Hit by costly coal, country's largest private power utility Tata Power may again seek Centre's intervention in increasing tariff for electricity generated from its 4,000 MW Mundra UMPP in Gujarat.
Tata Power bagged the Mundra project in 2007 on the basis of the lowest tariff bid of Rs 2.26 a unit, but a change in the coal pricing policy in Indonesia has impacted the cost structure.
According to sources, Tata Power may again approach the Power Ministry to allow the company to raise electricity tariff for the Mundra ultra mega power project.
Tata Power had earlier approached the Power Ministry seeking permission to increase tariff for power produced from the Mundra UMPP, which is based on imported coal.
The Mundra project consists of 5 units -- each of 800 MW -- and the power generated would be supplied to Gujarat, Maharashtra, Rajasthan, Haryana and Punjab.
Late last year, the Indonesian government had said the coal from the country would only be exported at international market prices.
The move, resulting in high fuel prices, has put a question mark over the viability of many projects including Mundra UMPP that were bagged by developers through tariff-based competitive bidding process.
The Association of Power Producers (APP) -- a grouping of about 22 companies that account for over 95 per cent of private generation capacity -- has also sought the Prime Minister's help to address the issue.
Power Finance Corporation (PFC) is the nodal agency for UMPPs and has so far awarded four such projects.
The award of the fifth UMPP, coming up at Bedabahal in Orissa, is expected to be finalised soon.
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