Ahmedabad: The Gujarat government has withdrawn a resolution that allowed private power companies to charge higher tariffs for their imported coal-based projects since the 2018 order was not fulfilling its objective.
The move has come as a blow to energy companies like Tata Power, Adani Power and Essar Power who have such coal-centric projects in Gujarat.
The government had issued this resolution in December 2018.
Keeping the consumer interest in mind, the Gujarat government said that a suitable decision on tariffs for imported coal-based projects would be taken in the future.
“In the view of the market trend of Indonesian coal price, changed scenario and to safeguard the interest of the consumers, the Government of Gujarat has revoked the Government Resolution (GR) dated December 1, 2018, as the same was not fulfilling its objective and purpose,” Additional Chief Secretary Sunayana Tomar mentioned in a statement on Thursday.
Tomar looks after the energy and petrochemical department of the state government.
Tata Power, Adani Power and Essar Power have power purchase agreements (PPAs) to supply 4,800 MW to state-run utility Gujarat Urja Vikas Nigam Ltd for 25 years.
The government had constituted a high-power committee chaired by Justice R.K. Agrawal, a retired Supreme Court judge, to make recommendations for addressing the issue of imported coal-based power projects in the state.
The committee was formed at the time when importing coal had become costly for power-producing companies and they were facing difficulties in continuing operations.
The Cabinet approved the recommendations and decisions of the committee.
“Thereafter, the state government issued policy directive vide GR dated 1.12. 2018 accepting the recommendations of the committee,” said the statement.
The GR allowed companies to raise tariffs after amending PPAs and informing the concerned authorities.
The government said that the main objective of the GR was to protect the interest of consumers while ensuring the supply of power from 4805 MW utility at reasonable rates.
However, the statement further said that the state government has withdrawn the order r in consumer interest and since the circumstances of coal-supply have changed.
The government said, “suitable decision in the matter of tariff for imported coal-based projects would be taken in the future”.
Adani Power has a 4,620 MW plant in Mundra, Tata Power has a 4,000 MW plant in Kutch district and Essar Power has a 1,320 MW plant at Salaya in Jamnagar district.