Cut tariff before buying stressed asset: UP energy regulator to Tata Power

Amid large scale stressed energy assets on block, the order can set pan India precedent

In a landmark decision, Uttar Pradesh energy regulator has directed a Tata Power entity to pare power tariffs by 0.14/unit before taking control of stressed thermal power plant in Prayagraj (Allahabad) operated by the Jaypee Group.

The judgement could set a precedent with a large number of stressed energy assets already on the blocks and pursued by other firms for takeovers. While the decision to direct bidding firms to undertake reduction of tariffs before being allowed to buy power assets could result in lower tariffs for the consumer, it could however blunt the sentiments of bidding companies.

Prayagraj Power Generation Company Limited