POWER FROM CHHATTISGARH TO COST LESS
The latest decision by the Chhattisgarh Electricity Regulatory Commission (CERC) will bring relief to Telangana government which has a 12-year power purchase agreement (PPA) with the neighbour for 1,000mw. The CERC has finalised the cost of Marwa Thermal Power Project (MTPP) at `8,892.5 crore, marginally below the `9,000 crore proposed by Chhattisgarh government.
The CERTC is yet to decide on the power tariff. However, Telangana officials are of the view that there would be some relief to the exchequer.
CERC chairman Narayan Singh and member Arun Kumar Sharma said the capital cost for MTPP, which comprises two power plants with a capacity of 500mw each, were fixed as `8,892.50crore.
Mr D. Prabhakar Rao, CMD of TS Genco and TS Transco, said that the power tariff will be `3.61 per unit as against the present price of `3.90 per unit. “The price has been reduced owing to reduction in variable cost,” he said.
However, analysts are of the view that it is too early to estimate power tariff as only the cost of the MTPP has been fixed. “We (Telangana) have to pay fixed charges annually,” said an analyst.
“The latest approved cost of the MTPP is marginally below the `9,000 crore proposed by the Chhattisgarh government and more than what Telangana government asked for. We have to wait and see how it will take turn,” said K. Raghu, an energy expert.
“The state government should call for competitive bids for buying power. This MoU route is not advisable. However, unless it is approved by Telangana ERC, the state cannot purchase power from Chhattisgarh at the escalated price,” observes M. Venugopala Rao of the Centre for Power Studies.
Chhatisgarh Genco is charging `3.90 per unit from Telangana and has filed a petition in CERC seeking power tariff hike citing that cost of power projects has escalated by `9 crore per megawatt.
TS Transco had entered into an agreement with Chhattisgarh in November 2014 for electricity supply at `3.90 per unit for 12 years. Discoms in Telangana in this 1,000 MW deal are to pay `1,000 crore every year, adding up to `12,000 crore for 12 years, said analysts.
In June, TS Transco had made a representation to CERC and expressed concern that cost escalation of power projects should not be passed onto Telangana.