'Doubling clean energy cess on coal may hike power tariff'

The Centre’s proposal to increase the clean energy cess on coal is likely to lead to hike in power tariff as the state-run behemoth Coal India itself anticipating an impact of Rs 5,000 crore.

“In indirect taxes, I propose to increase the Clean Energy Cess from 100 to 200 per metric tonne of coal, etc to finance clean environment initiatives,” Finance Minister Arun Jaitley said while presenting the Budget 2015-16.

At present the cess is levied on coal, peat and lignite to finance and promote clean energy initiatives and fund research in this area.

According to a Coal India source, the “impact would be to the tune of Rs 5,000 crore. But it would be passed on to power consumers.”

The impact on power tariffs would be about 4 paise per unit, said the source.
From the increase in cess it is likely that the cost of generation would go up by  5-6 paise per unit, NTPC said.

In the last budget, the government had increased the cess to Rs 100 from Rs 50 per tonne. The country began imposing clean-energy cess on raw coal and lignite in 2010.