Gujarat govt cancels earlier resolution on power tariff for Tata, Adani, Essar

The Gujarat government has cancelled a resolution from 2018 that allowed Tata Power, Adani Power and Essar Power to increase tariffs after coal prices declined since then.

The three power generation companies operate projects that run on imported fuel and had sought the increase in tariffs to account for higher coal prices.

However, in an order in April related to Essar Power, the Gujarat Electricity Regulatory Commission (GERC) made some modifications as coal prices had softened, which the state government now wants to incorporate in power purchase agreements (PPAs).

“The government resolution from 2018 has been revoked as the coal market has changed. The Gujarat regulator has given directions that aim to allow prudent cost of coal as a pass-through so that if the private generators are facing any hardships, that is reduced but at the same time the customers’ interest is taken care of. The government would examine future PPAs on the back of these directions,” Shahmeena Husaid, managing director, Gujarat Urja Vikas Nigam, told ET.

Indonesia’s benchmark thermal coal reference price in June was set close at a four-year low of $52.98 a ton, which is 35% lower than in the previous year.

ET Energy World
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