Power tariff may rise by 40 paise per unit

Power tariffs across India could go up by at least 40 paise per unit if a 2010 Supreme Court directive and a recent law ministry recommendation to the power ministry are implemented.

According to the apex court directive, the existing Central Electricity Regulatory Commission (CERC) tariff system, which has a ceiling on trading margins of 4-7 paise, will only be applicable to entities involved in inter-state power trading, while those operating within the state are exmpted from it.

CERC had fixed and regulated tariff rules for all entities, including distributors, traders and bulk buyers — both private and public — in the power sector. Officials said traders on power exchanges may also see an increase in tariffs – from the existing unit price of Rs 3.50/4.00 – if the exchanges decide to do away with the cap of 0.40-0.70 paise per unit and determine rates according to the demand and supply situation in the market.

CERC officials said individual states must come up with similar tariff rules to prevent rampant increase in power prices. The regulator may recommend an amendment to the existing law to tweak the decision, said official sources.

The total installed capacity of power in India (as on 28-02-2011) stands at 171,926.40 Mw, against 165,00 Mw in December 2010, while per capita energy consumption stood at 612 Kwh. While the installed capacity of thermal power is 111,324.48 Mw — 64.75 per cent of the total installed capacity. Installed base of coal-based thermal power is 92,418.38 Mw — 53.75 per cent of total installed base. Gas-based power stands at 17,706.35 Mw — 10.3 per cent of the total installed capacity. The rest is met by oil-based power which is around 1,199.75 Mw.

The government has set a modest target to add approximately 78,000 Mw of installed generation capacity by 2012 but is likely to miss the deadline. Demand for electricity in India is expected to cross 950,000 Mw by 2030. Maharashtra is the largest producer of thermal power in the country.

According to a survey, India is expected to add up to 113 Gw of installed capacity by 2017. Further, renewable capacity might increase from 15.5 Gw to 36.0 Gw. Rise in private sector participation in power generation has contributed to 40 per cent of the total incremental capacity addition during the 11th plan and is expected to go up to 50 per cent during the 12th plan.