The Odisha Government has requested the Union Ministry of Power to extend a financial package to the power sector reeling under an unforeseen disaster, which will ultimately benefit the poor consumers and help maintain continuity of essential services.
Chief Secretary Asit Tripathy has said that COVID-19 disaster has caused severe concern and economic hardship to business communities and consumers across the country as well as in Odisha.
Tripathy has requested Union Secretary Power, Sanjeev Nandan Sahai saying the coal price can be reduced for this period linked to recovery of the operation cost only, deferring all capital expenses such as depreciation (loan repayment), interest payments and return on equity.
Similar concession in lignite and gas prices can be extended. Standard pricing of coal needs to be discontinued now and each coal company needs to declare their price based on their cost of production excluding the capital costs, Tripathy suggested.
Coal companies should be directed to discontinue charging any premium / incentive on bridge / flexi / long term linkage coal being availed for the year 2020-21 or at least for the next 6 months.
Necessary instruction may be issued to the coal companies and Railways to supply and transport coal without deposit of advance payment for coal cost and rail freight respectively for the year 2020-21 or at least for next 6 months.
Capacity charge/ fixed charges can be reduced by say 50 percent which can be worked out by deferment of their capital cost viz depreciation, interest cost and RoE.
This deferred cost be allowed to be recovered during the balance 5 year tariff period, i.e. in 2021-24 on case to case basis he suggested.
Deadline for installation of Flue-gas Desulphurization (FGD) plants be extended by at least two years, said.
Alternatively, all Renewable Energy power generators be given option to supply power at weighted average variable cost of power purchased from conventional sources of power during the month for this period, said he.