Dues still unpaid, Adani shuts Tiroda plant completely

NAGPUR: The power crisis in the state seems to be taking a turn for the worse, with Adani Power completely shutting down its 2,640MW Tiroda plant over non-payment of dues by MSEDCL. Until the early hours of Monday, one 660MW unit was generating, but it too has been taken offline.
Even though it is deprived of over 2,300MW, MSEDCL is managing the show because of low demand due to rains.However, if the situation is not resolved soon, it will have to enforce power cuts when demand starts rising within a few days.
Shortage of coal in the country is the root of the problem. Adani has to use costly e-auction and imported coal, which has increased generation cost. The plant is no longer viable at the earlier decided tariffs.
MSEDCL says that it has cleared Adani's dues. A senior official admitted that Adani had served it a notice, but as soon as MSEDCL received a subsidy instalment from state government Adani was paid its money. The government is paying subsidy to MSEDCL for keeping the tariff low.
Despite repeated attempts, Adani Power officials refused to say whether MSEDCL had cleared their dues. They are also not ready to reveal the reason for shutting down their plant.
However, sources in MSEDCL said the company had paid Adani only a part of its dues. "Chief minister Prithviraj Chavan had a closed-door meeting with Adani Group chief Gautam Adani a few days ago. The CM promised to clear Adani's dues soon in instalments. However, Adani did not agree because he feels that once code of conduct comes into force, the CM may not be in a position to fulfil his promise," a source said.
While Adani officials are not talking to the media, the reasons for closure of Tiroda plant can be found in the company's petition before the Maharashtra Electricity Regulatory Commission (MERC) seeking tariff hikes. It had filed the first petition saying that it had been deprived of coal linkage for 800MW, when its captive mine at Lohara was de-allocated. It was forced to buy coal from open market, which had increased the cost of generation and in the absence of a tariff hike it was suffering huge losses.
A state government committee had also reached the same conclusion. MERC increased tariff for 800MW power by Rs 1.01 per unit in May. Adani again filed a petition that it was unable to recover cost of imported coal. Last month, MERC increased the tariff for incremental generation by use of imported coal at the rate of Rs 1.95 per unit.
Similar thing has happened with Haryana. Adani's cost of generation from its Mundhra plant has increased due to use of imported coal. Haryana refused to pay the hiked tariff, and when Supreme Court ruled in its favour, Adani stopped supplying over 1,400MW to the state leading to power cuts.