Information Technology Minister Ponnala Lakshmaiah has urged the Centre to increase gas allocation to Andhra Pradesh to tide over the present shortfall.
Speaking at the Power Ministers Conference in New Delhi on Tuesday, he said that due to shortage in gas supply in AP, only 1,170 MW of capacity was being used against the total capacity of 2,770 MW. Additionally, more than 2,400 MW of gas-based capacity was available and could also be utilised to meet the energy deficit if gas was made available.
Pointing out that AP had been worst hit, he requested the Centre to give priority in allocation of power from unallocated share of Central Generating Stations (CGS) to tide over the current deficit.
Penalty clauses
He said coal suppliers should enter into Fuel Supply Agreements (FSA) with existing and upcoming power plants. Appropriate penalty clauses should be factored in the FSA for any shortfall in coal supply.
Mr. Ponnala said natural resources were the preserve of the people of India and could not be exploited by monopolies/private parties for profiteering, especially in a constrained economy like India. Fuel pricing in India should not be determined based on international price benchmarks but on the basis of affordability and purchasing power parity of the country.
The Minister also opposed the proposed pool price mechanism since this has the potential to distort market signals and negatively impact existing power stations. “Increase in domestic coal cost in a price pooling scenario will increase the cost of generation and result in higher burden on the consumers,” he said.
Regulators sought
Referring to Coal India’s cash reserves of Rs.55,000 crore, he said this amount should be utilised to increase coal production and operate at lower profit margins to reduce the cost of coal. He also wanted regulatory mechanism to determine the domestic coal price being supplied by coal companies. “It is high time regulators are appointed for coal sector and the railways to oversee the reforms,” he added.
Mr. Ponnala called for reducing the cost of electricity generation taking into account the affordability and purchasing power parity of India, especially when RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana) has made greater inroads in rural areas. The Cost of Service (CoS) in Andhra Pradesh has increased by about 34 per cent in the last three years, mainly due to the shortage of domestic fuels, increased dependence on imported coal and high power prices in power exchanges.
