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The Indian Supreme Court on Monday ordered the Federal Regulatory Authority of Electricity to decide, within eight weeks, to approve revised tariffs applicable to three power producers. electricity in the state of Gujarat, in the west of the country, due to the increased cost of imported coal.
The Gujarat government has requested the intervention of the Supreme Court. implement the report of a state government group recommending the implementation of a cost-reflective tariff, reflecting any increase or decrease in input costs. The plea also includes a provision to extend the term of the contract for the plants operated by Tata Power Co., Adani Power Ltd. and Essar Power.
The two chambers judges at the Court, presided over by Rohinton F Nariman, stated that the rate decision should not be bound by a previous order of a single judge, which last year rejected the request of electricity producers demanding higher fees. Tata Power jumped up to 25%, the largest increase in intra-day trade for a decade, while Adani jumped up to 21%, its highest level since January.
ALSO READ: Energy badets under stress: Gujarat calls for concessions for Tata, Essar and Adani
Higher tariffs would allow these plants, with a combined capacity of nearly 10 gigawatts, to operate at full capacity capacity, having been underutilized since last year, the Supreme Court has denied an increase in tariffs. The reintegration of these plants into the network could improve the reliability of supply and prevent these projects from becoming non-productive badets.
The plants had a fixed price to win the projects, but these rates became unsustainable. since Indonesia changed its regulations on coal prices in 2010, linking fuel prices to an international standard.
The stimulus plan also stipulates that lenders cancel part of their loans and that project promoters absorb accumulated losses, according to people close to the project. . The court today asked the Central Electricity Regulatory Commission to hear all consumer groups about the proposals.
ALSO READ: Government Committee of Gujarat Could Contribute Rs 1.29 Billion to Tata, Adani and Essar
Tata Power operates a 4,000-megawatt power plant in the coastal town of Mundra in Gujarat, while Adani Power operates a 4,620-megawatt power plant at the same location. Both plants are coal-fired imported from Indonesia. Essar operates a 1,200-megawatt plant at Salaya in the same state
The plants failed to operate at full capacity after the court ruled last year that a change in foreign regulation could not cause a rise in electricity prices. 19659002] The Adani power plant operated at 44.3% capacity during the first half of the financial year beginning April 1, compared to 66% in the same period of the previous year, according to the Central Electricity Authority. Tata Power's Mundra generating station operated at 67.7% capacity, compared to 69.2% the previous year. Both companies have rights to extract coal in Indonesia, which allows them to protect themselves from rising coal prices. Essar, who does not look good, kept his factory shut for the time, according to the data.
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