Thursday, 12 Jan 2012
Electricity bill could go up by 50 to 60 paise a unit as early as February, triggered by the recent increase in coal prices. Currently, the average cost of power is INR 3 to INR 4 a unit. The average realisation for NTPC in the September quarter was INR 3.3 a unit, up from INR 2.66 last year.
Effective January 1, Coal India switched from the useful heat value based coal grading system to gross calorific value system for pricing coal. This move has not gone down well with power producers, as this will push up the fuel cost. The producers have been raising the issue with the fuel suppliers. Though suppliers claim that migration from the UHV to GCV based system will be revenue neutral, those tracking the sector said that in reality there will be a big increase in pricing without any value addition.
Power generating companies typically use grade E and F coal. The basic price of grade E coal will be INR 880 to INR 1,781 a tonne against INR 730 to INR 1,090 under the old pricing system (data based on ‘Final offer document' of Coal India). For grade F coal, the price will be INR 630 to INR 933 against INR 570 to INR 870 earlier.
Sources privy to the developments told Business Line that utilities have raised the issue with Coal India, which has assured them that if the consumer price gets affected beyond a point, say, higher than 10%, then the mechanism can always be reviewed.
(Sourced from BL)
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