The Central Electricity Regulatory Commission (CERC) on Friday approved higher tariff for Adani Power’s 2,000 megawatt (MW) capacities at its Mundra power plant. The power plant was facing hardships after compensatory tariff was disallowed by the apex court in April 2017. Adani Power has been seeking to pass through higher cost of imported coal to run this plant. The cost of fuel rose after Indonesia changed its regulations. The Mundra plant in Gujarat is an imported coal-based plant.
“The Commission in exercise its powers under Section 79 (1) (b) of the Act read with Article 18.1 of the PPAs (power purchase agreements) approves the Supplemental PPAs to Bid-01 PPA and Bid-02 PPA,” the CERC said in an order. Last year, power distribution firm Gujarat Urja Vikas Nigam Ltd (GUVNL) had sought the CERC approval to amend terms of the PPA for 2,000 MW capacities with Adani’s 4,620-MW Munda power plant.
In its plea to the CERC last year, GUVNL had proposed amendments to the two PPAs signed on February 6, 2007, and February 2, 2007, with Adani Power (Mundra) Ltd, for supply of contracted capacity of 1,000 MW each from units 1 to 4 and units 5 and 6 of Mundra power plant, respectively. Disposing of the petition, the power regulator said said these projects (Adani and Tata’s Mundra plants) are efficient, on super-critical technology and are base-load plants and therefore, it makes economic sense to keep them operationalised.
“In sum, the supplemental PPAs entered into by the Petitioner and Respondent No.1 (GUVNL) in the light of the HPC (high-powered committee) recommendations and the Government of Gujarat order are in public interest designed to meet the long-term energy requirement of the consumers of Gujarat at a competitive price,” it added. In a BSE filing on Friday, Adani Power said the amendments effected under the supplemental PPAs, among others, allow revision in the energy charges under the respective PPAs on account of changes in the imported price of fuel being used for supply of power.
“The amendments increase the power generation capacity tied up under the PPAs by approx. 200 MW for Bid-01 and 234 MW for Bid-02, resulting in revised capacities of 1,200 MW and 1,234 MW respectively,” it added. The company also said the amendments also allow for a discount of Rs 0.20 per unit in the fixed capacity charge under the respective PPAs, in the CERC order to provide relief to the end consumers.
“The revised energy charges under the amended PPAs will come into effect from October 15, 2018. These amendments will allow Adani Power (Mundra) Limited to address the under-recovery of fuel costs,” Adani Power said. The Gujarat government took a policy decision in December last year to give a package to rehabilitate the imported coal-based stressed power projects located in the state.
Based on decision, GUVNL and the generator had finalised the supplemental PPAs, which have been submitted for approval of the commission.