Moneycontrol
Last Updated : Dec 03, 2018 10:43 AM IST | Source: Moneycontrol.com

Tata Power, Adani Power rally 4-7% as Gujarat decides to raise tariffs of coal-based power plants

Tata Power welcomed the resolution by the Government of Gujarat to accept the recommendations of the High Power Committee in giving some relief to Mundra Ultra Mega Power Project.

Moneycontrol News @moneycontrolcom
Representative image
Representative image
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Tata Power climbed 6.6 percent and Adani Power gained 3.7 percent in morning on Monday after a relief from Gujarat government that decided to increase tariffs of three coal-based power plants.

Adani Power was quoting at Rs 57.05, up 2.98 percent after hitting a 52-week high of Rs 57.45 while Tata Power Company was up 5.84 percent at Rs 80.70, at 10:28 hours IST.

The Gujarat government has directed its power distribution company to raise tariffs of the three imported coal-based power plants owned by Tata Power, Adani Power and Essar Power by amending their power purchase agreements (PPAs) and approaching the power regulators for approval, The Economic Times said.

This comes as a big relief for the three plants which together can generate about 10,000 mw but have been making heavy losses after an abrupt jump in the price of Indonesian coal and the refusal of various states to pay higher tariffs as they said the power producers were bound by the PPAs, the report added. "The matter has lingered for years as it was put up to various regulators, courts, committees, appellate authorities and governments."

Tata Power welcomed the resolution by the Government of Gujarat to accept the recommendations of the High Power Committee in giving some relief to Mundra Ultra Mega Power Project that meets nearly 23 percent of Gujarat's requirement of power at a very reasonable cost.

"This relief will help Coastal Gujarat Power Limited to continue its operations to meet its obligations to all the five beneficiary States," the company said.

It further said though the coal cost is now a pass through, it would continue to make losses due to rebate on financing cost and coal mines profit is being passed on to the beneficiary States.

Tata Power expects to get the consent of other four procurer States based on the to the recommendations of the High Power Committee's and thereafter amendment to the power purchase agreements (PPAs) so as to seek necessary approvals from CERC as per the directions of the Supreme Court.
First Published on Dec 3, 2018 10:43 am
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant