imported coal.

The state’s energy and petrochemicals department said in a press release on Thursday that “the market trend of Indonesian coal prices (has) changed the scenario and to safeguard the interest of consumers, the government of Gujarat has revoked the regulation dated December 1, 2018 as the same was not fulfilling its objective and purpose”.

This followed the state cabinet approving a June 12 decision by the Gujarat Urja Vikas Nigam Ltd (GUVNL), the state’s electricity services department, to revoke the 2018 tariff hike in view of falling coal prices. Instead, the new order said that “matter of signing supplemental PPAs with EPGL (Essar Power Gujarat Ltd) and CGPL (Coastal Gujarat Power Ltd, a Tata Power arm) will be decided on a case to case basis”.

Mint has reviewed a copy of the June order. Tata Power could not be reached for comment till press time. Both Adani Power and Essar Power declined to comment on the development.

GUVNL said the “supply of power to Gujarat...shall not be at a higher tariff than the tariff charged to other procurer states”. Thursday’s press release by the state said “a suitable decision in the matter of tariff for imported coal-based projects will be taken by the government of Gujarat, considering the consumers’ interests.” At the heart of the dispute is the procurement cost of power generated by the three power plants built to generate power with coal imported from Indonesia.