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Public hearing on thermal power plant soon

Special Correspondent
The Hindu
23 Feb 2007

"The plant will use coal, which will be procured from Indonesia or Australia"

CHENNAI: A public hearing on the proposed 1,320-megawatt thermal power plant to be set up by a private promoter in Cuddalore will be held shortly.

A Tamil Nadu Electricity Regulatory Commission (TNERC) press release here on Friday said Cuddalore Power Company Limited had requested the Commission to approve the power purchase agreement signed by the company with the Tamil Nadu Electricity Board for sale of power from its Rs. 6,004-crore plant.

On Friday, the promoter made a presentation before the members of the State Advisory Committee of the TNERC.

The members raised issues regarding cost of power, necessity of the project, environmental impact and the applicability of the National Tariff Policy.

The plant will use imported coal, according to an official. The promoter has informed TNEB authorities that coal will be procured from Indonesia or Australia. The tariff, which will be in force for 30 years, is Rs. 2.30 per unit, of which the variable cost will be Rs. 1.10 per unit. The authorities have slapped a ceiling on the total fixed cost for the project at Rs. 604 crore.

Recalling that the project was planned 12 years ago, the official said the promoter signed the final power purchase agreement with the TNEB on September 28 last year. The next day, the promoter approached the TNERC for approval of the PPA. The initial PPA was signed in 1994.

Though the Electricity Act and the Tariff Policy provide for determination of tariff through bidding process, the official explained that the Union Power Ministry, in March 2006, issued an order allowing power projects mooted through the MoU route, if they had reached the stage of financial appraisal with banks in January 2006 or earlier, and their promoters would conclude final PPAs with the Electricity Boards or distribution licensees by the end of September 2006.

The Cuddalore Power Company has fulfilled these conditions. For the TNEB, the cost of power is cheaper. This is why the Board gave its consent to the project, the official added.

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