Last week, the Gujarat government passed an order to allow thermal power plants run by Adani, Tata and Essar groups to pass the burden of higher costs of coal to distribution companies (discoms). This would mean that the cost will be ultimately borne by the consumers.
The decision was taken in accordance with the Supreme Court order on 29 October that allowed discoms and stressed power companies to appeal for an amendment to the power purchasing agreement (PPA) of Mudra projects. The order allows the groups to pass their burdens to discoms with an extension of PPA and haircuts to its lenders.
Tata Power in a statement said, "The company welcomes 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 15% of Gujarat's requirement of power at a very reasonable cost."
The Supreme Court had earlier rejected the request to raise the power tariffs but later allowed negotiations. The apex court that the consumers can challenge the decision as per the law if they are unhappy with the hike.
The 5 states that will be affected by the new arrangement according to a PTI report are: