The government’s failure to secure a price revision on power supplies to Nepal has led to Bihar and Uttar Pradesh underwriting a subsidy topping 55% on every unit of power.
The current situation has arisen because the government has not been able to commission a meeting of the Indo-Nepal Power Exchange Committee.
The Nepal Electricity Authority (NEA) buys power from Bihar and Uttar Pradesh. While Nepal has been receiving around 80 megawatt (MW) of power from India through Bihar and UP, the power supplied is at rates as low as Rs3-3.15 per unit. This is at a time when the cost of procurement of power in India in the present situation of scarcity is around Rs7 per unit.
Given the power scarcity in the state in particular, and the country in general, Bihar wants the price to be increased as the majority of the power supplied to Nepal is by Bihar State Electricity Board. “Bihar supplies around 50-70MW during peak hours and the major load centres are in the state,” a senior official of a power utility, who did not wish to be identified, said. While Bihar is facing an 8.3% shortage of power, UP is facing a deficit of around 13%.
At the end of February, the Central Electricity Authority reported that the country is facing a power shortage of around 6,390 million units, a deficit of around 12%.
“This low tariff has continued in the long absence of a meeting of the Indo-Nepal Power Exchange Committee, which was set up for fixing power themselves. While these states itself are facing a scarcity situation they have to supply power to Nepal at a low tariff,” the official added.
The Indo-Nepal Power Exchange Committee is headed by a representative of India’s Central Electricity Authority and has representatives of the states of Bihar and Uttar Pradesh, ministry of external affairs and NEA among others. NEA wants an additional 50-100MW from India over and above what it is presently receiving from India.
This can only be achieved through the construction of 220 KV transmission links to be jointly built by Power Grid Corporation of India Ltd, NEA and IL&FS as the existing transmission links to Nepal do not have the capacity to carry heavy load. Even PTC India Ltd, India’s leading power trading company, is considering a stake in the construction of the transmission link which will be located in India.