Good News: Gujarat will have a reduction in electricity bills, the government took this decision

The state government has rescinded a resolution allowing power companies to charge higher tariffs due to the increase in coal prices in 2018.  The government has also claimed that the people will benefit from the reduction in coal prices in the international market as per the new decision and guidelines.  According to the new guidelines, people are likely to benefit by 30 paise per unit.  In addition, the government has decided to purchase coal keeping in view the various indexes and prices of the international coal market.



The government has implemented the new guidelines

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 Rejecting the old resolution, the government has now implemented the new guidelines which came into force on 12-6-2020.  Comparing the provisions of the old resolution and the new guidelines, consumers are likely to benefit by 30 paise per unit.  The guidelines will calculate the price of coal based on a well-known and reliable index of the coal market, as well as ensure that the project developer buys coal at a competitive rate, as well as benefit from the reduction in international coal prices.  Due to this the government had entered into agreements with four companies and the resolution dated 1-12-2018 was implemented for it.

 The resolution dated 1-12-2018 was for three imported coal based power projects located in Gujarat.  Under which four power purchase agreements were made for the purchase of coal.  Accordingly, Coastal Gujarat Power Ltd.  The agreement was not signed due to non-consent of other participating states.

 The agreement with Essar Power has also not been implemented

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 On the other hand, Essar Power Gujarat Ltd.  The agreement was given conditional approval by the Gujarat Electricity Regulatory Commission and the agreement has not been implemented as Essar has filed a petition in the Apple Tribunal against the conditional approval.  The supplementary agreement with Adani Power also had a provision in the resolution dated 1-12-2018 that the loss of the previous period would be borne by the project developer.

 GUVNL has been asked to cancel the contract with Adani for violating this condition.  Has filed a petition with the Central Electricity Regulatory Commission and it is pending.  So none of these companies are eligible for tariffs as per the old resolution.  By repealing this resolution, the government has started implementing the new guidelines dated 12-6-2020.

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