PUNJAB CM GIVES GREEN SIGNAL TO PSPCL FOR REPUDIATION OF TSPL’s PPA

PUNJAB CM GIVES GREEN SIGNAL TO PSPCL FOR REPUDIATION OF TSPL’s PPA

· MOVE AIMED AT ENSURING QUALITY POWER AT CHEAPER RATES TO CONSUMERS

Chandigarh, November 2: In a bid to ensure uninterrupted, affordable and quality power supply to the consumers across the state, the Punjab Chief Minister Charanjit Singh Channi on Tuesday gave a go ahead to the Punjab State Power Corporation Limited (PSPCL) to immediately issue notice to Talwandi Sabo Power Limited (TSPL) for repudiation of its Power Purchase Agreement (PPA).

Pointing out further, CM Channi said that this step had been taken to safeguard the interest of consumers of the State by way of reducing the burden of costly power.

According to a spokesperson of the Chief Minister’s Office, the average per unit charges (fixed + variable) remained at Rs. 5.10, Rs. 5.55 and Rs. 5.30 during FY 18-19, FY 19-20 and FY 20-21 respectively. Whereas, the average cost of power per unit discovered in the short-term market for these years has respectively been Rs. 3.86, Rs. 3.21 and Rs. 3.01. Resultantly, now taking the average cost differential between TSPL power and the short-term market power @ Rs. 2 per KwH as per prevailing trends and the units scheduled from TSPL as 9000 MUs; the additional cost being incurred by PSPCL per annum at the present rates is about Rs. 1800 crores and the liability for the remaining period of PPA works out to Rs. 36000 crores. Even if it is assumed that the energy scheduled from TSPL would gradually rise to about 12000 MUs due to increased demand and considering a conservative cost differential of Rs. 1.50 per KwH, the liability remains the same.

Divulging further, the spokesperson said that due to its higher variable rates, TSPL is placed lower down the merit order and as a result lesser quantum of power is scheduled, whereas PSPCL has to pay full capacity charges for the declared availability of the plant. Since, FY 2014-15 till FY 2020-21, 24176 MUs of energy has been surrendered while fixed charges of about Rs. 2920 crores have been paid by PSPCL for such energy. The cost of surrendered power from this plant was Rs. 389 Cr, Rs. 756 Cr. and Rs. 446 Cr. during FY 18-19, FY 19-20 and FY 20-21, respectively. With further penetration of renewable energy having ‘must run’ status, the power surrender is likely to increase and thus costing power from TSPL, even more, added the spokesperson.

It may be recalled that the state government had already given green signal to PSPCL’s proposal to terminate GVK Goindwal Sahib (2×270 MW) PPA. Subsequently, the termination notice has been issued to the defaulting company.