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Our Bureau

Hyderabad , June 24

THE Chief Minister, Dr Y.S. Rajashekhara Reddy, has complimented the Centre for agreeing to the State proposal to refer coal price to the Tariff Commission.

The State now plans to seek the Centre's support for additional gas allocation for power projects.

After a review meeting of the power sector on Friday, Dr Reddy, who is set to attend the inter-State Council meet later this month, would request the Prime Minister to initiate steps to ensure availability of natural gas as per agreements made with GAIL for all the four sanctioned independent power producers (IPPs) in the State.

GVK, Konaseema, Vemagiri and Gauthami, with a total installed capacity of 1500 MW, need natural gas supply. Any failure to ensure gas supplies to these projects would mean an additional burden of Rs 1,000 crore per annum towards fixed charges, without a single unit of power being generated and supplied.

As per the terms and conditions agreed to with these gas stations, the Government will have to shell out money even if they were idle.

According to a press release from Dr Reddy's office, following AP's request to the PM, the Government has agreed to create a mechanism to regulate coal pricing, which has a huge bearing on the cost of power generation in the State.

About 60 per cent of the power generated in AP is through coal.

The Centre has conveyed its decision to refer the coal pricing to the Tariff Commission, which is expected to harmonise the interests of consumers and producers and arrive at an appropriate pricing structure.

Following Coal India's decision to hike coal prices last year, AP Transco had to bear additional burden of Rs 128 crore. The State believes rationalisation will be in its favour.

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