Opinion: Fuel Costs Must Pass Through In Power

Opinion: Fuel Costs Must Pass Through In Power

There is needless uncertainty over tariff revision for coastal power plants using unexpectedly dearer imported coal, when it ought to be par for the course to treat fuel as “pass-through” costs, with price bidding confined to non-fuel parameters.

It is welcome that the Supreme Court has now called for a tariff review for the concerned Adani, Tata and Essar Power plants, but most unfortunate that the issue has been dragging on from 2010, following changed rules for Indonesia coal prices.

Given their parlous finances and long year of politically mandated giveaways and patronage of theft, state power utilities seem unable to compromise and duly seek revised tariffs for the competitively bid projects. Reports say the revised fuel prices are likely to be a small fraction of the total per-unit power prices for the state utilities. Read more

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