Coal news and updates

Tata Power Company Ltd has said it will work towards procuring competitive and alternative coals after the Supreme Court today passed an order disallowing the compensatory tariff earlier approved by power sector regulator Central Electricity Regulatory Authority. 

 

The company, however, did not divulge any further details on sourcing of the coal.

 

“The final order got uploaded in the evening and the company is studying the same. However, CGPL would continue to work towards alternatives, including sourcing of competitive and alternative coals to best contain the onslaught of under recovery," Tata Power said in a statement.

 

As per reports, while the apex court set aside the clause of compensatory tariff for Tata Power and Adani Power, the companies will be given a benefit only if the force majeure event is related to Indian laws.

 

“CGPL (Coastal Gujarat Power Ltd) / Tata Power considers it very unfortunate that neither Regulatory Powers of CERC nor Forced Majeure as adjudicated by Aptel, have been accepted by Hon'ble Supreme Court,” Tata Power said.

 

Earlier in December the power regulator had allowed the relief as compensation -- for higher cost of coal than envisaged due to change in Indonesian regulation in 2010 -- to the two firms in similar orders. But it had also clarified that its order would be subject to the outcome of a pending appeal in the Supreme Court.

 

CERC had estimated the tariff relief for Adani Power at Rs 0.29 per unit and Rs 0.26 per unit for the power purchase agreements with distribution utilities in Gujarat and Haryana respectively, based on the prices of coal and index exchange rate in March 2016. For Tata Power’s Coastal Gujarat Power, the regulator had estimated a tariff relief at Rs 0.05 per unit based on the prices of coal and exchange rate prevailing in August 2015.

 

The CERC’s order was subsequent to the order issued by APTEL on April 7, 2016, directing the CERC to assess the impact of change in regulations in Indonesia, on the projects of Adani Power and Coastal Gujarat Power and provide them such relief under the force majeure event, as may be available under the respective PPAs.

Source: Economic TImes