Adani Power representatives meet Khattar over Haryana power pangs
About 1,050MW power generated from domestic coal can be supplied by APL at the agreed tariff of ₹2.94 per unit
Under fire for not being able to enforce Adani Power Ltd (APL) to supply 1,424MW of contracted power to Haryana, the state government is working out the details to come up with a workable solution to break the deadlock over the issue.
Haryana chief minister Manohar Lal Khattar on April 23 held a meeting with APL director Rajesh Adani and chief executive officer and managing director Anil Sardana to resolve the impasse.
The same day, Congress general secretary Randeep Surjewala had accused the BJP-led Haryana government of going soft on Adani Power.
The state is short of about 2,400MW power every day. This included 1,424MW of Adani Power, 380MW of Coastal Gujarat Power Ltd (CGPL) and 600MW of power from Rajiv Gandhi Thermal Power Plant in Hisar.
The Adani Power Ltd (APL), which has a contract with the Haryana government since 2008 for supplying 1,424MW electricity from its Mundra power project at a levelised tariff of ₹2.94 per unit for 25 years, has not been supplying any power to the state for the last six months, thus contributing to the ongoing power shortage.
The APL has taken a plea that the increase in the price of imported coal has made generation at the power purchase agreement (PPA) tariff uneconomical. The APL had sought signing of a supplementary PPA for supply of power generated from imported coal on a higher tariff as per the recommendation of a high-powered committee.
Three aspects deliberated upon to resolve the impasse
Top officials said three aspects were broadly deliberated during the chief minister’s April 23 meeting with the APL representatives to sort the matter.
First, it was discussed that since the energy charges as per the power purchase agreement (PPA) between Adani Power and Haryana was based on 70:30 ratio of contracted capacity based on domestic and imported coal respectively, Adani Power can supply about 1,050MW power generated from the domestic coal at the agreed tariff of ₹2.94 per unit.
Secondly, the profit on the remaining 30% of energy which will be sold by Adani Power in the open market should be shared with the Haryana government by APL.
Thirdly, if Haryana decides to buy the remaining 30% energy based on imported coal, an agreement should be executed for allowing pass through of costs.
However, this would mean buying power from Adani Power Ltd at a higher cost instead of ₹2.94 per unit, which is non-escalable as per the PPA. Agreeing to buy energy at a higher cost by acceding to the demand of APL would create a controversy for the state government.
A decision like this would be hard to defend for the state government, particularly in light of the Supreme Court ruling of April 11, 2017 which had disallowed the enactment of Indonesian regulation (which as per APL led to an increase in the imported coal price) as change in law or force majeure as per the power purchase agreement.
APL had contended before the central regulator that a change in law in Indonesia took place in 2010 and 2011, which aligned the export price of coal from Indonesia to international market prices instead of the price that was prevalent for the last 40 years.
“The proposed solution will be brainstormed to ensure that the interest of the state is fully protected,” said an official.