12 pc power of a plant given to host state free: Centre

NEW DELHI: As much as 12 per cent of electricity generated in a power project is given to the host state free of cost and the government has no plan to change the rules, Power Minister Piyush Goyal said today.

When a power plant is set up in a state, the state government provides land and other logistics to facilitate its successful installation. "Host state of a power plant will continue to get 12 per cent free power," Goyal said in Lok Sabha during Question Hour.

The Minister said the proposal for flexibility in utilisation of domestic coal to reduce the cost of power generation has been approved by the Union Cabinet.

This will allow flexibility in utilisation of coal like use of coal aggregated with the states in their own generating stations, use of coal aggregated with the one state in generating stations of other state's utilities, use of coal aggregated with state in central generating stations and vice versa.

Goyal said as per the methodology, state governments can divert their coal and take equivalent power from Independent Power Producer ( IPP) generating stations selected from the competing IPPs through an e-bidding process.

"The guiding principle of the methodology is that the landed cost of power from IPP generating station at the state's periphery should be lower than the variable cost of generation of the state generating station whose power is to be replaced by generation from IPP," he said