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BJP government spokesman Rushikesh Patel clarifies on allegations of Shaktisinh Gohil on energy charges

Spokesperson of Gujarat  Government Minister Rushikesh Patel clarified allegations made by Congress President Shaktisinh Gohil regarding “payment of crores of rupees as additional energy charges to Adani Power Mundra in the last 5 years without necessary documents”.

He termed these allegations as misleading. Rushikesh Patel gave a detailed clarification with the below mentioned points:

1. In 2006, National Tariff Policy was notified by Govt. of India according to which Distribution Companies were mandated to procure power from Private projects only through tariff based competitive bidding process.  

2. In order to meet the increasing power demand, in 2007, State tied up capacity with projects selected through tariff based competitive bidding which has been approved by State Electricity Regulatory Commission. State has signed 2 Power Purchase Agreement with Adani Power Mundra Ltd. PPA dated 06.02.2007 (Bid 1) and PPA dated 02.02.2007 (Bid 2). In addition, State has tied up long term Power Purchase Agreement with Tata Power (Mundra UMPP) and Essar Power Gujarat Ltd.  

3. All the above projects have been utilizing the imported coal for generation of power. In 2010, Govt. of Indonesia has promulgated regulations modifying the export prices of coal.  

4. In 2017, imported coal based power projects had discontinued supply of power under PPAs citing increase in imported coal price and seeking offset of increase in imported coal price towards Energy Charge under the PPA.  

5. In July-2018, vide GR, State Govt. constituted a High Power Committee under the chairmanship of Retired Supreme Court Justice Shri. R. K. Agrawal to receive recommendations for resolution of issues raised by imported coal based projects in the State regarding increase in imported coal price due to Indonesian Regulations.  

6. High Power Committee in its Report has recommended allowing fuel cost pass through to the projects through signing of Supplemental PPA with Projects.  

7. With an objective to ensure that uninterrupted power is made available to the consumers of the State, State Govt. accepted the recommendations of High Power Committee with certain modifications and in order to keep power purchase cost overall lower decided that Project Developer will have to share Rs. 0.20/unit reduction in Fixed Cost, Sharing in mining profit and extend the tenure of the PPA and directed for signing of Supplemental PPA.  

8. As per the above, Supplemental PPA dated 5.12.2018 has been signed with Adani Power Mundra Ltd. as per which Energy Charge payment is to be made at lower of actual rate at which coal is procured and HBA Index derived price (HBA Index is the Govt. of Indonesian index notifying coal price).  

9. In order to amicably resolve the pending issues related to Energy Charges, past period losses and taking into consideration the power requirement of the State, GUVNL and Adani Power entered into Settlement Deed dated 3.1.2022 and GUVNL filed a petition before Central Electricity Regulatory Commission with a request to determine and recommend the Base Rate as on 15.10.2018 after prudent check and taking into consideration the relevant market prices at that time.  

10. Central Electricity Regulatory Commission vide order dated 13.06.2022 had determined the Base Rate and the matter is presently under consideration at the State Govt. level and after the finalization and approval of the Base Rate by Govt. of Gujarat, the net energy payment from 15.10.2018 will be reconciled and accordingly adjusted.  

11. After September-2021, there has been an unprecedented increase in prices of imported coal in international market and the prices has reached upto USD 331/MT in the year 2022. All the imported coal generators had shut down their plants. At that time in order to avoid the energy crisis and circumvent load shedding in other States, even Ministry of Power, Govt. of India had issued Section 11 directive under Electricity Act 2003 to all imported coal based generators to generate and supply power.    

12. In the above circumstances, in view of increased power demand of the State including of agriculture sector and with a view to continue to receive 2434 MW capacity from Adani Mundra power plant, till the time State Govt. decides and approves the Base Rate, Gujarat Urja Vikas Nigam Ltd. on interim basis had considered the Energy Charge methodology as per SPPA dated 5.12.2018 for purpose of payment.  

13. For the purpose of interim payment, the rate of coal purchase as submitted by Adani Power and the rate worked out as per the HBA index derived price, whichever is lower, has been considered for the purpose of energy charge payment on interim basis and this payment would be subject to adjustment as per the computation pursuant to approval of Base Rate as on 15.10.2018 by Govt. of Gujarat.  

14. With an objective that quality and uninterrupted power supply is available to the consumers of the State, GUVNL has been procuring.

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