Shimla, Jan 6: The Himachal Pradesh Cabinet has approved the monetisation of 438 MW of free power received annually from the Nathpa Jhakri and Rampur hydropower projects in the Sutlej basin, a move aimed at boosting the state’s revenues and improving transparency in power management.
The decision was taken at a Cabinet meeting held on December 30. Under the new arrangement, the free power will no longer be supplied to the Himachal Pradesh State Electricity Board (HPSEB). Instead, it will be sold through power trading by the Directorate of Energy, which has been designated as the Energy Management Centre for undertaking such activities.
The government said the step would help the state realise better financial returns from free power accruing from large hydropower projects, while ensuring greater efficiency and transparency. Earlier, HPSEB used this free power to supply electricity to consumers across the state.
In another key decision, the Cabinet eased royalty norms for small hydropower projects of up to 25 MW capacity by amending the Swaran Jayanti Energy Policy-2021. More than 500 small hydel projects are expected to benefit from the revised framework.
Under the amended policy, free power royalty for eligible projects has been rationalised to a uniform 12 per cent, along with a one per cent contribution to the Local Area Development Fund (LADF). Earlier, developers were required to pay royalty ranging from 12 to 30 per cent, in addition to the LADF levy, which they said had rendered several projects financially unviable.
The state government expects the relaxation to unlock investments of around Rs 20,000 crore and accelerate work on multiple stalled hydropower projects. However, the relief will not apply to projects that have already been commissioned or those where Power Purchase Agreements (PPAs) have been executed with HPSEB.
Separately, the state government reaffirmed its right to collect land revenue from hydropower developers, describing such payments as a statutory obligation. Chief Minister Sukhvinder Singh Sukhu said all operational projects must comply with land revenue rules, while adding that the government was open to discussions on rationalising rates where required.
The Chief Minister said the state would continue to engage with developers to address operational and regulatory challenges faced by the sector, while ensuring compliance with existing laws. A separate meeting on hydropower projects of up to 25 MW capacity is scheduled to be held on January 12 in Shimla, to be chaired by Revenue Minister Jagat Singh Negi.
Sukhu also said Himachal Pradesh had sought permanent representation in projects managed by the Bhakra Beas Management Board (BBMB) and had demanded early settlement of about Rs 6,500 crore in arrears relating to the 1966–2011 period.
