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Power tariff to rise
Costs of imported coal rising steeply Power producers to pass on higher costs to consumers Unit tariff likely to go up by 15-17 paise ...
- Costs of imported coal rising steeply
- Power producers to pass on higher costs to consumers
- Unit tariff likely to go up by 15-17 paise
- Chidambaram calls it marginal hike
Electricity tariff across the country will increase by a minimum of 15 to 17 paise per unit after the Central Government on Friday allowed power producers to pass on higher cost of imported coal to consumers. Finance Minister P Chidambaram said the Cabinet Committee on Economic Affairs (CCEA) approved the pass through proposal, which would result in power tariff hike.
"There will be small increase in power tariff. It will be very marginal increase on unit cost of power depending upon the cost of import of coal," Chidambaram said briefing the media. "They (IPPs) can import coal themselves if they wish, otherwise Coal India will import and this additional price which we pay for imported coal, obviously, has to be passed through in the power tariff," he added.
Chidambaram said: "It is better to have power and pay a few paise more rather than not to have power at all. It is better to have our power plants working and producing power than keep them shut down after investing thousands of crores. For every MW today, I think the capital cost is between Rs 5-6 crore."
A Coal Ministry official said the move would result in higher power tariff to consumers. "Though the quantum of the coal to be imported has not been worked out, as per estimates, if Coal India imports 15 per cent of coal, it would result in electricity tariff hike by 15 paise to 17 paise per unit," the official said.
Chidambaram further said the government has initiated measures to augment production and "by first week of July certain other decisions will be taken to open up more coal mines and to produce more coal". In the meanwhile, coal imports were necessary, he added.
Coal Minister Sriprakash Jaiswal, however, said the decision would not impact consumers. The decision would also not affect signing of fuel supply agreements (FSAs) by CIL with power firms, he added. The pass through mechanism will be applicable for nearly 78,000 MW of thermal stations commissioned after 2009.
