Four states to approach tribunal over power regulator’s order

Maharashtra, Haryana, Punjab and Gujarat are likely to approach the electricity tribunal challenging an order by the regulator allowing utilities Tata Power and Adani Power to charge higher rates.

According to sources, the four states received approvals from their respective Cabinets to challenge the Central Electricity Regulatory Commission’s decision before the Appellate Tribunal for Electricity.

The CERC last month allowed Tata Power and Adani Power to charge higher tariff and recover arrears of over Rs 1,150 crore. The decision was aimed at mitigating losses due to an increase in the price of Indonesian coal used by the companies at their plants in Mundra, Gujarat.

Tata Power runs a 4,000 MW ultra mega power project at Mundra, while Adani Power operates a 4,620 MW plant. Tata Power won the bid for the Mundra plant in 2007 by offering a levelised tariff of Rs 2.26 per unit for 25 years.

The CERC said the higher tariff would be imposed with retrospective effect from April 1, 2013, entitling Tata Power to recover Rs 329.45 crore from customers and Adani Power almost Rs 830 crore.

Tata Power’s Mundra plant sells power to customers in the four states and Rajasthan, while Gujarat and Haryana also purchase electricity from Adani.

Last year, CERC had agreed that tariffs should be increased for both companies and set up a panel to work out the compensatory tariffs to mitigate the impact of higher overseas coal prices.

The panel, headed by eminent banker Deepak Parekh, had submitted its recommendations to CERC last August.

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