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Home News Power Sector News CERC to hear Tata and Adani cases on compensatory rate today

CERC to hear Tata and Adani cases on compensatory rate today

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CERCThe Central Electricity Regulatory Commission (CERC) would today resume hearing on two petitions by Tata Power and Adani Power seeking compensatory rates for their imported coal-based projects at Mundra in Gujarat.

A final order on the cases, if passed on Friday, would set a benchmark for rate re-negotiation. The CERC had in April allowed the two higher rates to compensate for the losses from a change in an Indonesian regulation that made coal costlier.

A committee, headed by HDFC Bank Chairman Deepak Parekh was then formed to work out the quantum of compensation, on CERC's direction.

The committee had submitted its report last month, recommending the tariff for the Mundra Ultra Mega Power project of Tata Power to be hiked by 59 paise a unit in the current financial year ending March 2014, according to sources. A similar hike has been proposed for the Adani project too. The outcome of Friday's hearing would determine the viability of over Rs 40,000 crore of investment in the two projects.

The committee had suggested adjusting the compensation in line with global prices and the benefits earned from the overseas mines owned by companies. According to the committee's recommendation, the tariff for the projects is to be reviewed every quarter. The panel has also suggested imposing a ceiling on the compensatory tariff. It has also floated the idea of third-party sale of power beyond the normative availability.

Source- Business standard


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