Lok Sabha Question No. 2908 (UNSTARRED), answered on 2015-08-06
Subject: Procurement Cost of Power
Ministry: POWER
Asked by: RITA TARAI, BALABHADRA MAJHI, BAIJAYANT "JAY" PANDA, RABINDRA KUMAR JENA

## GOVERNMENT OF INDIA MINISTRY OF POWER

LOK SABHA UNSTARRED QUESTION NO.2908 TO BE ANSWERED ON 06.08.2015

PROCUREMENT COST OF POWER

2908.  SHRIMATI RITA TARAI: SHRI BALABHADRA MAJHI: SHRI BAIJAYANT JAY PANDA: SHRI RABINDRA KUMAR JENA:

Will the Minister of POWER be pleased to state:

(a) the various parameters/factors which are taken into account for fixing the rate of power produced by National Thermal Power Corporation (NTPC) plants;

(b) whether the  procurement  cost  of  power  from  Barh  State-I  of  NTPC  in  Bihar  is very high in comparison to Eastern Region of NTPC station if so, the details thereof and the reasons therefor;

(c) whether  certain  States  including  Odisha  have  requested  to  de-allocate  power allocated from NTPC stations located outside the States and if so, the details thereof and the action taken thereon; and

(d) the steps taken by the Government to bring down the power procurement with ensuing reduction in retail prices to the end users?

## A N S W E R

THE MINISTER OF STATE (INDEPENDENT CHARGE) FOR POWER, COAL AND NEW & RENEWABLE ENERGY

( SHRI  PIYUSH GOYAL )

(a) : The tariff of NTPC stations is determined by Central Electricity Regulatory Commission  (CERC)  based  on  the  prevailing  Tariff  Regulations.  The  current  Tariff Regulations as issued by CERC are valid for the period from 01.04.2014 to 31.03.2019.

(b) : The project at Barh Stage-1 is under construction and not yet commissioned. The final costs can be known only after completion of the project and determination of tariff will be done by CERC.

(c) : Governments of Odisha, Delhi, Himachal Pradesh, Rajasthan, Meghalaya, Sikkim and Damodar Valley Corporation have requested for surrender of some power from Central Generating Stations.

.........2.

As per the CERC (Terms and Conditions of Tariff) Regulations, 2014, the Central  Government  can  reallocate  such  surrendered  share  depending  upon  the technical feasibility of power transfer to the willing utility/buyer and specific agreements reached by the generating company with such utility/buyer. The copies of letters of surrendered share of this States/Utility have been forwarded to other State. As and when the other states indicate their willingness, this may be re-allocated.

- (d) : The  steps  taken  by  the  Government  to  bring  down  the  cost  of  power procurement with ensuing reduction in retail prices to the end users are:
1. Government of India  has issued direction  to CERC under Section 107 of Electricity Act, 2003 and advised State Government to issue similar direction to SERC/JERC  under  Section  108  of  Electricity  Act,  2003  to  adopt  procedure  for downward  revision  of  tariff  in  already  concluded  PPAs  under  section  62  and section 63 of Electricity Act, 2003 when coal is being procured from coal mines auctioned or allocated under Coal Mines (Special Provision) Ordinance, 2014.
2. Ministry of Power has issued Resolution on 16th April, 2015 for amendment  to  the  guidelines  for  future  procurement  of  power  by  distribution licensees  in  the  DBFOO  (earlier  Case-I  bidding)  from  thermal  power  stations sourcing coal from the mines auctioned  as allocated under  Coal Mines  (Special Provision)  Ordinance,  2014  in  order  to  ensure  that  the  benefits  of  coal  block auction are passed on to the consumers. In the Resolution, the following, interalia, have been stipulated:
- (i) As far  as  the  fixed/capacity  charges  are  concerned,  the  power  procurer shall determine, in advance, in consultation with the Appropriate Commission, an upper ceiling in terms of Rs./Kwh towards the fixed/capacity charges. This shall also be indicated in advance to all the prospective bidders while inviting DBFOO (earlier Case-I) bids as part of bid document.
- (ii) The  power  procurers  may  carry  out  necessary  modifications,  if  any required,  in  the  DBFOO/Case-1  bidding  document  for  giving  effect  to  the  above Guidelines with the concurrence of Appropriate Commission.
3. Government of India has sanctioned a scheme for importing spot RLNG in 2015-16 and 2016-17 for the stranded gas based power plants as well as for plants receiving  domestic  gas  upto  the  target  PLF  select  through  a  reverse  e-bidding process.  The  scheme  provides  for  financial  support  from  PSDF  (Power  System Development Fund). The outlay for the support from PSDF has been fixed at Rs 7500 crores (Rs. 3500 and Rs. 4000 crores for the year 2015-16 and     2016-17 respectively).

*************