Discoms in southern states, Rajasthan to get Rs 15.23-bn benefits from NLC

Technical expertise and efficient mining operations, combined with Prudent cost management, helped reduce the cost of transfer price, say NLC officials

Power distribution companies in southern states and Rajasthan will get benefits to the tune of Rs 15.23 billion from NLC Ltd, formerly known as Neyveli Lignite Corporation, a Navaratna company,  with a transfer price cut resulting in a total reduction in power tariff. The reduction has been to the tune of Rs.0.80 to Rs 1.33 per Kwhr resulting in a huge benefit to consumers. This comes against the backdrop of gains from goods and services tax (GST) rollout and the company's new efficiencies in mining activities.

NLC officials said that through technical expertise and efficient mining operations, combined with prudent cost management, the Navratna company had been able to reduce its lignite transfer price for captive use by around Rs 300 a tonne in the current financial year, leading to a lowering of power tariff in the range of Rs 0.35 to Rs 0.58 per Kwhr of electricity from its power plants from April-May 2018. 

On account of the reduction in transfer price, around Rs 6.83 billion will be passed on by the company to the beneficiary power distribution companies in the southern region.

In addition, earlier with reforms coming through Government initiatives of GST roll out with effect from July 1, 2017,   NLCIL, as a power generator using lignite from its own mines passed on the benefit coming from the non-applicability of compensatory cess which resulted in reduction of power tariff ranging from Rs 0.45 to Rs 0.75 per Kwhr based on primary fuel consumption in its various power plants.  

That time around Rs 6.31 billion benefit (for nine months) was passed on to user discoms in southern states as well as in Rajasthan. 

Now with the further reduction of transfer price as stated above, the total reduction in power tariff has been to the tune of Rs 0.80 to Rs 1.33 per Kwhr resulting in a huge benefit to the consumers by almost Rs 15.23 billion per annum.