State against IPPs conversion to CPPs

OST Bureau

Bhubaneswar, Sep 28:

Independent Power Producers (IPPs) in the state will be discouraged from changing status of their power projects to Captive Power Plants (CPPs) as per the draft thermal power policy.

The Energy department in its comprehensive thermal power policy draft  has argued that conversion from IPP to CPP will deprive the state of a firm commitment on power supply and also cause loss to the environment management fund managed by the Forest department, sources said.

“In the draft comprehensive thermal power policy, we have discouraged conversion of IPP to CPP since it means losses in terms of availability of a firm power commitment ensured by the IPPs. Besides, the state will also be deprived of a green cess imposed on IPPs for power sold outside the state and also loss in electricity duty since CPPs currently enjoy exemption in duty as per the state Industrial Policy Resolution (IPR)”, said a departmental source.

The environment management fund mandates the IPPs to contribute six paise for every unit of power sold outside the state but the same stipulation does not apply to the CPPs.

Sources said, the conversion from CPP to IPP is allowed in the new draft policy subject to the prior approval of the Coal ministry.

The state government will have the first right of refusal for CPPs who sell their surplus power after meeting their captive requirement as per the provisions of the draft policy, sources added.