Orissa to tax power sold outside state

The Orissa government's plans of levying a surcharge on the power sold to utilities outside the state has foxed the Central Electricity Authority and the generation companies.

In what seems to be the first instance of such a demand, the state government intends to compensate itself on account of environmental losses due to generation and allied activities.

It wants 5 paise on every unit of power sold by the power generation utilities outside the state and 12 per cent subsidised power, for which it will pay only fuel charges.

"The bulk of the power generated in the state is not utilised within it. A substantial chunk of it is sold to Karnataka and Maharashtra. The state has come up with this demand as it wants to be compensated for the environmental loss," a senior Central Electricity Authority official told Business Standard.

The issue will be discussed at the upcoming meeting of the National Development Council. However, Orissa has indicated that it is open to considering other options that may emerge at the meeting.

"The charge is not being paid by the power generation utilities at this point of time. Clarity will only come about after the meeting," the official said.

Orissa has a total installed power generation capacity of around 7,000 Mw. Out of this, the power generation utilities owned by the state contribute 2,320 Mw with the central public sector unit's NTPC Ltd's power generation plant at Talcher contributing 3,000 Mw.

The Orissa government had asked for 12 per cent free power from the proposed 4,000 Mw ultra mega power project in the state. It later dropped this demand.