Hyderabad: Finance minister Arun Jaitley increased the ‘clean environment cess’ on coal from Rs 200 per tonne to Rs 400 in the Union Budget.
This will have a direct impact on the power tariff. Telangana and Andhra Pradesh which are heavily dependent on coal-fired power plants, will have to pay an additional Rs 1,400 crore due to doubling of cess on coal.
Experts said this additional burden should be borne by the governments in the form of subsidy extended to the distribution companies. Otherwise, the discoms will have to pass the burden on to the consumers with a hike in tariff. “At some point of time the state governments have to come to the rescue of discoms which purchased power at higher rates from private producers to fulfill the 24x7 power supply commitment of the government to the people,” M Venugopal of Centre for Power development said.
Officials said almost the entire power being supplied in Telangana state is from thermal power plants. An increase in the coal cost would push the TS power distribution companies into further financial trouble. The two TS discoms are in the red for Rs 15,000 crore and have requested the government to share some of it under Ujwal Discoms Assurance Yojana. Under the scheme, 75 per cent of the burden of the discoms would be serviced by the state government.
A senior official in TS Energy department said the TSGenco needs 13 million tonnes of coal per annum and the Rs 400 cess would mean that it would have to pay an an additional Rs 260 crore. All the power that TS discoms purchase from private producers is thermal energy, and the additional cess works out to Rs 700 crore. The revenue deficit of AP discoms stands at Rs 5,148 crore and they have submitted their annual revenue requirement to the AP Electricity Regulatory Commission, and public hearings are going on. AP energy secretary Ajay Jain said it is up to the commission to decide whether the Rs 700-crore burden should be passed on to consumers in the form of a tariff hike.
