Date:30/10/2008 URL: http://www.thehindu.com/2008/10/30/stories/2008103060220400.htm

Andhra Pradesh - Hyderabad

Power purchase price for bio-mass units hiked

Special Correspondent

Rate increased from Rs 3.15 to Rs 3.79 per unit for one year

Rs. 81.72 crore additional burden on consumers
The issue will be placed before APERC for approval

HYDERABAD: The government has enhanced the power procurement price from Rs 3.15 to Rs 3.79 per unit for one year in the case of bio-mass projects which have a combined capacity of about 200 MW in the State.

The date from which the new price will be paid to AP Transco and distribution companies to these non-conventional energy units will be finalised in a couple of days. The decision to hike the price by 64 paise a unit comes at a time when the developers of bio-mass units, indeed, are demanding Rs 5 per unit.

The hike will place an additional burden of Rs 81.72 crore on consumers.

This has been calculated on the basis of the tariff order issued by the Andhra Pradesh Electricity Regulatory Commission for 2007-08, asking power utilities to purchase at least 1,299 million units of power from the bio-mass units.

The government increased the price for bio-mass units by invoking some provisions of the Electricity Act of 2003 under which it can issue “policy directives” to the APERC but subject to the condition that it releases subsidy to the power utilities to the extent extra burden is placed on consumers.

Energy Minister Mohd Ali Shabbir told The Hindu that the matter of enhanced price for bio-mass plants would naturally go before the APERC for approval.