Tuesday, October 10, 2006

12 pc free power... Is it really free?

this is in continuation to my earlier post titled "Hydroelectricity at Arunachal Pradesh-I"

"Apang seeks more than 12% free power from center"-The Arunachal Times dated 22-09-2006, citing the free power to the tune of 19% that has been promised by Independant Power Producers (IPP) - the request though, was politely turned down by Power Ministry citing Central Government Norms. Now let's see what does this Central Government Norms says.

According to to this norm 12% of the hydro power generated in a state is to be provided free to the host government. In case of projects having unviable tariffs in the initial years, the 12% free power to the home state can be staggered in a manner such that it is kept low in the initial years and higher in the latter years so as to average 12% over the life of the project.

Now as per the norms, the Center couldn't have provided free power more than 12 % as sought by the Chief Minister. But, is it really a free power?

I had been told that this 12% free power given to the host government where hydro-electric project is developed, is actually a
water royalty - water being state subject. Now, what's Royalty? According to Merriam-Webster online dictionary Royalty is ~
  1. a right or perquisite of a sovereign (as a percentage paid to the crown of gold or silver taken from mines)
  2. a share of the product or profit reserved by the grantor especially of an oil or mining lease.
  3. a payment to an author or composer for each copy of a work sold or to an inventor for each item sold under a patent.
If we go by the definition, this 12% power should have been right/share of the state as it is the percentage that has to be paid to the State Government in lieu of profit made out of utilisation of water resource (read mine in the definition) of the State.

If it is the case, then where is the question of free power being given to the state? Isn't it a misnomer? Is the term "free" technically correct? Shouldn't we use the term '
power share of the state' instead of 'free power to the state'?


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