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CERC approves fuel cost pass through for Adani Power's Mundra plant

The CERC has allowed Adani Power's Gujarat plant to pass through imported coal cost to power consumers.

, ET Bureau|
Updated: Apr 12, 2019, 08.36 PM IST
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The Supreme Court had asked CERC to give its findings on compensation for high fuel cost to Tata Power, Adani Power and Essar Power.
The Central Electricity Regulatory Commission (CERC) has allowed Adani Power's Mundra power plant in Gujarat to pass through imported coal cost to power consumers.

CERC in its order issued on Friday said, "It has not been disputed by any stakeholder, including consumer groups, that even with full pass through of the fuel prices, these projects will continue to be competitive and cheaper than alternate sources, including any replacement capacity which in any case will take several years to come on stream, if at all.

"Further, these projects are efficient, on super critical technology and are base load plants and therefore, it makes economic sense to keep them operationalized. In sum, the Supplemental PPAs entered into by the Petitioner and Respondent No.1 in the light of the HPC recommendations and the Government of Gujarat GR dated 1.12.2018 are in the public interest designed to meet the long term energy requirement of the consumers of Gujarat at a competitive price," the order said.

Association of Power Producers director general Ashok Khurana said, "APP welcomes the move beacuse it is not
for anyone to run a project at losses. The order will save the project from being mothballed."

The high powered committee set up by Gujarat government last year recommended fuel cost pass through and an option to the companies to extend the power purchase contracts by 10 years. The Supreme Court had in October asked CERC to give its findings on compensation for high fuel cost to the three imported coal-based plants of Tata Power, Adani Power and Essar Power.
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