Media reports say that the ONGC Tripura Power Company (OTPC) is planning to sell electricity through the national grid at Rs 3 a unit, the cheapest price. Currently in trial mode, the first 363.3 MW unit of the project is expected to be commercialised in the first week of July.    When OTPC starts selling electricity at Rs 3 per unit it may earn the distinction of supplying the cheapest gas-based power in India. The Palatana-based generation facility has approached the regulatory commission for a tariff of Rs 3 a unit.    

In comparison, the cheapest gas-based electricity generated by NTPC facilities, using administered pricing mechanism (APM) gas, is priced at approximately Rs 4.1 a unit. APM is applicable to gas sourced from oil and gas assets and distributed on a nomination basis.    

Gas sourced from assets that were auctioned, such as Reliance Industries’ D-6 block in the Krishna-Godavari basin, is priced higher, resulting in higher electricity generation tariffs. All seven North-East states will get a share of OTPC power. The 600-km transmission line from Palatana to Bongaigaon in Assam has also connected large parts of the region with the national grid.    

The credit for OTPC’s low generation tariff largely goes to the cheap gas sourced from its parent, ONGC. Under the terms of a long-term agreement inked between the two sides in 2006, OTPC was offered firm supplies of 2.65 million metric standard cubic metre (mmscmd) of gas a day at Rs 4.40 per cubic metre, to be increased by four per cent a year.