A critical reason behind the outages in several states is two leading power producers, Tata and Adani, shutting down their units at Mundra in Gujarat after the Supreme Court stopped the firms from charging higher tariff based on increased fuel prices.
According to Gujarat government sources, Adani has shut down production of almost 3,000 MW of power from its coal-fired plant while Tata has also frozen two units that generate 1,300 MW.
Tata’s Mundra project caters to Maharashtra, Gujarat, Rajasthan, Haryana and Punjab, while Adani Power provides electricity to Gujarat and Haryana.
On August 26, the Supreme Court had stayed the Appellate Tribunal for Electricity’s interim order allowing compensatory tariffs for the two ventures that have been impacted by change in Indonesian coal pricing policy.
“After the apex court order both companies shut down several units, reducing production from their respective plants, under the pretext of shortage of coal,” a senior government official added.
Tata and Adani had earlier approached Central Electricity Regulatory Commission seeking relief, which allowed them to charge higher rates from the state utilities as compensation for costlier fuel. The state utilities challenged this order before the Appellate Tribunal that directed them to pay compensatory tariff for March-May to the two power producers in six equal instalments. The utilities then approached the apex court against this interim order.