Maharashtra to buy Dabhol power at Rs5.01 per unit

Mumbai: The Maharashtra government has agreed to buy electricity from the Ratnagiri Gas and Power Private Ltd, the new owner of the Dabhol power project, at Rs5.01 per unit, in view of the massive power shortage in the state. The beleaguered power project at Dabhol, Maharashtra will be restarted by the middle of November and the Maharashtra State Electricity Distribution Company will soon sign an agreement for this purpose.

The Rs5.01 unit cost of power comprises a capacity charge of Rs4.71 and incidental charges of Rs0.30, the two sides informed the Central Electricity Regulatory Commission. The agreement also includes a price escalation clause under which the additional cost of generation would be passed on to the consumer. The state would buy power even if the tariff crosses Rs5.50 per unit.

The state power utility is expected to buy up to 700 megawatt of power from Block-II of the plant, which will be run on imported naphtha. RGPPL officials told CERC that Indian Oil Corporation will import naphtha within "four weeks" and Block-II, which was shut down in July this year after being operational for two months during May-June, would generate electricity from the middle of next month till March-end 2007.

IOC would have to import 380,000 tonnes of naphtha for RGPPL to operate the 740 MW Block-II for five months till March next year.