Private power producers pitch for gas price pooling

Private power producers have made a pitch for pooling the price of domestic as well as imported gas aimed at revamping over Rs 1 trillion worth of plants stranded due to scarcity of fuel.

In a letter to the Power Minister Piyush Goyal, Association of Power Producers' a lobby representing as many as 20 private generators, said the government should seriously consider pooling the prices of natural gas.

The power generation companies are seeking to balance any rise in domestic or international gas prices by pooling them and deriving at an average rate.

"Generation of environment friendly gas-based power can be achieved through implementation of pooling mechanism through appropriate pricing of domestic gas and imports of natural gas," Ashok Khurana, Director General of Association of Power Producers, said in the letter to the Power Minister.

APP said that in order to keep tariffs at acceptable levels, the viability gap funding needs to be shared by all the stakeholders.

"The entire gas based power capacity of 24,149 MW constitutes an investment outlay of more than Rs 1,20,000 crore and debt exposure of nearly Rs 85,000 crore," Khurana said.

Majority of these projects are on the verge of becoming Non-Performing Assets (NPAs) due to non-availability of gas, he added.

Last week, the Narendra Modi-led government postponed the decision to revise the price of domestic natural gas till September 30.

All prices prevailing for domestically produced gas including from RIL's KG D6 block will continue till then and the contractors shall enter into gas sales agreements accordingly.

The decision to revise the prices of domestic natural gas was taken by the previous United Progressive Alliance government in June, last year.