Now, finance dept tells PSPCL to review PPAS to cut power tariff

THE ISSUE IS LIKELY TO GATHER STEAM AS THE STATE WILL GO TO THE POLLS EARLY NEXT YEAR

CHANDIGARH : In a strongworded communication, the state finance department has asked the Punjab State Power Corporation Limited (PSPCL) to review the power purchase agreements (PPAS) with private thermal plants to bring down electricity rates.

Also, the department directed the corporation to adhere to the guidelines of the Central Electricity Authority (CEA).

Earlier, the department had directed the PSPCL to reduce high transmission and distribution (T&D) losses, particularly in some rural belts of the state.

Since the ruling Congress in its 2017 assembly poll manifesto had promised to review the PPAS to cut electricity rates, the issue is likely to gather steam as the state will go to the polls early next year.

In the communiqué to PSPCL chairman-cum-managing director (CMD) A Venu Prasad recently, principal secretary (finance) KAP Sinha said non-implementation of CEA’S policy guidelines to design the private thermal plants’ installed capacity based on average predicted demand has led to high fixed costs, thus burdening the consumers with Rs 1,000 crore annually.

Sinha told the CMD that there was a pressing need to revisit these PPAS to have an effective strategy to bring down the power generation cost.

In February last year, chief minister Capt Amarinder Singh had announced to rework PPAS, terming them as “fraud on the state and its people”. The agreements were signed during the tenure of the previous Shiromani Akali Dal-bharatiya Janata Party (SAD-BJP) coalition government.

The PSPCL has PPAS with Larsen and Toubro, Sterlite Power and GVK Group’s thermal plants in Rajpura, Mansa and Goindwal Sahib.

These plants have a generating capacity of 1,400, 1980 and 540 megawatt.

Also, the CM last year had ordered a white paper on the PPAS but during the budget session he announced that more work needed to be done on paper.

It never saw the light of day as names of some officers holding key positions in the current dispensation had figured, it is learnt.

‘Agreements bleed state exchequer’

“The PPAS bleed the state exchequer and further burden the state consumers even if the utility decides to draw power from the national grid or power exchange. It will still benefit the utility as it is cheaper not to buy power from these expensive private plants,” Sinha wrote.

A. Venu Pradad said he was examining the suggestions in the letter (by KAP Sinha). Sinha could not be reached for comments.