CERC order: Power tariffs in 5 states may go up

The CERC ruling came on a plea from Tata Power seeking relief for the project due to price rise in Indonesian coal

Consumers in five states, including Maharashtra, will have to foot higher electricity bills once the CERC order providing relief for Tata Power's Mundra project gets implemented.

In a much awaited ruling, Central Electricity Regulatory Commission (CERC) has allowed higher tariff as well as compensation of Rs 329.45 crore for Tata Power's 4,000-MW Mundra project in Gujarat.

The regulator has ruled for a compensatory tariff of Rs 0.524 per kWh for the project from the period beyond April 1, 2013, which has to be borne by the five states -- Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.

When asked about the CERC ruling, a Mahavitaran spokesperson said, "we are studying the order after which we will decide the future course of action".

Mahavitaran is Maharashtra's power distribution company (discom).

Sources at the discom said if the order is implemented, it would have to bear an additional burden of about 45 to 50 paise per unit of electricity.

Discoms in Gujarat, Rajasthan, Haryana and Punjab could not be immediately contacted.

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 Rs 2.26 per unit.

CGPL is a wholly-owned subsidiary of Tata Power.

The CERC ruling, made public on Saturday, came on a plea from Tata Power seeking relief for the project due to price rise in Indonesian coal that is used to fire the plant.

The Mundra project has been seeing significant losses on account of increased price of imported coal.

Describing the order as "balanced, Tata Power in a statement yesterday said it provides partial relief to Mundra UMPP.

The decision of CERC was awaited to make Mundra viable, which had got impacted due to no fault of the firm, but due to change of law at Indonesia as also other coal exporting countries and an unprecedented rise which could not have been perceived, it added.

In a separate order, CERC granted nearly Rs 830 crore compensation for Adani Power's 4,620 MW Mundra plant.

Gujarat has to pay Rs 420.24 crore while Haryana has to shell out Rs 409.51 crore as compensation from the commissioning date till March 31, 2013, the order said. A formula for compensatory tariff for period starting from April 1, 2013 has been decided by CERC.

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