The Central Electricity Regulatory Commission (CERC) has asked Coastal Gujarat Power (CGPL), the Tata Power arm that runs the troubled 4,150-MW Mundra ultra mega power plant, to send its proposal for tariff revision to all the electricity distribution companies (discoms) that procure power from its imported coal-based generating station. The company, on May 17, had sent such a proposal to Punjab State Power Corporation (PSPCL), which is currently evaluating the proposal.
CGPL had earlier requested the electricity regulator to direct the discoms to adopt revised power purchase agreements (PPA) to facilitate pass-through of future fuel price escalation, which CERC had not agreed to. The Tata Power unit had then sought more time to get the discoms’ consent for tariff revision for its imported coal based unit. Till December 31, 2018, Tata Power had suffered financial losses to the tune of `9,821 crore from under-recoveries of fuel prices from this project.
The Mundra plant, where Tata Power has invested Rs 14,986 crore, has PPAs with Gujarat, Maharashtra, Haryana, Rajasthan and Punjab.
The development comes after CERC, on April 12, allowed tariff hike for Adani Power’s 2,000 MW capacity that supplies power to the Gujarat discom (GUVNL). Adani’s Mundra plant, which is also imported coal-based, has a total capacity of 4,620 MW. While the Adani plant has made separate contractual arrangements with various discoms, the Tata Mundra PPAs were signed under the composite ultra mega power projects (UMPP), which warrants the consent of all beneficiaries to go ahead with tariff revision. The Supreme Court has allowed the CERC to amend the PPAs of the imported-coal based power plants as per the recommendations of a high-power committee. (The Gujarat government had constituted the committee in July this year assess if the power plants could be revived through appropriate financial and contractual re-structuring.)
The high power committee had recommended reduction in fixed charge by Rs 0.20/unit, which would necessitate banks to reduce debts by Rs 4,240 crore for Tata, Rs 3,821 crore for Adani and Rs 2,324 crore for Essar Power.