We have cancelled the GR in the cabinet meeting. Since coal prices have plummeted, we moved a note in the cabinet to cancel the earlier order on public interest,” an official said.
The Gujarat Cabinet has reversed its November 2018 decision on compensatory tariff for Adani Power, Tata Power and Essar Power on grounds of public interest, The Hindu has reported quoting sources.
According to the report, the state government cancelled its Government Resolution (GR), issued in November 2018 that had allowed higher tariffs to the power companies.
According to the report, the three companies have Power Purchase Agreements (PPAs) for supply of 4600 MW power to the state utility for 25 years. The report states that the Adani Power has two PPAs for 1000 MW each, while Tata Power has 1800 MW and Essar has 800 MW.
Moneycontrol could not independently verify the report.
“We have cancelled the GR in the cabinet meeting. Since coal prices have plummeted, we moved a note in the cabinet to cancel the earlier order on public interest,” a top bureaucrat told the newspaper.
Reports back then had suggested that the move had come as a big relief for the three plants, which had been making heavy losses after an abrupt jump in the price of Indonesian coal and the refusal of various states to pay higher tariffs as they said the power producers were bound by the PPAs.
According to the Hindu’s report, the state energy department and the Gujarat Urja Vikas Nigam Limited (GUVNL) have also informed power regulators like the Gujarat Electricity Regulatory Commission (GERC) and the Central Electricity Regulatory Commission (CERC) regarding the move.