Resulting in an increase of Nu 482.1M in revenue
The export price of Chukha’s power has been revised by 30 Cheltrum a unit, following a meeting between Lyonchhen Tshering Tobgay and Indian Prime Minister Narendra Modi on the sidelines of the Advantage Assam Investors Summit in Guwahati on February 3.
The revision from Nu 2.25 a unit to Nu 2.55 will be applied retroactively from January 1, 2017.
With the 30 Cheltrum increase, the 336MW Chukha hydropower project would earn Nu 4.09B from its export earnings in 2017, which amounts to Nu 482.1M in extra revenue. “This will greatly help the government improve its fiscal position and Indian rupee reserve,” a press release from the office of the Prime Minister stated. In 2014, the Chukha power tariff was revised by 25 Cheltrum to Nu 2.25 a unit.
Chukha exports around 1,800 million units of power to India every year. An increase of one Cheltrum in the export rate will fetch additional revenue of around INR 16M annually.
According to the press release, Lyonchhen highlighted that this special gesture is particularly significant as Bhutan and India commemorate 50 years of formal diplomatic relations this year. “CHP is an iconic power project that heralded the beginning of a successful and mutually beneficial partnership between India and Bhutan in the hydropower sector,” the Prime Minister said.
Should the two governments follow the bilateral agreement, which spelt out that the revision would be made after every four years, the revision in Chukha’s export tariff was already due in 2009. However, prior to that, the revision did not adhere to the agreement and, most often, it was revised before four years.
The tariff in this way was revised around seven times, since the commissioning. It was first sold at Rs 0.19 a unit in 1989 when the project was commissioned. Chukha hydropower project is the oldest project commissioned sometime in 1988. It was built on a 60 percent loan and 40 percent grant. The entire loan component has been repaid fully since 2007.
While some critics claim that average power tariff in India is between Nu 6 a unit, the selling price as postulated in form IV of the power trading company, (PTC) India states otherwise.
PTC is the leading provider of power trading solutions in India, established in 1999 as Government of India initiated Public-Private Partnership, whose primary focus is to develop a commercially vibrant power market in the country. It is the power exchange of India and form IV explains that power bought and sold by the company from each source including the Chukha and Tala.
The PTC form IV of December 2017 reveals that power from Chukha was sold by PTC at Rs 2.29 a unit. In the earlier export tariff, PTC would keep Rs 0.04 for wheeling and other charges. If the revision is effective from January 2017, PTC will have to forego Rs 0.01 excluding the wheeling charges. The power from Chukha is sold in West Bengal, Orissa, Sikkim, Jarkhand and Bihar.
However, the same form states that power from Tala is sold at Nu 2.16 in India by PTC while the export tariff is Nu 1.98. Supplementing the Chukha power supply, power from Tala is sold in Harayana, Delhi, Jammu and Kashmir, Punjab and Rajasthan.
Power from West Bengal and Madyapradesh is sold to Bangladesh at Rs 4.7 and 3.5 a unit respectively.