Smoke rises from a chimney as electricity pylons stand at a thermal power station in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Panel Explores Power Purchase Cost Options For Gujarat’s Three Stressed Plants

A three-member high powered committee set up by the Gujarat government held a meeting in Delhi yesterday to discuss options for its three stressed power projects struggling because higher cost of imported coal.

The panel, headed by former Supreme Court Justice RK Agrawal and comprising former RBI Deputy Governor SS Mundra and former Chairman of Central Electricity Regulatory Commission Pramod Deo, met stakeholders from procurer states, including Maharashtra, Punjab, Rajasthan and Haryana. It also met representatives of state distribution companies that signed power purchase pacts and the heads of energy departments of these states.

Since the Supreme Court has indicated that there is no provision of pass through in power purchase agreements, it is considered whether there should be a renegotiation of this issue and, if so, under what conditions, a senior state government official of Haryana told BloombergQuint requesting anonymity. He said states reiterated that they would like to continue procuring power at the same price which was decided when the pact was signed.

Also read: Gujarat’s Power Deficit Hits Seven-Year High This Summer

A definitive decision, however, has not been reached. Adani Power, Essar Power Gujarat Ltd. and Tata’s Coastal Gujarat Power Ltd. are facing viability issues after the Supreme Court barred them from passing higher costs of coal imported from Indonesia to consumers.

While all stakeholders’ views were taken into account, this is just the first of the series of meetings needed to find a solution, a committee member told BloombergQuint on condition of anonymity.

Haryana has resumed buying from Adani Power and Tata’s Coastal Gujarat Power, the official quoted earlier said. The state is procuring power at the same cost that was decided in the agreement.

Also read: Decline in Indian Power Plant Coal Imports Signals Distress