The Hindu Business Line : Ratnagiri Gas wants higher price for power from Dabhol

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Mumbai Jan. 29 Supplying power below Rs 2.80 per unit will not be feasible for Dabhol plant even if it is given gas at subsidised rates, a senior official of Ratnagiri Gas and Power, the company, which runs the plant, said.

Maharashtra State Electricity Distribution Company and the Ratnagiri Gas and Power are currently negotiating the price for power to be supplied from April 1, when the plant is likely to be run on LNG.

The State power distribution company has offered to buy power at Rs 2.30 per unit from April. This is much lower than the minimum price being sought by Ratnagiri Gas.

The State Government officials said that they would start negotiation on the price shortly.

On Naphtha

Under the current short-term arrangement, which is valid till March end, the state distribution company is buying power from Ratnagiri Gas at Rs 5.01 per unit. Currently, the plant is run on naphtha.

An empowered group of Ministers is reported to have recommended supply of gas at the subsidised rate of $5.75 per mbbtu for Dabhol plant from April. Per unit cost of power from LNG-run plant is much cheaper than naphtha, which is the fuel of Dabhol plant.

A senior official of Ratnagiri Gas said that the price of Rs 2.30 for per unit was not feasible. A more realistic price was Rs 2.80 provided the Union Government is able to get to procure LNG at highly subsided rates, officials said.

Though a consensus on the price is yet to be reached, a draft power purchase agreement for 25 years is being drafted between the two companies. Government officials said that the agreement has a provision for reviewing per unit cost after a period of 15 years. Once the price is finalised the distribution utility will approach Maharashtra cabinet for formal clearance, they said.

Load-shedding

As the summer approaches, Maharashtra is likely to face record load-shedding of over 8000 MW. Hectic negotiations are under way at the Maharashtra Secretariat to get power for various power across the country. The distribution company is keen to buy power from Ratnagiri Gas.

The LNG for the plant would be fed from the upcoming GAIL's Dahej-Dabhol pipeline.

The pipeline has been facing opposition from farmers of Thane district, as they are demanding higher compensation for laying the pipeline through their land.

The State Government has pledged full support for the pipeline.

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