Indian coal power plants should be compensated for 2022 forced generation - regulator

By Sarita Chaganti Singh

NEW DELHI (Reuters) -Indian power plants that rely on imported coal should be fully compensated when forced to supply electricity, the country's power regulator said on Tuesday, paving the way for companies to recover losses resulting from a government order last year.

In May, India invoked an emergency clause in the Electricity Act to direct plants using imported coal to resume generation to meet high demand. The power stations, with a combined capacity of about 17 gigawatts, had ceased operating due to high coal prices.

Power tariffs for plants using imported coal should cover their costs as well as a "reasonable profit margin," the Central Electricity Regulatory Commission (CERC) said in an order dated Jan. 3.

The order came after Tata Power Co Ltd appealed to the CERC against the tariff fixed by the power ministry after the directive last year forced them to keep operating to avert a power crisis in the country.

Other companies, including Adani Power and JSW Energy, would now be able to claim compensation for being compelled to supply electricity during that period, an industry official said.

Tata Power said the CERC order would benefit its power plant at Mundra in Gujarat, which burns imported coal. The plant would recover the full cost incurred for supplying power under the emergency direction last year, it said in a statement.

"We are thankful to the CERC for granting all prayers in our favour," the company said.

The CERC order also said that the tariff that the power ministry had allowed under the emergency provision had been interim and no longer applied.

(Reporting by Sarita Chaganti Singh in New Delhi and Nallur Sethuraman in Bengaluru; Editing by Savio D'Souza and Bradley Perrett)