Electricity regulator CERC has granted nearly Rs 830 crore compensation for Adani Power's 4,620 MW Mundra plant in Gujarat. The amount is to make up for the losses incurred by the project due to higher cost of imported Indonesian coal.
In a 133-page order, the Central Electricity Regulatory Commission has said that Gujarat has to pay Rs 420.24 crore, while Haryana has to shell out Rs 409.51 crore as compensation from the commissioning date till March 31, 2013.
For the Mundra plant, Adani Power has inked two power purchase agreements (PPAs) with Gujarat - each for 1,000 MW - and PPAs with two Haryana utilities for total capacity of 1,424 MW. Rest of the electricity generated from the plant is sold on merchant basis.
"The petitioner shall be entitled for a provisional lump sum compensation in respect of Gujarat PPA for an amount of Rs 420.24 crore and in respect of Haryana PPA for an amount of Rs 409.51 crore for the period from SCOD (Scheduled Commercial Operation Date) till March 31, 2013," said the order dated February 21.
This order pertains to one PPA with Gujarat Urja Vikas Nigam Ltd for 1,000 MW and two PPAs with Haryana utilities - Uttar Haryana Bijli Vidyut Nigam Ltd and Dakshin Haryana Bijli Vidyut Nigam Ltd.
Besides, the regulator has allowed compensatory tariff for the period from April 1, 2013 on the basis of a formula.
"The arrears in this respect from April 1, 2013 till February 28, 2014, in accordance with this order, shall be recovered from the procurers in equal monthly instalments over a period of not less than 12 months from the date of this order," it noted.
According to CERC, the actual excess realisation towards third party sale of power above the target availability of 80 per cent (after adjusting energy charges including compensatory tariff and incentive) shall be shared in the ratio 60:40 between the procurers and the petitioner.
"The sale of power to third party shall only be with mutual consent," the order said.
The ruling came on petition filed by Adani Power seeking relief since the price of imported Indonesian coal, used to fire the plant, has increased.
Last April, CERC had allowed hike in tariffs for the project and also set up a panel to out the compensatory tariffs to mitigate the adverse impact of higher overseas coal prices.
The panel, headed by eminent banker Deepak Parekh, had submitted his recommendations to CERC last August.