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Ponni Sugars’ cogeneration project hit by Tamil Nadu power tariff order

According to reports, Ponni Sugars (Erode) Ltd which plans to commission its cogeneration plant this month, is likely to appeal against the tariff order passed by the Tamil Nadu Electricity Regulatory Commission.

According to the information provided to the BSE, the company said the tariff order of July 31, 2012, has pegged the power tariff at Rs 3.76 a unit for bagasse-based cogeneration plants commissioned on or after August 1, 2012. This is lower than the prevailing tariff of Rs 4.47/ unit.

This 18 per cent drop in tariff will adversely affect the project.

The company said despite the increasing capital cost and operating expenses of cogeneration projects that warrant an increase in regulatory tariff, Ponni Sugars is faced with lower tariff. The company will study the Commission’s order in detail and decide about approaching the appropriate Appellate forum.

Ponni Sugars has set up a 19 MW cogeneration plant at a cost of Rs 102 crore. Another major sector that will be affected by the order is the cogeneration plants coming up in the co-operative sector sugar mills in the State.

Over 183 MW of cogeneration capacity is being set up in 12 co-operative sugar mills in the State.

These are expected to be commissioned in May 2013 at a cost of over Rs 1,100 crore.

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