In an interesting development, both Haryana and Punjab have opposed the recommendations of the Deepak Parekh Committee proposing a compensatory tariff of around 60 paise per unit, over and above the tariff as per power purchase agreement (PPA) for the Tata Power-owned 4000 MW Mundra UMPP stating nothing beyond the PPA would be acceptable them.

In their affidavits filed with the Central Electricity Regulatory Commission (CERC), both the states have strongly opposed bid to hike power tariffs and impose burden on the consumers.

Tata Power filed a petition in CERC asking for adjustment in tariff to compensate for increased cost of imported coal from Indonesia. Following this, CERC agreed that suitable compensation is required to mitigate the impact of increased coal cost and in order to estimate the quantum of compensation, proposed on April 15 this year that an expert committee be constituted to look into the issue. Accordingly, an expert committee under chairmanship of Deepak Parekh was constituted.

The Parekh Committee submitted its report on August 13 to CERC proposing a compensatory tariff of around 60 paise per unit, over and above the tariff as per PPA. However, this has run into opposition from Punjab and Haryana.

The affidavit filed by Haryana has contended before CERC that in the event the cost of power from Tata’s project become prohibitive on account of increase in price of Indonesia coal or devaluation of rupee, there will be an unconditional option for Haryana utilities to decide on non-procurement and in such a case procurement of power from Tata’s project would not be binding on the Haryana Utilities. Further, it has stated it would pay additional tariff only from the date of CERC final order and not retrospectively.

On its part, Punjab has clearly stated that no extra burden is to be imposed on the consumers and no action be taken which will directly or indirectly, whether by the compensatory package proposed or by other means result in an additional burden to Punjab utility and hence the consumers. The tariff and other terms and conditions for supply of electricity by Tata Power to Punjab should be governed strictly by the PPA, the affidavit stated.