Neyveli Lignite cuts power tariff due to improved efficiency

NLC India Ltd, formerly known as Neyveli Lignite Corporation Ltd, said it has been able to reduce the price of its power by another Rs 35 to 58 paise per unit from this year due to improved efficiency and lower taxes.

This is in addition to the 45 to 75 paise already reduced due to the introduction of GST in July.

Together, said the coal and power producer, the two cuts will save about Rs 1,523 cr for the consumers every year.


Due to improved “technical expertise and efficient mining operation and prudent cost management,” there has been a decline of Rs.0.35 to Rs.0.58 per kWh in the price of the power that it supplies, the company said.

In terms of coal pricing, there has been a reduction of Rs 300 per ton in coal prices, in turn leading to lowering of power tariff for electricity from its captive power plants with effect from April/May 2018.

“On account of above reduction in transfer price, around Rs.683 Cr (per year) will be passed on by the company to the beneficiary Power Distributing Companies in southern region,” it said.


Another Rs.0.45 to Rs.0.75 per kWh has been saved due to the coming into effect of GST from July last year, it added.

As NLC is a power generator using coal from its own mines in the same state, a compensatory cess will not longer be applicable under the GST, it added.

In the nine months of the last financial year, the lower taxation resulted in the passing on of Rs 631 cr to distribution companies, it added.

While the first benefit was available to distribution companies in South India, the second benefit is available to both South Indian power distribution companies as well as those in Rajasthan.

India is seeing a slow, but steady move towards renewable energy resources, which is resulting a decline in the growth of demand for traditional energy sources like coal.