The Power Ministry appears disinclined to allow NTPC to sell electricity from two of its projects at market price, as officials feel that power from the PSU should go to states.
"For Korba and Farakka, they have asked for (nod to sell at market price), we have received the proposal last month... we will take a call accordingly," a senior power ministry official said.
However, Power Ministry's approach so far has been that whatever electricity NTPC generates should go to the states and not sold for profit, he said.
Former Power Secretary H S Brahma had earlier said that NTPC should not sell power in the open market for profit.
NTPC has a generating capacity of 32,000 MW, out of India's total 160,000 MW.
The navratna PSU has been persuading the government to permit it to sell power from its two projects at Korba (Chhattisgarh) and Farakka (West Bengal) in the open market, at market determined prices.
NTPC is expanding the capacities of these two projects which would be completed in the next six months and it is keen to sell the electricity produced from these units as merchant power.
The government, which controls over 80 per cent holding in NTPC, is also concerned over hike in power tariff if NTPC sells merchant power and such a move would impact the consumer adversely.
"If they go for merchant power it (cost of power) would be more," he added.
NTPC had planned setting up merchant plants and the output from those plants would be sold in the open market at the market prices.
At present, NTPC sells 100 per cent of its generation to the state power utilities, distribution companies through long-term power purchase agreements. This exchange takes place as per the allocation finalised by the Union power ministry and based on the tariff determined by the Central power sector regulator, the CERC.
As per the Electricity Act of 2003, a generating company can supply electricity to any licensee. It can tie up for a part of its capacity in long-term power purchase agreement.
