Fault lines in the ruling Democratic Front (DF) government over a private power project in Maharashtra’s Gondia district came to the fore on Wednesday.
Congress and Nationalist Congress Party (NCP) ministers crossed swords over a proposal for increase in power tariff for Tiroda-based Adani’s power plant in the Cabinet meeting. While Congress ministers opposed the hike, the NCP ministers supported it.
NCP’s Hasan Mushrif quelled the Congress-NCP divide over the issue alleging there was an attempt to show the NCP had some vested interests in the matter.
The tiff ended with Chief Minister Prithviraj Chavan announcing appointment of a six-member panel comprising government officials and private experts to decide on the tariff hike proposal.
On August 21, 2013, the Maharashtra Electricity Regulatory Commission (MERC) allowed 57 paise extra per unit for 800 MW power to be supplied from units 2 and 3 of the power plant, whose total generation capacity is 1,320 MW and the power purchase agreement (PPA) was entered into between MahaVitran and Adani in 2008 at Rs 2.64 per unit.
As per MERC orders, the first 520 MW is to be supplied at original rate. But an interim tariff — applicable for a year or till the panel fixes new compensatory tariff (CT) — of Rs 3.12 be allowed for the remaining 800 MW.
Adani Power first sought rate revision and demanded execution of a new PPA after the Union environment ministry rejected its proposed coal linkage in Wardha. It also appealed to the government to consider a revised fuel cost for generation and supply of power arguing that it would have to incur higher expenditure on coal imports. The state’s advocate general (AG), however, opined that procurement of coal under competitive bidding process was their sole responsibility and pleading non-availability was not a valid reason for invoking such a clause.
The AG had also opposed the rate revision.
Even as the final order is pending, the state administration brought the matter before the state Cabinet. Initiating discussion, Congress minister Patangrao Kadam cited AG’s opinion. “It is not right to allow hike in rates after entering into a PPA,” he said.