The government has invoked Section 11 of the Electricity Act mandating all imported coal-based plants to start operations from March 16, a measure to address an expected high demand over April and May.
In a letter dated February 27, Tata Power said its arm, Coastal Power Gujarat Ltd (CGPL), which operates the 4,000 MW Mundra units, would not be able to operate further under Section 11 of the Electricity Act, 2003 unless the dues from distribution companies were cleared.
It also asked the Centre to facilitate a special power purchase agreement with the five states the project supplies power to or terminate the power purchase agreements with these states so that CGPL could sell electricity on exchanges, according to people aware of the details.
Tata Power did not respond to an email seeking comment till press time Tuesday.
The plant has not started operating yet. The company told the government that CGPL did not have funds to source coal for the new Section 11 period from March 16 to June 15.
One of the people said the recent turn of weather that has resulted in lower power demand and brought down electricity rates may also have led the plant to not start operations.
