The Central Electricity Regulatory Commission (CERC) on Friday approved higher tariff for Adani Power's 2,000 megawatt (MW) capacities at its Mundra power plant.

The power plant was facing hardships after compensatory tariff was disallowed by the apex court in April 2017. Adani Power has been seeking to pass through higher cost of imported coal to run this plant. The cost of fuel rose after Indonesia changed its regulations. The Mundra plant in Gujarat is an imported coal-based plant.

"The Commission in exercise its powers under Section 79 (1) (b) of the Act read with Article 18.1 of the PPAs (power purchase agreements) approves the Supplemental PPAs to Bid-01 PPA and Bid-02 PPA," the CERC said in an order.

Last year, power distribution firm Gujarat Urja Vikas Nigam Ltd (GUVNL) had sought the CERC approval to amend terms of the PPA for 2,000 MW capacities with Adani's 4,620-MW Munda power plant.

Disposing of the petition, the power regulator said said these projects (Adani and Tata's Mundra plants) are efficient, on super-critical technology and are base-load plants and therefore, it makes economic sense to keep them operationalised.

"In sum, the supplemental PPAs entered into by the Petitioner and Respondent No.1 (GUVNL) in the light of the HPC (high-powered committee) recommendations and the Government of Gujarat order are in public interest designed to meet the long-term energy requirement of the consumers of Gujarat at a competitive price," it added.

The Gujarat government took a policy decision in December last year to give a package to rehabilitate the imported coal-based stressed power projects located in the state.

Based on decision, GUVNL and the generator had finalised the supplemental PPAs, which have been submitted for approval of the commission.

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