New Delhi, January 6
The Union Cabinet today approved a new policy for allocation of power to be generated by upcoming state-run thermal power plants, earmarking 50 per cent to the ‘home’ states, while also fixing an overall target generation capacity of one lakh MW for the 12th Five Year Plan (2012-17).

In another decision, the Cabinet also approved the proposal of the Ministry of Power to amend some parts of the tariff policy.

A statement issued after the meeting said: “The proposal is for allocation of 50 per cent power to 'home' states, where the projects are located, 35 per cent to the other constituents of the region and 15 per cent as unallocated power at the disposal of the Centre.”

The proposal pertains to 14 power projects - Gadarwara, Lara, Talcher Expansion, Kudgi, Darlipalli, Gajmara, Barethi, Gidderbaha, Katwa, Dhuvran, Khargone, Pudimadka, Bilhaur and Kathua - of National Thermal Power Corporation (NTPC) coming up during 12th and 13th Plan and all thermal plants of central public sector undertakings, an official statement said.

At present, the power is shared as per Gadgil formula, which provides for 10 per cent power as preferential allocation to home state, reserves 75 per cent for constituent states, including home state, and retains the rest at Centre's disposal.

Under the rule, central power generating stations at present can provide a maximum of 33.3 per cent of the electricity to the home state.

"Enhancement of allocation to 50 per cent to the home states is the only new element in the present proposal," the statement said. NTPC's Barethi project, in the Bundelkhand region of Madhya Pradesh, is expected to spur development of infrastructure in the region, it added.

The government has also approved setting a power generation capacity target of one lakh MW for the 12th Five Year plan. The Cabinet also approved the proposal of the Power Ministry to amend some parts of the tariff policy, which provides for non-conventional sources of energy generation, including co-generation.

The tariff policy was notified by the Central Government on January 6, 2006, and was subsequently amended in 2008. The present amendment in the tariff policy is as per the proposal of the National Solar Mission strategy (Implementation of the National Solar Mission) which was approved by the Cabinet in its meeting held on November 19, 2009.