The average cost of electricity bought by the Gujarat government from Adani Power has increased by 102% between 2021 and 2022, the state Assembly was told on Saturday, reported The Indian Express.
In response to question raised by Aam Aadmi Party MLA Hemant Ahir, State Energy Minister Kanu Desai told the House that the average cost of electricity bought from Adani Power went up 102% from Rs 3.58 per unit to Rs 7.24 per unit in 2022.
Despite the increase in cost, the state government bought 7.5% more power from Adani Power in 2022 as compared to 2021. During the two-year period, the Gujarat government bought 6,007 million units of electricity in 2022 from 5,587 million units a year earlier.
In this time, the government paid Rs 8,160 crore to Adani Power that includes fixed charges and per unit cost of power.
This is despite the fact that bids placed by Adani Power in 2007 had allowed the company to sell electricity for 25 years ranging between Rs 2.89 per unit to Rs 2.35 per unit.
Desai told the Assembly that the Adani Power project was dependent on imported coal from Indonesia and after 2011, the firm was unable to generate power to full capacity due to “unscheduled increase in the price of coal”, reported The Hindu.
“Considering this, a high-powered committee was formed by the state government,” the minister said. “The government vide resolution dated December 1, 2018, approved the increase in power purchase rates by accepting the recommendations of the committee, with a few amendments, as a policy decision.”
Another deal to revise the hike in purchase rate of electricity was signed between the state government with Adani Power in 2021 due to the increase in international coal prices, Desai said.
On the ways the government will recover the rising cost of electricity purchased from Adani Power, KK Bajaj, an expert in the field, said: “The government will simply hike the Fuel and Power Purchase Price Adjustment 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 the Fuel and Power Purchase Price Adjustment charges at least eight times.
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!