Gujarat to seek SC stamp on rescue plan for power plants

Gujarat to seek SC stamp on rescue plan for power plants

The Gujarat government and its discom, Gujarat Urja Vikas Nigam, will on Friday seek the Supreme Court’s consent for implementing a plan allowing the Tata, Adani and Essar groups to pass on increased fuel costs of their imported coal-based power stations in the state that have been doddering under mounting losses as consumer states refused to pay higher tariffs.

The move follows the plan proposed last month by a panel under former SC judge, Justice R K Agrawal. The state government had set up the panel to suggest ways to pull the three power plants in question — with combined PPAs (power purchase agreements) for over 8,000 MW and outstanding debt in excess of Rs 22,000 crore — back from the financial brink.

The recommendation of the panel, with former RBI deputy governor S S Mundra and retired Central Electricity Regulatory Commission chairman Pramod Kumar Deo as members, has the potential to give consumers in Gujarat, Maharashtra, Rajasthan, Punjab and Haryana a tariff shock by putting an estimated combined burden of Rs 1.29 lakh crore over 30 years. Read More

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