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Electricity regulator CERC's move to allow compensatory tariff for two Mundra projects of Tata PowerBSE 1.27 % and Adani Power has been challenged before Appellate Tribunal for Electricity (APTEL) by an NGO, which alleges that the move would give "undue benefits" to the utilities. Energy Watchdog, a Delhi-based non-governmental group, has filed appeals with the APTEL challenging the CERC's orders issued last month.
In a major relief for Tata Power and Adani Power, the Central Electricity Regulatory Commission (CERC) had allowed them higher tariff and total compensation amounting to more than Rs 1,100 crore for their Mundra projects in Gujarat. The rulings would help the companies to mitigate losses suffered by the two Mundra projects, due to a rise in price of Indonesian coal that is used to fire these plants.
Tata Power, through its wholly-owned subsidiary Coastal Gujarat Power Ltd (CGPL), is operating the 4,000 MW Mundra plant while Adani Power is implementing the 4,620 MW Mundra project. According to the two appeals, the orders would result in "undue benefit" of about Rs 75,000 crore for the two power producers. In its appeal against CERC order allowing compensation for Tata Power's Mundra project, the grouping said that due to the decision, the "extra burden on the exchequers would be Rs 44,000 cr
The regulator had allowed higher tariff as well as compensation of Rs 329.45 crore for Tata Power's Mundra plant. It supplies power to the states of Gujarat, Maharashtra, Rajasthan, Haryana and Punjab. The appeal against order related to Adani Power's project has alleged that extra burden on the state exchequers to the tune of Rs 31,808 crore. Electricity generated from this plant is sold to the states of Gujarat and Haryana.
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