The All-India Power Engineers Federation (AIPEF) has moved the Appellate Tribunal for Electricity (Aptel) to review the Central Electricity Regulatory Commission’s (CERC) order which allowed tariff hike for Adani Power’s 2,000 MW power generation capacity that supplies power to the Gujarat discom (GUVNL). AIPEF, which is a group of engineers working in state-run power utilities, has claimed that the revision would lead to power prices rising by almost `2/unit, affecting power consumers in Gujarat. According to sources, Aptel would take up the case on August 1, and would send notices to Adani Power, CERC and GUVNL.
CERC, on Supreme Court’s direction, allowed Gujarat discom GUVNL to amend the relevant power purchase agreement (PPA) with the company. The power regulator’s April 12 order had said that the supplemental PPA will take effect retrospectively from October 15, 2018. Adani's imported coal-based Mundra plant has a total capacity of 4,620 MW.
Adani Mundra had signed two PPAs with GUVNL (1,000 MW each) in 2007 at `2.89/unit and `2.35/unit. Analysts had noted that the move could allow Adani Power to hike tariffs by `0.80/unit, about 30%, in the current coal environment. Edelweiss Securities had said that the tariff hike could boost Ebitda of the firm by about `1,600 crore (annually) at 70% PLF level.
Adani Power is the first to benefit from the Supreme Court's October 29, 2018 ruling that extended the lifeline to the three troubled imported-coal-based power plants in Gujarat (Tata Power's Mundra unit and Essar's Salaya plant are the other two) by allowing the CERC to amend their PPAs to facilitate pass-through of future fuel price escalation, subject to a ceiling. The apex court had clarified that its April 2017 order, denying compensatory tariffs to these plants, wouldn't come in the way of implementing the fuel cost pass-through and other measures recommended by a high-level committee to salvage the units. These units got into trouble due to unforeseen hike in Indonesian coal prices.
The Gujarat government had constituted the committee in July, 2018 to assess if the power plants could be revived through appropriate financial and contractual re-structuring. While the Adani plant has made seperate contractual arrangements with various discoms, the Tata Mundra PPAs were signed under the composite ultra mega power projects (UMPP), which warrants the consent of all beneficiaries to go ahead with tariff revision.