Gujarat purchases power at higher price from Adani

This was revealed by Gujarat Energy Minister Kanu Desai in the State Assembly in response to a query from Aam Aadmi Party MLA Hemant Ahir

Hyderabad: At a time when people of Telangana are expressing their gratitude to Chief Minister K Chandrashekhar Rao for not increasing the power tariff and even taking the burden of true-up charges of Rs.12,718.40 crore to be paid to Discoms by power consumers, in Prime Minister Narendra Modi’s home State of Gujarat, the government has allowed Adani Power company to increase the average cost of electricity by 102 percent during the calendar years 2021 and 2022.

This was revealed by Gujarat Energy Minister Kanu Desai in the State Assembly in response to a query from Aam Aadmi Party MLA Hemant Ahir on March 25. He told the House that the average cost of power purchased from Adani Power increased by 102 per cent, from Rs 3.58 per unit to Rs 7.24 per unit in 2022.

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Surprisingly, despite Adani Power increasing the power tariff, the Gujarat government purchased 7.5 percent more power in 2022 than in 2021. In 2022, the government bought 6,007 million units of energy, up from 5,587 million units the previous year and paid Rs.8,160 crore to Adani Power which includes fixed charges and per unit cost of power.

Interestingly, as per the agreement reached in 2007 between the Gujarat government and Adani Power, the company was supposed to sell power for 25 years at prices ranging from Rs 2.89 per unit to Rs 2.35 per unit. However, a supplementary agreement was signed on December 5, 2018 between Adani Power and the State government under which it was agreed to acquire power at fixed energy charges of Rs 4.5 per unit and capacity charges in accordance with the agreement with the company.

Meanwhile, the State government hiked Power Purchase Price Adjustment (FPPPA) charges, which is part of the residential consumer’s bi-monthly electricity bill, at least eight times between 2021 and 2022. The most recent increase occurred in January 2023, after the State Assembly elections.