Tamil Nadu tariff order

RNS Number : 6563A

OPG Power Ventures plc

03 April 2012

 



3^rd April 2012

OPG Power Ventures plc

("OPG" or the "Company")

Tamil Nadu State Electricity Tariff Order

OPG is pleased to provide an update following the issue of a tariff order for 2012-13 by Tamil Nadu Electricity Regulatory Commission ("TNERC") on 30^th March 2012.  The new tariffs take effect from 1^st April, 2012 and will be valid until 31^st March 2013.

Selected key features of the TNERC order are as follows:

·      An increase in regulated tariffs for virtually every category of consumer is expected to raise Tamil Nadu 
Electricity Board's ("TNEB") revenues by 37%, reducing its projected deficit;

·      Tariffs for high tension industrial users have effectively increased by INR 1.55 per Kwh or 34.5%;

·      An increase in transmission & wheeling charges of INR 0.32 per Kwh;

·      A fuel surcharge, the Fuel Price Adjustment Charge (FPAC), is to be established quarterly by TNEB in 
accordance with specific formulae and passed on to its customers;

·      TNEB is to make applications for any required tariff revisions on an annual basis in future.

This is not a comprehensive list of the changes introduced by the TNERC order and the full text of the order can be found at www.tnerc.gov.in

The Board is pleased with these developments and expects the contents of the tariff order to result in overall improved pricing for the Company's sales in 2012-13 with the level of expected impact becoming clearer as existing supply contracts are renewed and new contracts signed over the next two to three months.

Arvind Gupta, Chief Executive commented: "The tariff changes are the first such updates in several years in response to a clearly unsustainable position for the TNEB.  The tariff increases and the adoption of a quarterly fuel surcharge represent a structural shift in the pricing environment.  The regulator has signalled an intention to improve the financial health of TNEB and to provide an environment conducive to investment in the power sector.  The regulator will also, henceforth, require and conduct annual reviews of the tariff.

"Recent federal budget pronouncements that reduce counter-veiling duty on imported coal from 5% to 1% and eliminate customs levies altogether for two years are expected to favourably impact our fuel costs in 2012-13.  More importantly, these changes in our view reinforce the intent of policymakers at various levels to support the sector.  With 113 MW in generation and over 300 MW in new capacity to be rolled out over the next couple of years in Tamil Nadu alone, we look forward to the Company benefiting significantly from these changes over the medium term."

For further information, please visit www.opgpower.com or contact:

OPG Power Ventures plc	[phone]
Arvind Gupta (Managing Director)
V. Narayan Swami (Finance Director)
Cenkos Securities (Nominated Adviser & Broker)	[phone]
Stephen Keys/ Camilla Hume
Tavistock Communications	[phone]
Simon Hudson

About OPG

OPG is operating and developing power projects in India under the group captive model with 113 MW in operations and a further 742 MW under development. In the six months ended 30 September 2011, from its unaudited interim results, the group's revenues were £23.85 m and profit before tax was £3.03m.

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