Financial Daily from THE HINDU group of publications
Tuesday, Mar 26, 2002
Industry & Economy
Naidu defends hike, targets captive plants
HYDERABAD, March 25
DEFENDING power tariff hike as an integral part of the rationalisation process and ongoing reforms in the power sector, the Andhra Pradesh Chief Minister, Mr N. Chandrababu Naidu, hinted at a move to levy duty and wheeling charges on captive generation plants.
Speaking to presspersons here on Monday, Mr Naidu said the modalities for levying duty on captive generation power plants was being worked out and would be announced shortly.
He said that certain short-term changes were necessary for long-term objectives and this marginal hike, which would fetch additional revenues of Rs 135 crore to APTransco, was necessary for the sector's welfare.
"While political parties are hell bent on garnering political mileage, we will continue to reform the sector and see that all sections of society are benefited from the reform process. The direct and indirect cross-subsidies will continue,'' he said.
This year, which is the third year of tariff order from the independent regulator, Mr Naidu said that the regulator's role had become more vital and its independence could be judged from the fact that APTransco demand was negated and the regulator directed Transco to mobilise additional funds of Rs 300 crore through internal efficiency.
In order to tackle the menace of theft and problem of recovery, Mr Naidu said APTransco would have no option but to provide for a pre-paid mechanism so that the habitual defaulters paid up in advance.
Most of the HT consumers had gradually established captive generation power projects in mid 1990s when the State was passing through tough times in the power sector. It is estimated that about 1800 MW is in captive generation.
With the Government having to contend with the problem of captive generation plants leading to lower revenue from HT consumers, it was now trying to lure them back by offering attractive tariffs on the one hand and making captive generation tougher.
While stating that the Government plans to offer 24 hours of power supply across the State from August 1, Mr Naidu said that a whole range of consumer-centric applications were under way.
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