Ratnagiri Gas to sell power to Maharashtra at Rs 2.70 per unit

In line with the target to restart Dabhol power plant next year, Ratnagiri Gas and Power Pvt Ltd will soon begin process for signing a Power Purchase Agreement (PPA) with Maharashtra with an offer to sell power at around Rs 2.70 per unit "" nearly one-third of Enron prices.

Within days of the Bombay High Court approval for transfer of Dabhol assets, a senior National Thermal Power Corporation (NTPC) official said: "We will now start talks with Maharashtra State Distribution Company for finalising a PPA." Ratnagiri Gas and Power, in which NTPC, GAIL and lenders have 28.33 per cent equity each and Maharashtra State Electricity Board (MSEB) has 15 per cent, is taking over the assets for about Rs 80.5 billion crore.

The newly-floated company would sell MSEB 95 per cent of the electricity generated from its 2,184-MW plant, which is later planned to be scaled up to 4,000 MW by November 2006, after the completion of the second phase.

The remaining 5 per cent of the power generated could either be sold to another state directly or through a trading company, the official said. The PPA is likely to be signed in a month after which Ratnagiri Gas and Power would approach Central Electricity Regulatory Commission (CERC) for approval of tariff, he added.

Ratnagiri would offer power to MSEB at a fixed cost of Rs 0.96 per KilowattHour (unit), in addition to the variable cost that could be about Rs 1.60-1.70 per unit. In other words, the bulk tariff would be in the range of Rs 2.50-2.70 depending upon the price of imported LNG.

Though the tariff was earlier estimated to be about Rs 2.30, the higher cost of Rs 2.70 would even now be less than half the price of Rs 7 at which erstwhile US energy trader Enron was selling power to Maharashtra.