Power Ministry to take up gas pooling issue to Cabinet panel

In order to prevent gas-starved power capacities from becoming non-performing assets (NPAs), the Power Ministry would approach the Prime Minister-headed Cabinet Committee on Investments (CCI) to consider gas price pooling mechanism.

Last week, the issue was discussed by Principal Secretary to Prime Minister Pulok Chatterjee along with Power Secretary P. Uma Shankar and Petroleum Secretary Vivek Rae.

“The Power Ministry would take to CCI the availability versus demand of gas, the current arrangements in the supply and implications of pooling for the economy and individual power producer,” said a Government official privy to the issue.

The Ministry is looking to take the matter to the Cabinet panel as early as end-April. The draft note for consultations with stakeholders would be floated shortly, the official added.

However, the Power Ministry would not like to see pooling mechanism as a long-term mechanism, he added. The proposals would cover 2013-14, 2014-15 and 2015-16.

Jyotiraditya Madhavrao Scindia, Minister of State (Independent Charge) for Power, told Business Line recently, “I am discussing with my officials to put together a policy for these stranded plants. We are evolving that on a daily basis.”

The gas price pooling idea is not new. But, the Government is looking to revive the proposal as additional infrastructure to import 21 mmscmd of more natural gas is expected to be added in 2013-14.

State electricity distribution companies find it difficult to buy power generated from imported gas because it is expensive. Mixing imported with domestic gas may help bring down generation costs.

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