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HindustanTimes Wed,20 Aug 2014

For cheap power, state wants Centre to run Dabhol plant

Dharmendra Jore, Hindustan Times  Mumbai, December 26, 2012
First Published: 02:00 IST(26/12/2012) | Last Updated: 02:01 IST(26/12/2012)

Concerned over the high cost of power sought from the Dabhol plant in Ratnagiri district, the state government, which is also one of its stakeholders, may ask the Centre to allot the power generated at the plant at lower rates using the central pool mechanism.

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The central pool comprises the total power generated by the Centre-owned utilities. Currently, power distribution company Mahavitaran buys 95% of the total power from the Ratnagiri Gas and Power Company (RGPPL) at Dabhol at a rate of Rs5-5.30 for a unit. While the rate in the open market has come down to Rs3.45 for a unit, the central pool charges Rs2.20-3 for a unit. The mechanism helps every state gets its entitled share at affordable rates.

According to sources, the energy department has started looking into the modalities to facilitate the change, especially after Assembly speaker Dilip-Walse Patil's similar suggestion last week. Chief minister Prithviraj Chavan had then assured the House that he would give it a serious thought.

The state could use the central pool mechanism to obtain 30-35% power from the project. The money saved could be used for buying affordable power from other sources.

"Apart from the soaring gas prices, the generation capacity charges make Dabhol power costly," said a senior official. The RGPPL has requested the Central Electricity Regulatory Commission to reconsider the regulation that forces it to pay the generation capacity charges, even while it has not been able to generate more than 700MW in the last 16 months owing to gas shortage. Nearly 5% of RGPPL's power goes to other states like Goa, Daman and Diu.

Since its conception 20 years ago, the Dabhol power project has been dogged by political controversies at every stage. Following the state's refusal to buy power at higher rates, the multinational had stopped its operations in 2001. Seven years ago, the erstwhile Enron-run company was restructured into an Indian joint venture to exclusively help the state in dealing with power crisis.

The company now has the National Thermal Power Corporation, GAIL India, Maharashtra (MSEB) Holding Company, IDBI Bank, State Bank of India, ICICI Bank and Canara Bank as its shareholders.


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