Tata's Mundra project tariff hike to be about 47 paise/unit

Tata Power's Mundra UMPP will get about 47 paise per unit more following electricity regulator CERC allowing hike in tariff to mitigate the company's higher cost of imported fuel.
Central Electricity Regulatory Commission has allowed higher tariff of 52 paise and a compensation of Rs 329.45 crore to the company, effective April 1, 2013.
However, as per the CERC ruling, Tata Power will have to forgo 1 per cent of its return on equity which amounts to Rs 50 crore per annum.
According to sources, the company will get 47 paise higher tariff for its 4,000 MW Mundra UMPP that currently stands at Rs 2.26 per unit. Industry experts said that 47 paise per unit hike is good news for company.

Tata Power said: "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."
Electricity from Mundra UMPP 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.

Tata Power will also share incremental profits from its coal mining operations with procurers to offset the impact of compensatory tariff in proportion to the coal offtake for generation of electricity.

CERC has also granted nearly Rs 830 crore compensation for Adani Power's 4,620 MW Mundra plant in Gujarat.
The amount is to make up for the losses incurred by the project due to higher cost of imported Indonesian coal.