Energy cost likely to be below provisional cost: power utilities

All bills paid for Chhattisgarh power will get revised: CMD

The power utilities of Telangana have estimated that the cost of energy being purchased from Chhattisgarh would be lesser than the provisional cost of Rs. 3.90 per unit being paid by them even after the Chhattisgarh Electricity Regulatory Commission has approved the project cost of Marwa at Rs. 8,892.51 crore, which is higher than what they were expecting.

In the multi-year tariff order issued by Chhattisgarh ERC in April 2016, it was decided that “the provisional tariff has been considered as Rs. 3.90 per unit comprising of energy charge of Rs. 1.20 per unit for the purpose of computing fuel cost adjustment charges. However, the final tariff will be based on the capital cost to be approved by the Commission”.

The provisional tariff of Rs. 3.90 per unit would, however, not include water charges, pension and gratuity contribution, fuel cost adjustment, start-up power charges, SLDC charges, taxes and duties, if any, and other incidental charges, which would be billed separately, the April 2016 order stated. After entering into 12-year purchase agreement with Chhattisgarh State Power Generation Corporation for 1,000 mw power the two Distribution Companies of Telangana have been availing energy from Marwa thermal power project from April 2017.

Although CSPGC is scheduled to file final true up for 2017-18 next year, Chairman and Managing Director of TS-Genco and TS-Transco D. Prabhakar Rao said the cost of Chhattisgarh power would actually come down below the provisional cost of Rs. 3.90 per unit. He told The Hindu that the fixed charges of energy would work out to Rs. 2.32 per unit based on the aggregate revenue requirement approved by Chhttisgarh ERC. Along with the variable charges of Rs. 1.39 per unit, the unit cost would work out to Rs. 3.71 per unit, he explained.

“All the bills paid for Chhattisgarh power by our utilities will get revised to Rs. 3.71 per unit and as we go forward the fixed charges will come down further after three years since the Chhattisgarh ERC has finalised the tariff from 2018-19 to 2020-21,” Mr. Prabhakar stated. The annual fixed charges approved by the ERC are Rs. 1,606.08 crore, Rs. 1,599.32 crore and Rs. 1,559.3 crore, respectively, for the three years.