102% rise in average cost of electricity purchased from Adani Power between 2021 & 2022: Gujarat govt

Between 2021 and 2022, the average cost of electricity bought from Adani Power went up 102 per cent from Rs 3.58 per unit to Rs 7.24 per unit in 2022, data tabled as a part of the reply reveal.

Despite the increase in cost of power purchased from Adani Power, the government bought 7.5 per cent more power from the company in 2022, compared to calendar year 2021. During the two-year period, the Gujarat government increased the quantum of power bought from the company to 6,007 million units in 2022, from 5,587 million units a year earlier.

Between 2021 and 2022, the government paid a total of Rs 8,160 crore to Adani Power which includes fixed charges and per unit cost of power.

The Gujarat government admitted that the bids placed by Adani Power in the year 2007 allowed the company to sell power for 25 years ranging between Rs 2.89 per unit to Rs 2.35 per unit.

The state government stated that the Adani Power project was dependent on imported coal from Indonesia and after 2011, the power producer was unable to generate power to full capacity due to unexpected increase in coal prices.

Taking this development into account, the state government formed a high-powered committee and on December 1, 2018, the state government issued a resolution partly modifying the recommendations of the committee and permitting an increase in the electricity rates. Accordingly, a supplementary agreement was signed with Adani Power on December 5, 2018. In addition to this, after the intervention of the Government of India, it was decided to purchase power at fixed energy charges of Rs 4.5 per unit and capacity charges as per the agreement with the company, the reply added.

When asked as to how the Gujarat government will recover the rising cost of electricity purchased from private producers like Adani Power, KK Bajaj, an expert said, “The Government will simply hike the Fuel and Power Purchase Price Adjustment (FPPPA) charges. Though Gujarat government claims that it has not raised electricity tariff for the past several years, the authorities have been silently hiking the FPPPA charge, which is part of the residential consumer’s bi-monthly electricity bill.”

Between 2021 and 2022, the state government have increased FPPPA charges at least eight times. The last hike was in January 2023 after the state Assembly elections concluded. Currently, the state government charges an FPPPA of Rs 2.85 per unit of energy consumed. The fuel surcharge was Rs 1.8 per unit in April 2021.