It has directed 5 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 today.
Electricity from Mundra Ultra Mega Power Project is supplied to Gujarat, Maharashtra, Rajasthan, Haryana and Punjab. It has been facing challenges following rise in the price of Indonesian coal, which is used to fire the plant.
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 a statement.
Following that, a panel headed by eminent banker Deepak Parekh had made recommendations on the issue of compensatory tariffs for the project.
Tata Power also said the order would help resolve a major impasse affecting imported coal based power projects in the country that got impacted due to uncontrollable extraneous factors.
"Mundra UMPP has been since inception delivering to the full potential of Mundra across the five beneficiary states albeit with tremendous fiscal pain and this challenge of keeping Mundra UMPP viable had continued far too long," the statement noted.