Despite opposition, 133 power projects register for water cess

Pratibha Chauhan

Shimla, June 17

As many as 133 of the 172 hydroelectric projects in the state have registered themselves with the Jal Shakti Department for the payment of water cess. This has happened despite the directions of the Central Government to the power producers to challenge the imposition of cess by the Himachal Government

Rs 2K cr revenue likely

• 172 hydroelectric projects in Himachal will be charged the cess from April 1, 2023
• The state government hopes to generate at least Rs 2,000 crore annually from it

The power companies, which have registered for the water cess, include National Hydro Power Corporation (NHPC) Ltd and National Thermal Power Corporation (NTPC) Ltd. Punjab and Haryana as well as the Department of Energy of the Central Government had opposed the imposition of water cess by Himachal.

The Sukhvinder Singh Sukhu-led Congress government had passed a Bill on water cess during the Budget session of the Vidhan Sabha. A total of 172 hydroelectric projects in Himachal would be charged the cess from April 1, 2023. Uttarakhand and Jammu and Kashmir are the other two states that have imposed water cess on hydroelectric power generation and Himachal is hoping to generate at least Rs 2,000 crore annually from it.

“The cess will be charged once the committee headed by the Secretary (Power), in consultation with the Law and Finance departments, decides tariffs and the criteria for charging the cess. The recommendations of the committee will be placed before the Cabinet for approval,” said a senior official.

The water cess proposed by Himachal is almost five times of what is being charged in Uttarakhand and two times of the cess in Jammu and Kashmir but there is a possibility that it may be reduced after consultations with the power producers.

The Director, Union Ministry of Power, had on April 25, 2023, issued a letter to all chief secretaries and power companies, terming the water cess imposed by the Himachal Government as ‘illegal and unconstitutional’. Public sector undertakings like the NTPC, NHPC and the Satluj Jal Vidyut Nigam were asked to challenge it. The letter had cited eight constitutional provisions while stating that all such taxes or duties could not be levied under the guise of power generation and if any such tax or duty has been levied by any state, it should be withdrawn promptly.

The Congress government is in no mood to give in on the issue, considering the precarious financial position of the state, which is under Rs 75,000 crore debt.