NTPC cuts mean power cost by 13.6%

NTPC has cut average cost of generating electricity from coal by 13.6 per cent in the last three months by slashing coal imports, saving consumers Rs 300 crore a month. NTPC cut back on buying costlier imported coal as well as augmented domestic supplies to reduce fuel cost, chairman of the country's largest power generator A K Jha said. "The measures taken have reduced average energy charges by 13.6 per cent from Rs 2.06 per unit in September to Rs 1.78 in December," he said. This has led to lower per unit cost to consumers. "Cost of purchase by state DISCOMS is lower by Rs 300 crore per month," he said. Energy charges are nothing but cost of fuel used by a power company to generate electricity. On top of this is added a fixed cost which is essentially the cost of building the system, to arrive at a final charge for buyer. NTPC has also rationalised coal supplies by moving coal from the nearest mine to a generation station rather than sourcing the fuel from the mine the unit is tied up with. This brought down freight charges, he said. Jha said the company this fiscal cut coal imports by 30 per cent to 8.6 million tons from 12.3 million tons a year ago. Also coal procured from e-auction has also been cut by 64 per cent to 0.865 million tons. Reserve price for e-auction was 20 per cent above the notified price as compared to 40 per cent above notified price in 2014, helping cut costs, he said. Average energy charges in September 2015 was Rs 2.06 per unit which was brought down to Rs 1.90 in October. This further fell by 10 paise in November and to Rs 1.78 per unit in December, he said.