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India’s Gujarat Seeks to Lower Solar Power Tariffs

According to reports, India’s Gujarat state, home to half the nation’s solar power-plant capacity, is seeking to cut the rate it pays to projects, citing the owners’ excessive profits.

Gujarat Urja Vikas Nigam Ltd., the state-run bulk buyer of solar power, submitted a petition to regulators because of the “unjustified and windfall gains” by plant owners, according to a copy obtained by Bloomberg News and confirmed by P.K. Mishra, chairman of Gujarat Electricity Regulatory Commission.

The purchaser has signed 88 contracts for a total of 971.5 megawatts of solar capacity with developers including Adani Enterprises Ltd. (ADE), Moser Baer India Ltd. (MBI), Tata Power Co. (TPWR), and Welspun Energy Ltd. since 2010, according to the petition.

A “reasonable and prudent tariff” would be about 9 rupees (15 cents) a kilowatt-hour, less than the average 12.54 rupees over 25 years under current contracts, it said in the petition.

The first hearing on whether regulators will accept a case based on the petition will be held on July 23, Mishra said.

Gujarat Urja Managing Director Raj Gopal didn’t immediately respond to an e-mail and two phone calls seeking comment.

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