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States' offer totally unrealistic, says DPC

US energy major Enron's Dabhol Power Company said on Friday that price proposals made by four states to draw power from Dabhol project 'were totally unrealistic', even as the Godbole renegotiations committee reported a stalemate in the talks with DPC.

Referring to the offer made by Karnataka, Delhi, Madhya Pradesh and Punjab to buy power at a tariff as low as Rs 1.65 and Rs 2.60, DPC said, "unfortunately these are totally unrealistic proposals, unattainable by new generation liquid plants, including those set up by the public sector".

On the other hand, after meeting DPC officials on Friday morning, Madhav Godbole told reporters that currently talks with DPC had reached a stalemate with interested states quoting lower prices than the US energy major's expectation.

After discussions with four states and receiving communications from Haryana and Rajasthan, he said, all these were ready to draw DPC's 1,444 mw phase-II power at an average rate of Rs 2.00 to Rs 2.25 per unit.

"An overall demand for DPC power is at around 800 mw to 1,000 mw, but not all of these is a base load one. Moreover, it is for more than half a year, mainly non-monsoon months of November to May," Godbole said.

He said that the states had informed the commission that each of them had a regulatory framework in the form of an electricity regulatory authority in place and was bound by a merit dispatch order, which did not allow them to buy costly power (like DPC's) so long as cheaper tariff was available in their own state.

The states have stated their readiness to draw power at not more than Rs 2.25 per unit, while charges for wheeling the power to other states up to Maharashtra border should be borne by the home state itself, Godbole added.

He said the states had made it abundantly clear that there was certainly a demand for DPC's power but "only at a particular price. The higher the price, the lower the demand".

Hinting at the Centre's recent announcements that India needs more than 10,000 mw to meet its requirements in the power sector, the former Union home secretary said: "A serious look needs to be taken at the demand projections made lately in the country."

"The question now arises whether so many power projects, independent or public, should be encouraged to set up shop in the country," Godbole said, adding that there was already an idle power project lying in Maharashtra, whose capacity should be utilised first.

He said the committee's dialogue with DPC was getting bogged down due to two main reasons --the rate at which DPC wants to sell its power only on a 90 per cent plant load factor and that Maharashtra did not have enough demand for the same.

"At the outset, Maharashtra could draw 200 mw to 300 mw power that too after the monsoon," Godbole said.

The Godbole committee chairman admitted that there were several 'difficult problems' for solving on-going stalemate between the US energy major and Maharashtra State Electricity Board over payment of $45 million towards dues.

However, he said renegotiations would continue and that the committee would meet DPC in August-end.

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