National Thermal Power Corporation has got the mandate for setting up its first ever hydro electric project in Himachal Pradesh. The 800 MW Kol Dam Hydro Electric Project in Bilaspur district will be set up at an estimated investment of Rs. 5300 crore. Pradesh at an estimated cost of Rs. 5300 crore. It envisages utilization of power potential of the Sutlej river for electricity generation. Central Electricity Authority (CEA) has accorded techno-economic clearance (TEC). The clearance of Ministry of Environment & Forests has also been received. The project involves construction of 163 meters high rock fill dam across the river Sutlej 6 Km. upstream from the existing Dehar Power Station and installation of four units of 200 MW each.

The TEC was accorded to the project way back in August 1988 but could not be set up for various reasons by the state and finally it was proposed to be implemented by NTPC. The power generated from KOL project would be evacuated to the power deficient Northern Region through 400 KV integrated transmission system lines constructed for Nathpa Jhakri and Kol Dam projects. The project is programmed to be completed in a period of six and a half years.