With power consumption coming down due to the lockdown, the Gridco would be forced to pay at least Rs 55 crore per month towards Fixed Cost Liability of surrendered power to the generating plants.
Prior to the lockdown, the daily demand of power was 3,300 MW while it has gone down to 2,700 MW now due to shutdown of industries and market complexes.
The Gridco has signed Power Purchase Agreements (PPAs) with generating companies and the PPAs come in two parts: Fixed Cost and Variable Cost. As the Gridco is not utilising the power and surrendering it, the company would be absolved of Variable Cost. But it has to pay the Fixed Cost of installing power project which includes repayment obligations to lenders.
The Gridco has entered PPAs with nine inter-State generating stations (ISGSs). As it is surrendering power to the ISGSs, it would have to pay the Fixed Cost unless PPAs are cancelled. However, the PPAs cannot be cancelled because after the lockdown is over power requirement would be increased.
So, for the month of March, the Gridco would have to pay Rs 54.93 crore for the surrendered power.
Apprehending such a scenario earlier, Energy Secretary Bishnupada Sethi had brought it to the notice of Chief Secretary Asit Tripathy to flag the issue with the Union Ministry of Power. Accordingly, Tripathy has written to Union Power Secretary Sanjeev Nandan Sahai to consider if the proposal of capacity charge/ fixed charge can be reduced by say 50% which can be worked out by deferment of their capital cost, viz., Depreciation, Interest cost and RoE.
This deferred cost should be allowed to be recovered during the balance five-year tariff period, i.e. in 2021-24 on a case-to-case basis, Tripathy has proposed, stating that this can be done by back-to-back support, relief from the lenders and deferral on the recovery of principal and interest repayments without additional interest charges levied on the deferred payments.
However, the Ministry of Power has not responded in this regard to the State, said sources in the Department of Energy.
In the meantime, the Ministry of Power has requested the NTPC to take a lenient view in case the power distribution companies (Discoms) fail to pay their dues. The NTPC is also facing a tough time due to the COVID-19 impact as the power surrender amount is steadily going up because power consumption is going down.