Power tariff set to rise as state looks to import coal

The Telangana strife, which has brought back load shedding to the city, is now likely to prove heavy on your wallet as well. Faced with a shortage of coal for power generation, the state government now plans to import costly foreign coal, and this is bound to increase your electricity bills

Officials from the Maharashtra State Power Generation Company Ltd (MAHAGENCO) revealed that coal would have to be imported in the coming months, leading to an increase in power bills. The hike in tariff is primarily because the state's electricity distribution arm, the Maharashtra State Electricity Distribution Company Ltd (MSEDCL), will have to pay more to MAHAGENCO for procuring power.

Officials admitted that the additional expenditure would have to be passed on to consumers. To procure coal, MAHAGENCO has invited global tenders and is on the verge of signing contracts with other companies. The process is likely to be completed in a few months.

Imported coal is superior to Indian coal in terms of quality and calorific value, which also has a bearing on power generation. While Indian coal costs Rs 1,600 to Rs 2,000 per tonne, imported coal costs around
Rs 6,000 to Rs 7,000 per tonne, which will mean a hike of at least 4 per cent in the electricity tariff.

According to a MAHAGENCO official, the company earlier used 10 per cent imported coal in its power plants, but this might now be increased to 20 to 30 per cent. "Around 80 per cent of the costs charged by us to MAHADISCOM are fuel costs, since that is the most important component in power generation," said the official.
A senior MAHADISCOM official from Mumbai admitted that the tariff would have to be increased, but said determining the increased tariff would be premature at this stage.

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