Mumbai-based Tata Power is likely to stop supplying electricity to five states starting March over their refusal to comply with increased tariffs. In the past few weeks, Tata Power has issued notices to discoms owned by Gujarat, Haryana, Rajasthan, Punjab, and Maharashtra governments so far.
Tatas run one of India’s largest power plants, which is located in Gujarat. It has incurred a loss of Rs 1,000 crore in the current fiscal from this unit alone. According to an Economic Times report, Tata Power has declared that it won’t be able to supply power to these plants unless the state governments allow the transfer of additional fuel costs to consumers.
A spokesperson of the firm said: “We have written to the distribution companies that we may have to consider shutting down if there is no positive response, we have not said we will shut down. Our attempt has been to arrive at a mutually acceptable arrangement. We have waited long for a resolution and losses are mounting. We do hope that states will take steps to finalise this quickly.”
Notably, this development comes more than a year after the Supreme Court had directed the Central Electricity Regulatory Commission (CERC) to raise tariffs to compensate for fuel cost increase with regard to three power firms. The regulatory body had given a nod for this in April 2019 itself, but these five states have been reluctant to comply.
On the flip side, if Tata Power actually stops supplying electricity to these states from their Mundra plant in Gujarat, the western Indian state would have to source power at much higher rates.