The Gujarat Congress on Tuesday accused the BJP-led government in the state of buying power from Adani Power Limited (APL) at rates more than triple than what was decided upon over 15 years ago, and allegedly paying the company crores in excess. The state, meanwhile, maintained that the charges included the cost of buying coal that was factored into the electricity rates through a government resolution issued in February 2022. At the Budget Session of the state Assembly on Tuesday, nine Congress MLAs questioned the government about the power it had purchased from APL in 2022 and 2023. Speaker Shankar Chaudhary remarked that "this tactic" of the Opposition to have multiple MLAs ask the same question just so that the questions are addressed on priority, “is not right”. Congress Legislative Party (CLP) leader Amit Chavda said, “It is not the case that we are after Adani but we have to worry if our taxpayers’ money is being looted. Double engine sarkar doesn’t mean that they do double the profit.” He added that in 2022, the average cost per unit of power purchased stood at Rs 7.85 and in 2023, the average was Rs 5.33 per unit. “This means that more than double the cost was paid against what was agreed initially in the PPAs (power purchase agreements), where average cost per unit was Rs 2.89 and Rs 2.35 (in the two PPAs, respectively). If we total this, in two years, power was purchased (from APMuL) at a total cost of Rs 8,265 crore. This is citizens’ tax money. This is a 25-year agreement (since 2007) and still so many years are left (of this agreement),” said Chavda. APL was the company with which Gujarat Urja Vikas Nigam Limited (GUVNL) had signed PPAs, which is now known as APMuL - Adani Power Mundra Limited. Responding to Opposition’s query on why the government continued to purchase from APL at higher rates, the state energy department stated that the Indonesian coal index (HBA), which normally averaged around USD 90 per metric tonne, saw a steep rise after September 2021, with August 2022 witnessing prices as high as USD 331 per metric tonne. As a result, most of the imported coal-based plants at the national level stopped generating electricity, as the PPAs or supplemental power purchase agreements (SPPA) did not cover the high prices of coal. It added that gas prices in the international market, too, saw a steep rise following the Russia-Ukraine war and thus, “it was not possible to get the production as per the installed capacity even from the gas-based stations”. To overcome this and meet the growing demand of the entire country, the Union government ordered that imported coal-based power plants be run at full capacity through periodic circulars issued since May 5, 2022 and now extended to June 30, 2024, the government said. The department in a written reply further said that in 2007, the government, through GUVNL – the state electricity board – entered into two PPAs with APL for supply of power at the rate of Rs 2.89 per unit and Rs 2.35 per unit as energy charge for 25 years. According to the reply, data from 2022 and 2023 (until December 31, 2023) shows that lowest energy charge that GUVNL paid to APL to buy power was last August – an average of Rs 3.24 per unit. The highest was paid last February, average of Rs 9.03 per unit. In 2022, September saw GUVNL paying the highest average rate of Rs 8.85 per unit. The lowest that year was paid in February 2022 at Rs 5.38 per unit. The reply also said that GUVNL purchased 6,007 million unit (MU) of power in 2022 and another 7,425 MU in 2023 from APL. The department, meanwhile, told the Assembly that as APL did not figure in the "merit order" as prescribed by Gujarat Electricity Regulatory Commission (GERC) last June and July, GUVNL did not pay the energy charge for the two months and only fixed cost payment was made. An order of the Central Electricity Regulatory Commission (CERC) dated June 13, 2022 - available in the public domain - in connection to a dispute concerning GUVNL and APMuL, had recorded that with tariff-based competitive bidding, GUVNL and Adani Power (predecessor of APMuL) entered into two PPAs – one dated February 2, 2007, for supply 1,000 MW power, and another dated February 6, 2007, also for supply of 1,000 MW of power. The February 2 PPA was premised on availability of domestic coal by GMDC. On account of failure of GMDC to make domestic coal available, APMuL terminated the PPA from January 4, 2010. However, APMuL supplied power to GUVNL in accordance with the PPAs by using imported coal from Indonesia. With a change in law in Indonesia – which aligned any sale of coal from Indonesia with HBA index price in September 2010 – imported coal prices became higher and APL sought resolution of pricing issues. The Gujarat government had then constituted a high-power committee to resolve the issues. Subsequently, GUVNL and APMuL signed supplementary PPAs in December 2018, amending the original PPAs, including prices, which were also approved by CERC. As per the department’s reply, the Gujarat government passed a resolution on February 25, 2022, where the cost of obtaining coal was also included in the calculation of electricity rates. Subsequently, further supplemental PPAs were entered into by GUVNL with APL to incorporate the amendments on March 3, 2022. Under the latest SPPAs, charges are currently paid to APL at provisional rates. According to a GERC official, this implies that the final payment is made by GUVNL subject to audit of bills and only a percentage of the costs are paid periodically to APL.
