Power cost to jump to Rs 6-6.25 per unit

Our Bureau

New Delhi, Sept. 15

Ratnagiri Gas and Power Pvt Ltd (RGPPL), the new owner of the Dabhol power project would restart production at the 740-megawatt first phase of the station in October using imported naphtha to meet electricity demand in Maharashtra.

The cost of power would, however, jump to about Rs 6-6.25 per unit from Rs 4.25 earlier.

"The Dabhol plant will be restarted from next month. Maharashtra has said that they will require electricity from the plant," the Union Power Minister, Mr Sushilkumar Shinde, told reporters on the sidelines of a power conference here.

Mr Shinde said the plant would again be operated on naphtha as natural gas supplies were expected to be firmed up only in March next year.

Higher price

The Power Secretary, Mr R.V. Shahi, later said the cost of power from the plant will be in the range of Rs 6-6.25 a unit.

The company has already approached the power regulator for tariff approval, he said, adding that RGPPL would import naphtha for resuming generation through Indian Oil Corporation.

RGPPL has also decided to delay the commissioning of two remaining units, with a total capacity of 1,400 MW, from the earlier schedule of December this year to March 2007 to match the arrival of liquefied natural gas.

The second block of the project generated electricity on naphtha for two months in May-June this year after a five-year gap.

The block was shut down on July 4 after demand dropped in the State following the onset of monsoons in the region.

The Centre had earlier granted a customs duty waiver to both LNG and naphtha imports for the Dabhol power plant to make the two fuels cheaper by about 5 per cent.

(This article was published in the Business Line print edition dated September 16, 2006)
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