Indian power plants that rely on imported coal must be fully compensated when they are forced to supply electricity, the country’s energy regulator said on Tuesday, paving the way for companies to recoup losses from a government order last year.
In May, India invoked an emergency clause in the Electricity Act to force plants using imported coal to resume production to meet high demand. Power plants with a total capacity of about 17 gigawatts had shut down 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 a January 3 order.
The order came after Tata Power Co. Ltd. appealed to CERC the tariff set by the power ministry after the directive last year forced them to continue operating to prevent a power crisis in the country.
Other companies, including Adani Power and JSW Energy, will now be able to claim compensation for being forced to supply electricity during this period, an industry official said.
Tata Power said the CERC order would benefit its Mundra power plant in Gujarat, which burns imported coal. The plant will reimburse the full costs incurred for emergency power supply last year, it said in a statement.
“We are thankful to CERC for fulfilling all the prayers in our favor,” the company said.
The CERC order further said that the tariff allowed by the Power Department under the emergency provision is temporary and no longer applicable.