Center not to give free power to power generating states

New Delhi: The center is unlikely to accede to the demands made by Orissa, Jharkhand and Chhattisgarh for free power. These states have demanded that they receive a portion of the power they generate in the state free of cost, just as states producing hydroelectricity do.

The ministry of power has told these states that they can''t stand in the way of the nation''s progress by asking for compensation.

The chief ministers of these three states met Prime Minister Manmohan Singh in December last year regarding their strategy for capacity addition. They argued that as in the case of states with hydel power potential, they should also receive a portion of the power produced in their state free of cost to compensate for the environmental costs of the power projects.

The ministry of power said though it accepted that their issue of environmmental impact is legitimate, and is being addressed through environmental policy governing coal mines and power plants but the ministry said it felt that a claim of free power on the grounds that hydro-rich states are given 12 per cent free power is not appropriate. The reason being that the distress and dislocation in the case of hydro power projects is much more severe compared to thermal power projects.

More importantly, the hydro-rich states do not receive any royalty for fuel. Besides which any initiative to give free power or power at variable cost from new thermal power plants would give rise to a similar demand from exisiting plants. This would mean a claim that covers as much as 70,000 mw of generating capacities.