Frequent changes in the power policy over the past six months has muddled the hydropower scene, particularly the mini, micro and small hydel projects, sending wrong signals to the independent power producers (IPPs). The confusion is being confounded due to seemingly conflicting policy announcements which were delaying a decision on 168 mini power projects the process for allotment of which was started almost 18 months ago. Worse, the basic issues like potential optimisation, overlapping of projects, evacuation of power and tariff-based bidding were still not being addressed. A situation has been reached where some small projects (up to 25 MW) like 13-MW Suil in Chamba, 7-MW Shalvi in Shimla and 7.5-MW Kilhi Bahl in Kangra are being offered through the competitive bidding route and at the same time some mini projects (up to 5 MW) allotted through the MoU route are being upgraded up to 20 MW. At the very outset the BJP government made a welcome announcement that all projects of more than 5 MW would be allotted through the competitive bidding route. Subsequently, it decided to go for free power-based bidding in place of upfront premium. Thereafter it decided to allow nine mini projects of 5 MW to raise their capacities and only last week it was announced that all projects up to 5 MW would be deemed as small projects. The IPPs who had purchased the hydropower policy document for Rs 1000 are a confused lot as they have not been informed about the amendments. Successive governments have been anxious to allot projects to the private sector and they have not given any thought to issues like overlapping and capacity optimisation. The IPPs who were desperate to secure projects have been coming up with big and small self-identified projects on the same streams. They submitted proposals for setting up two or three 5 MW projects when Himurja, the nodal agency for mini and micro-hydel projects, invited offers and came up with a single 25 MW or 30 MW project on the same stream in response to bids invited by the state electricity board. Further, to keep the generation capacity within 5 MW several projects were proposed on one stream. Now that the government has decided to bring all projects up to 25 MW in the small category, the cascading smaller projects should be clubbed into bigger projects to help optimise the potential, bring down the generation cost and minimise damage to environment. Further, to ensure transparency all projects, except those up to 2 MW which are exclusively reserved for Himachalis, be allotted through competitive tariff-based bidding.