While rehabilitation of the Sardar Sarovar oustees is the most pressing issue, the potential benefits from the dam are also under public scrutiny.  Electricity will be generated from the dam, but how much and at what cost?  In FY 2005-06, the Maharshtra State Electricity Company purchased 17062 MU of electricity at a total cost of Rs 3263 Crore.  This works to Rs 1.91/unit.  However the Maharshtra Electricty Regulatory Commission noted, "the power purchase cost of Rs 3263 Crore excludes the cost of power purchase from the Sardar Sarovar Project and the Government of Maharashtra has indicated a single-part tariff of Rs 4.18/unit for purchase from the Sardar Sarovar Project"  While on an average electricity costs Rs 1.91/unit, the SSP's power costs Rs 4.18/unit!

However on April 17, 2006 Gujarat's Urban Development Minister and spokesperson I. K .Jadeja, accusing Narmada Bachao Andolan activists for pointing that the electricity from the dam would cost very high maintained, "the fact is per unit cost of electricity generation will be Rs 1.60 while in the Enron project the cost is Rs 5.50 per unit." 

A week later calculating based on Rs 4/unit, Gujarat government filed an affidavit in the Supreme Court and claimed that generation of 350 crore units of power, equivalent to Rs. 1,400 crore, would be lost if the dam is not taken to 121.92. There are two problems with this statement.  Firstly as mentioned by Sardar Sarovar engineers on NDTV, only 55 crore units (550 MU) additional will be generated by a 121.92 high dam.  Secondly, since electricity costs Rs 1.91/unit, this is a value of Rs 105 crores. Sardar Sarovar's electricity is costlier but it doesn't add to the value.   Of the Rs 1400 crores, Rs 1295 crore is not real value, its on paper, like rehabilitation by the Madhya Pradesh government.  By exaggerating the additional units generated and costing them at Rs 4/unit the loss appears 12 times more than it actually is, in the Gujarat affidavit.

In reality, electricity loss is not in the future, but has already happened in the past.  When the dam was taken to 110.6 mts two years ago in June 2004, it could have immediately begun generating electricity,  but it didn't. The five turbine generator units in Canal head power house were commissioned in a phased manner only in August through Dec 2004. That's when power started trickling in. But the bulk of the SSP power is produced in the river bed, not at the canal head.    The first unit in River Head Power House was commissioned only in February 2005.  After that every 3 months or so a unit was added and we now have 5 units commissioned with one still pending.  This is the reason why the dam did not produce much electricity at 110.6 mts. It's not that it didn't have the height, it didn't have the guts inside!

With most of the generators now in place, even a 110.6 mts high dam will produce much more electricity this year as compared to last year.   Of the 350 crores that Gujarat claims will be generated by a 121.92 mts high dam, only 55 crore units can be attributed to the additional height. A loss of about 100 crore units last year is because of the delays in commissioning the turbine generator units and does not have anything to do with the dam's height.  The balance 195 crore units is exaggeration.

With 55 crore additional units due to a higher dam, after transmission and distribution, one can continuously power about 30,000 air conditioners.  Since the power is split between three states, this is about 17100 ACs in Madhya Pradesh, 8100 ACs in Maharshtra and 4800 ACs in Gujarat. That is how small an electricity benefit we get by raising the height of the dam to 121.92 and displacing thousands of Narmada valley families without rehabilitation. Waiting until they are rehabilitated before constructing the dam higher is not only the right thing to do, but also the most reasonable thing to do.
 

For your reference:

1. Maharashtra Electricity Regulation Commission order  has SSP power cost of Rs 4.18/unit (see page 3 of the pdf file below):
   http://mercindia.org.in/pdf/14_Order_dt_21_03_2006_CN_52%20of%202005.pdf
2. I.K.Jadeja was quoted in the article Modi may call off Hunger Strike,  Hindu, April 17, 2007:  "the fact is per unit cost of electricity generation will be Rs 1.60 while in the Enron project the cost is Rs 5.50 per unit." 
   http://www.hindu.com/thehindu/holnus/002200604171452.htm
3. NDTV bulletin,  PM to decide on Narmada on April 15, 2006,  has SSP engineers claiming additional generation of 550 MU (55 crore units) due to a 121.92 mts high dam as compared to 110.6 mts.
   http://www.ndtv.com/template/template.asp?template=narmada&id=86923&callid=1
   Also see Financial Express for power discussion and figures:
   http://www.financialexpress.com/fe_full_story.php?content_id=124692
4. Gujarat Government's affidavit claiming Rs 1400 crore electricity benefit is summarized in Hindu, April 26, 2006
   http://www.hindu.com/2006/04/26/stories/2006042603111300.htm
5. Commissioning details of Sardar Sarovar canal head and river bed power house generators in Hydropower link of: http://www.sardarsarovardam.org/