Adani Power Maha unit gets nod to charge more

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SummaryNot only has the Maharashtra Electricity Regulatory Commission (MERC) followed the lead of central electricity regulator CERC by setting up a panel to look into a tariff hike for Adani Power’s Tiroda plant, it has also provided major relief to the company.

Not only has the Maharashtra Electricity Regulatory Commission (MERC) followed the lead of central electricity regulator CERC by setting up a panel to look into a tariff hike for Adani Power’s Tiroda plant, it has also provided major relief to the company, by allowing it to charge an extra 57.4 paise per unit in the interim period for power generated from units 2 and 3, totalling 800 MW, of the plant in the state’s Gondia district.

MERC’s decision comes days after a panel headed by Deepak Parekh submitted its report to central electricity regulator on the quantum of tariff hike to be provided to Adani Power and Tata Power for their plants in Mundra, Gujarat. Reports say the panel has suggested a tariff hike of 45-55 paise per unit for Tata Power’s 4,000-MW plant and up to 60 paise per unit for Adani Power’s 4620 MW project.

The state regulator, however, rejected Adani Power’s plea for a force majeure, saying sourcing coal under the competitive bidding process was the sole responsibility of Adani Power. Non-availability of coal from the local Lohara coal blocks from where the company had originally planned to source fuel for the Tiroda plant had prompted Adani Power to apply for a force majeure to be declared by MERC.

“The sourcing of coal from Lohara extension coal blocks was an arrangement made by Adani Power Maharashtra Limited, without involvement of the procurer Maharashtra State Electricity Distribution Company (MSEDCL),” the order said.

A force majeure is declared when a natural and unavoidable occurrence interrupts the expected course of events, exempting the affected party from meeting contractual obligations.

In line with CERC’s Mundra orders, MERC has directed Adani Power and Maharashtra State Electricity Distribution Company to set up a committee within 10 days to look into the details of the case, evaluate the financial impact of non-availability of coal from Lohara coal blocks on units 2 and 3 of Tiroda and, accordingly, determine a compensatory charge to be provided to the company, if required, over and above the tariff agreed in the PPA. MERC took this step as it accepts that expensive coal had to be arranged to generate and supply power to consumers of Maharashtra, putting the company under financial strain.

The panel is expected to submit its final report outlining the precise mechanism for calculation of compensatory charge within three months. Once the committee, which will be formed

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