Indian Power Sphere: 03/03/15

March 3, 2015

KERC approves average tariff hike of 13 paise per unit

The Karnataka Electricity Regulatory Commission has approved revision of electricity supply tariff for all the Electricity Supply Companies in the State for the Financial Year 2015-16, by allowing an average tariff increase of 13 paise per unit for different categories of consumers.

The revised tariff will come into effect for the electricity consumed from the first meter reading date falling on or after April 1, 2015.

As against an increase of 80 paise per unit sought by the ESCOMs uniformly for all categories of consumers, KERC has allowed an average tariff increase of 13 paise per unit (ranging from 10 paise to 20 paise) for different categories of consumers other than Irrigation Pump Sets and "BhagyaJyothi/KuteerJyothi" households.

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Post Budget, around 5-10% hike in Electricity Tariff is expected

On account of higher freight charges proposed in the Railway Budget 2015 and the doubling of clean energy cess in the Union Budget 2015 are expected to result in around 5% rise in electricity prices. Further 5% increase is expected to come from other input costs such as salary & wages, components & spares etc.

In addition, utilities that have power purchase agreements in place without the ability to pass on higher generation costs to consumers are expected to be affected.

Finance minister Arun Jaitley proposed to increase the cess on coal to Rs 200 per tonne to finance clean environment initiatives. Coal India passes on the cess to consumers, which means the effect will be felt by power companies that consume coal.

Generation costs may rise 5-6 paise per unit due to higher rail freight charges, according to officials at NTPC, the country's biggest power company. Along with the increased clean energy cess, the rise in cost works out to 12-14 paise per unit, which is 5% of the current cost of Rs 2.80 that NTPC incurs to produce a unit of power. The cost of generating electricity for NTPC, which is allowed to pass on higher input charges, is on the lower side and the impact on the utility's consumers will be less than for customers of other power companies.

Companies with older power plants have a higher cost of generation since they consume more coal to produce a unit of electricity. The effect of higher power costs will vary for customers.

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Two 600 MW units of MPPGCL Project in MP to be inaugurated by Primer Minster on March 5.

Two 600 MW unites of Shree Singaji TPP in Khandwa district to be dedicated by Prime Minister Narendra Modi on March 5.

Further, the foundation stones of two additional 660 MW units of the same plant will also be laid.

Shree Singaji Thermal Power Plant is a coal-fired project located near Dongaliya village in Khandwa. The project is owned by MPPGCL.

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Tata Power commissions first 63 MW unit of Bhutan hydro plant

Tata Power has commissioned the first unit of its 126 MW Dagachhu hydro power plant having a capacity of 63 MW in Bhutan.

Dagachhu project is a joint venture between Tata Power and Druk Green Power Corporation, owned by Royal Government of Bhutan and National Pension and Provident Fund of Bhutan.

With the commissioning of the first unit of this plant, Tata Power's overall hydro power generation capacity now stands at 513 MW and the total at 8,684 MW.

Dagachhu Hydro Power Corporation has entered into a 25-year Power Purchase Agreement with Tata Power Trading Company Ltd (TPTCL, a company of Tata Power) for sale of power from the project. The power generated from the project shall be sold by TPTCL in the Indian power market.

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