Coal price hike will push up power tariff

Soon, your electricity bill is going to cost you a wee bit more. Coal India Limited (CIL), which supplies coal to power generators in the state, has announced a 12 to 15% rise in prices of coal.

Generation costs will go up at thermal power stations, which in turn will lead to an eight paise (estimated) per unit hike in tariff. It will be reflected in the fuel adjustment charges (FAC) column in your bill.

Nearly 80% of the power generation by the Maharashtra State Power Generation Company Limited (Mahagenco) is coal-based. Private generators, like Tata Power and Reliance Infrastructure, are mostly dependent on thermal generation.

It will be for the Maharashtra Electricity Regulatory Commission (Merc) to ascertain the increase in power generation costs. However, although the price of coal will rise by 12-15%, the overall expenditures by the state power generators are expected to go up by
4% at the most.

Every power generator does not use the same coal mixture — some use indigenous coal, others the imported variety. Hence, it will take the power utilities some time to decide on the exact hike in tariff. But industry sources said that whatever be the extra expenses, 100% of it will be recovered from the consumers.