Central Electricity Regulatory Commission today asked Coastal Gujarat Power and buyers of electricity from the 4,000 MW Mundra project to submit their response in a week's time on the tariff hike issue.
Coastal Gujarat Power Ltd, a subsidiary of Tata Power, which is executing the 4,000 MW Mundra Ultra Mega Power Project in Gujarat, presented its case to CERC.
Tata Power had approached CERC seeking higher tariff for power generated from the Mundra plant due to expensive imported coal
The company won the Mundra UMPP through competitive bidding by quoting a price of Rs 2.26 per unit in 2007. Now, it has sought higher tariff of about Rs3 per unit.
"The (CERC) Bench has heard all the arguments and has asked for the response from the procurers in a week's time, after which the date for the next hearing would be fixed," a source said.
He said stakeholders including CGPL, state distribution companies from Gujarat and Punjab have argued their case before the Bench.
One of the procurer states has said: "We would suggest that whatever arguments they (CGPL) have given, they should give in the agenda form for the next hearing. First, discuss it with procurers and if there is a deadlock then come to the Commission."The procurers said that the Power Purchase Agreement (PPA) between the company and the procurers is an exclusive document. So any change to be made should be done within the provisions of the PPA.
One of the procurers also argued that the tender (for the Mundra UMPP) was by Tata Power company as a whole. He said that without the Mundra project, the company is earning 20-23 per cent equity on the projects and with the coming in of Mundra, the Return on Equity (ROE) will come down to 7-8 per cent but slowly rise again.
The project is fired by imported coal from Indonesia. Changes in Indonesian fuel pricing regulations have made the UMPP unviable at existing tariffs.
Electricity generated from Mundra UMPP is to be supplied to five states -- Gujarat (1,805 MW), Maharashtra (760 MW), Punjab (475 MW), Haryana (380 MW) and Rajasthan (380 MW).
The first 800 MW unit of the project became operational in March.