Maharashtra may pay more for Dabhol power

The Maharashtra government may consider to pay a higher price for power from Dabhol. This was indicated by the state energy minister Dilip Walse-Patil.

Patil told Business Standard that it would be "unrealistic to get power at the same rate (Rs 2.30 per unit) when gas prices have shot up so much."

However, he said that until the power purchase agreement (PPA) was received from the Ratnagiri Gas and Power Pvt Ltd (RGPPL), the final price could not be determined. The minister said that the government expected to receive the PPA "very soon".

Union power secretary R V Shahi has said that Dabhol power will be made available to the state at a maximum of Rs 2.50 per unit. At current gas prices, industry sources say, the cost of power will not be less than Rs 3.00 per unit. Shahi also indicated that the difference would be absorbed by the institutional lenders and the state electricity board.

The Dabhol plant is expected to be synchronised by June next year using naphtha fuel available at the plant. Phase one of the plant is expected to be synchronised in time to meet the peak summer demand next year. New plants at Paras and Ghatghar are also expected to add additional capacity of 450 mw to the state grid.

Patil also said that the Power Grid Corporation of India (PGCIL) has offered to invest Rs 4,400 crore in additional transmission lines in the state. A team of senior officials from PGCIL met the energy minister recently and made the investment proposal to enhance transmission capacity in the state over the next two years.

"PowerGrid has proposed to invest Rs 4,400 crore in transmission lines in the state over the next two years. We are working out the modalities of the proposed investment," Patil said.

He indicated that the priority would be to strengthen the state's east-west transmission corridor.

Currently, the power stations are located mostly on the eastern side of the state and power is transmitted to consumers in the western side over the state grid. This, said Patil, is one of the reasons for an unstable grid situation in the state.

He said that his ministry's first priority before the onset of summer would be to stabilise the grid and add extra transmission capacity so that power can be bought from other states to tide over the deficit.

The state currently faces a power deficit of 3,000 mw which is expected to go up 10,000 mw by 2010.