NTPC suggests Telangana can use power from Dabhol power plant

To help the cash-strapped Ratnagiri Gas and Power Pvt. Ltd (RGPPL) tide over the tough times, state-run NTPC Ltd, which owns 32.86% stake in the utility, has proposed that electricity generated from the Dabhol power plant be made a part of the Telangana package.
NTPC, which has invested Rs.974.31 crore in RGPPL, has communicated the proposal to the power ministry. The other stakeholders in RGPPL are GAIL (India) Ltd, which also owns 32.86% in the utility, the Maharashtra government with a 17.41% stake, and state-run banks and financial institutions.
“The project is lying idle. We want Dabhol to be pitched for as a part of the Telangana package. It will take around four years to build a new power project to cater to the demands of Telangana,” said an NTPC executive requesting anonymity. “In such a scenario, it makes sense to leverage a capacity which is lying idle.”In its letter to the power ministry, NTPC has said that since its investment in RGPPL is going to be a non-performing asset (NPA), it will affect its market reputation as it is a publicly traded company.

One of the two options proposed by the utility is to run the project on imported liquefied natural gas (LNG) and be dedicated to Telangana to meet its electricity demand; wherein the subsidy portion on account of difference between the domestic gas cost and imported LNG be provided under the package.According to the power-purchase agreement between RGPPL and Maharashtra State Electricity Distribution Co. Ltd (MSEDCL), in the event of LNG being used as a fuel, MSEDCL has to approve it. With LNG being expensive than domestic fuel, and the uncertainty over the availability of fuel in India, MSEDCL is averse to buying expensive electricity. According to RGPPL, MSEDCL owes it Rs.1,112 crore in electricity dues.

“With no new gas coming, NTPC wants to give power to Telangana as part of the package,” said the power ministry official cited above. President Pranab Mukherjee has given time to the Andhra Pradesh assembly to return the AP Reorganization Bill till 23 January.