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Home News Power Sector News CESC seeks 11% tariff rise to offset coal price hike

CESC seeks 11% tariff rise to offset coal price hike

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CoalCESC Ltd, the RPG group power utility, has asked the West Bengal electricity regulator for about 11% hike in its tariff to neutralise the impact of recent increase of coal prices by Coal India.The company has suffered a hit of around Rs250 crore due to the 30% hike in coal prices by Coal India, and the company would continue to suffer the impact till West Bengal Electricity Regulatory Commission approves its tariff revision request, Sanjiv Goenka, vice-chairman of CESC, said.

"We have asked for a raise of 40-50 paise per unit while our average tariff is Rs4.50 a unit," Goenka said while announcing the fourth quarter results of the company.

Terming Coal India's price rise as "horrific", Goenka said he has been rattled by "arbitrary hike by the monopolistic producer".

Coal India on February 27 increased prices of A and B grade coal 150% while prices for grade C and below were raised 30%.

"There is a need for some kind of discussion with stakeholders and also some kind of prior notice of an impending hike of coal prices by such magnitude," he said.

In a bid to reduce dependence on Coal India, which currently meets 60% of its coal requirement, CESC, Goenka said, would be bidding aggressively in coal block auctions by the central government, expected this year.

To secure overseas supply of coal, CESC earlier signed a deal with Resource Generation Ltd of Australia for supply of 37 million tonnes of coal over 20 years from its Boikarabelo mine in South Africa.

The shipment would start from 2012-13, Goenka said on Friday.
CESC has reported a 12% growth in its bottomline during January-March at Rs112 crore, up from Rs100 crore a year ago on the back of similar growth in net sales at Rs844 crore.

On CESC's plan to divest close to 20% stake in Haldia Energy, a subsidiary that is executing three power projects, Goenka said talks are at advance stage with private equity players and he expects to seal the deal by July.

Haldia Energy is implementing the 600 mw project at Haldia in West Bengal and will also be the holding company for two more projects; 1,320mw capacity in Orissa and 600 mw in Maharashtra.

On Spencer's, CESC's retail chain, Goenka said its operations are likely to break even after about 18-21 months. "This however is contingent upon adding trading areas, which, in turn, is dependent upon developers completing their projects on time," Goenka said.

CESC has been in talks with private equity (PE) players to divest stake in its retail arm to fund its expansion plans. "We came close to sealing a deal with a PE player about a fortnight back but then the talks failed," Goenka said.

Source- DNA

 

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