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The Central Electricity Regulatory Commission (CERC) will shortly announce its judgement on a petition filed by Tata Power for re-looking at electricity rates applicable to its Ultra Mega Power Project (UMPP) in Mundra.
“They are also in line. Maybe in a day or two, the judgement would come,” CERC Chairperson Pramod Deo told Business Line .
The 4,000 MW UMPP run by Tata Power has been at a levelised tariff of Rs 2.26 a unit for 25 years. The power station sources coal from Indonesia. A change in regulation by the Indonesian Government has made coal exported from the country expensive. This, according to Tata Power, has made selling electricity at Rs 2.26 a unit economically unviable.
Deo did not interpret the judgement passed by CERC on Adani Power on Tuesday. He said the judgement is in the public domain.
IMPORTANT DECiSION FOR TATA POWER
Tata Power’s 4,000 MW UMPP in Mundra is the first such project to be commissioned fully. However, the project has ended up a white elephant for the company.
The private firm is awaiting resolution of the tariff issue, which will determine future investments by the company.
“It all depends on how Mundra shapes up. That would be a major consideration for Tata Power. For us to make sure that Mundra becomes viable and does not eat into our cash flows is a very important factor,” Anil Sardana, Managing Director, Tata Power, told Business Line .
In 2011-12, Tata Power reported a consolidated lower profit after tax at Rs 1,087.68 crore against Rs 2,059.60 crore in the previous year. This was primarily due to provision of Rs 1,800 crore for impairment for the Mundra project and Rs 659.44 crore for deferred stripping costs.
Sardana said the desire to fund capex would be based on from the existing assets doing well.
“You cannot run ahead without your current assets not performing. The assets, other than Mundra, are doing well. Operationally, Mundra is also doing well. The last month's plant load factors were around 90-94 per cent,” he said.
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