Is Akhilesh favouring private companies at the cost of power consumers?

LUCKNOW: UP Power Corporation Limited allowing Reliance and Bajaj to import coal for power generation and justify the higher price of power they have proposed to supply the state in 2014-15, has raised concerns over Akhilesh Yadav government favouring private companies at the cost of power consumers.

On September 11, the UP Electricity Regulatory Commission (UPERC) sent out a reminder to UPPCL asking the utility about the very basis of high price of power the two companies have proposed to supply in 2014-15.

According to the annual revenue requirement (ARR) report of UPPCL, while Reliance has proposed to supply power at the rate of Rs 6.06 per unit, Bajaj has proposed to do it at Rs 7.75 per unit. The regulator had asked the corporation to give its reply within three days — that is by September 14.

The corporation, however, chose to sit over the note. And on Friday, the UP government gave its approval to the two companies to import coal, citing the impending coal crisis. Reliance, for example, has been allowed to import 5.5 lakh tonnes of coal. Its power plant in Rosa in Shahjahanpur district require 49 lakh tonnes of coal. This way, Reliance will be fulfilling 12% of its requirement through imported coal.

Experts point out that the price of imported coal is almost three times the cost of indigenous coal. While the indigenous coal is available at the cost of Rs 2000 per tonne, imported coal comes at a cost of Rs 6000 per tonne.

READ ALSO: UP allows 2 private power companies to import coal

Mulayam Singh Yadav (left) with Reliance Power chairman Anil Ambani during Akhilesh Yadav's oath-taking ceremony as UP's chief minister in Lucknow, on March 15, 2012. (TOI file photo by Manoj Chhabra)

Significantly, the two power plants have been set up under the memorandum of understanding (MoU) route where in the cost of power is passed on to the utility — the UPPCL in this case. While principal secretary (energy) Sanjay Agarwal was not available for comments, UPPCL managing director, AP Mishra confirmed that the cost will be borne by the UPPCL. He, however, refused to comment if the cost would be passed on to the consumer.

Akhilesh Yadav, chief minister of Uttar Pradesh. (TOI file photo by Pawan Kumar)

Chairman of All India Power Engineer Federation, Shailendra Dubey questioned as to why the same permission was not given to other power plants which are also facing the coal crisis. "Both these companies have coal linkages and still they have been allowed to import coal. Why it is done only for the power plants which are set under the MoU route? This way the two companies will be able to justify the high cost of power they would be providing," he alleged.

READ ALSO: Sparks fly between UPPERC, PCL over proposed tariff hike

Dubey pointed out that even the comptroller and auditor general (CAG) in its report had estimated a loss of over Rs 8000 crores for purchase of power from the two companies for UPPCL.

http://timesofindia.indiatimes.com/followceleb.cms?alias=UP Electricity Regulatory Commission,Power Corporation Limited,Akhilesh Yadav government,Akhilesh Yadav

Stay updated on the go with The Times of India's mobile apps. Click here to download it for your device.