NEW DELHI: Lenders’ rush to complete the resolution of a few stressed power plants by March-end may run into a rough patch as the electricity regulator has sought lower tariff from projects being bought at very low valuations.
The Uttar Pradesh Electricity Regulatory Commission (UPERC) has set the precedent that will benefit power consumers but might dissuade bidding firms.
The regulator, while hearing a case filed by the State Bank of India for approval to transfer the ownership of Jaiprakash Associates’ Prayagraj plant to Resurgent Power, said on March 7 that the sale of power assets by banks at lesser valuation without tariff adjustment will create a “perverse incentive” for buying these assets and pave way for an undue “arbitrage”.
