Chhattisgarh power unit set to burden consumers

High project cost, at nearly ₹8.9 crore per mega watt, is expected to prove a costly affair

July 09, 2018 10:59 pm | Updated 10:59 pm IST - HYDERABAD

Consumers of energy in the State are likely to be burdened further for utilising power generated at Marwa Thermal Power Project (MTPP) of Chhattisgarh as the Electricity Regulatory Commission there has approved the project at ₹8,892.5 crore, in spite of objections raised by Telangana.

The high project cost, which turns out to be nearly ₹8.9 crore per mega watt, is expected to prove a costly affair to consumers of Telangana as its two power distribution companies entered into a long-term power purchase agreement with the Chhattisgarh State Power Generation Company in September 2015 for supply of 1,000 mw power for 12 years. The PPA did not specify the tariff since the 2x500 mw Marwa project was still under implementation then.

It was agreed then that the cost of supply would be determined by Chhattisgarh ERC later. The two units of the project commenced commercial generation in March and July 2016, respectively. The two power distribution companies of Telangana have impleaded in the hearing related to finalising the project cost and argued for reduction of the cost. The Chhattisgarh ERC, after a long hearing schedule, gave its order on July 7, overlooking the objections of Telangana discoms.

In comparison to the project cost of Marwa, the 800 mw seventh unit of the Kothagudem Thermal Power Station in the State has been established with ₹5,700 crore and the per mega watt cost is less than ₹6 crore although the project cost does not include land cost since land was already available.

It is understood that inordinate delay in completion of the project and high component of interest during the construction have pushed up the project cost ultimately. Although the Chhattisgarh ERC did not specify the cost of supply, it is expected to be more than ₹4 per unit since the project cost is very high.

The Chhattisgarh ERC has fixed the costs for three years from July 2018-19 to March 2020-21, during which period generation is projected at 6,349.6 million units, 6,367 MU and 6,350 MU, respectively at the plant load factor of 76.5%. Attempts to get response of the discoms proved futile.

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