Maharashtra PPAs: two stressed power plants get partial relief

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Published: January 26, 2019 12:47:53 AM

However, in the process, Adani Power’s 3,300 MW Tiroda unit will now have to supply 343 MW to the state from the 440 MW it was providing till now.

However, in the process, Adani Power’s 3,300 MW Tiroda unit will now have to supply 343 MW to the state from the 440 MW it was providing till now.

In what might be seen as a breather to Rattan India Power’s 1,350 MW Nashik plant and KSK Group’s 540 MW unit in Wardha, the Maharashtra electricity regulatory commission (MERC) has ordered the state discom to revise the quantum of capacity alloted to power generators in 2012 against bids for 1,090 MW.

The order effectively allows the discoms to go ahead and sign long-term power purchase agreements (PPAs) with the two aforementioned power plants, both of which are currently under stress mainly due to lack of assured electricity buyers. However, in the process, Adani Power’s 3,300 MW Tiroda unit will now have to supply 343 MW to the state from the 440 MW it was providing till now.

Rattan India Nashik unit would be tied up with 507 MW while KSK’s Wardha would be supplying 240 MW. The former plant, for which the lead lender is PFC, has outstanding debts of around `7,364 crore. A consortium of lenders, led by IDBI, has a total exposure of `3,350 crore in the KSK Wardha power generating station.
The two stressed units will have to sell power to Maharashtra at `3.28/unit — the rate at which Adani’s plant has been supplying since 2013. The tariff is not only lesser than the state’s average rate of `3.63/unit, it also insulates Maharashtra from price hikes on the power exchanges (sometimes up to `18/unit for peak hours and `8.95/unit for round-the-clock power) where the largest power consuming state in the country has to rely on for sourcing electricity. The cost of electricity from NTPC’s recently commissioned Solapur unit from which Maharashtra buys power is also as high as `7.20/unit.

MERC’s order comes after the appellate tribunal for electricity and the Supreme Court accepted KSK’s argument that it was not given a fair chance to participate in the auctions for 1090 MW invited by Maharashtra in 2012. Adani Power had already signed a PPA with Maharashtra in 2013 but Rattan India, which was earlier awarded 650 MW, could not finalise its PPA due to the litigation raised.

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