It’s power-play in Punjab. As the State is moving towards Assembly polls with little patience, political parties in Punjab are apparently seeking “power” out of “power issues”. Less than a month after the Aam Aadmi Party (AAP) promised free power supply to domestic consumers besides cancellation of contentious power pacts, Punjab Government, too, has come out with electrifying orders on Wednesday.
In a shocker, Punjab Chief Minister Capt Amarinder Singh on Wednesday ordered cancellation of one power purchase agreement with Talwandi Sabo Power Limited (TSPL), Mansa, while asking the state power utility to revisit others such pacts signed during the erstwhile SAD-BJP regime.
The Chief Minister has directed the Punjab State Power Corporation Limited (PSPCL) to terminate or revisit all the “lopsided” PPAs that are not beneficial to the State.
Taking serious note of fiasco relating to Talwandi Sabo Power Limited (TSPL), Mansa — one of the largest private thermal plants in the State — which miserably failed to perform in the current paddy season, the Chief Minister directed the PSPCL to revoke its PPA, which is “heavily biased in favour of the company”.
The Chief Minister, in latest orders, ordered the PSPCL to cancel or revisit all “one-sided” PPAs with private companies that are not contractually obligated to supply sufficient power to meet the State’s peak demand during the paddy sowing and summer season.
The orders came a day after Punjab Congress’ newly-appointed team, led by state unit president Navjot Singh Sidhu, had urged a review of the PPAs with Independent Power Producers (IPPs), inked during Akali rule.
The Chief Minister has also asked the PSPCL to examine all the Power Purchase Agreements (PPAs) signed by the erstwhile SAD-BJPP government with the various IPPs, which were established basically to meet the power demands of the State, especially during paddy sowing and summer season.
Notably, the PSPCL had signed 14 PPAs with Thermal or Hydro plants and 122 Long Term PPAs with Solar or Biomass plants after 2007, to make the state power surplus with a generation capacity of around 13,800 MW (megawatt).
“However, in this current paddy season, all three units of TSPL failed to generate power for few days during the peak paddy season. One unit of TSPL failed completely to operate from March 2021, and two units remained out of power generation for the last one month,” noted the Chief Minister.
At present, only one unit of TSPL is operational, he said, adding that these factors have caused huge power shortage in the State.
PSPCL has already issued notice to TSPL by imposing the penalty but as the PPAs are one-sided, the penalty imposed will be very meager in comparison to the losses caused by the failure of these thermal plants, noted the Chief Minister.
Further, as per the provisions of the PPAs, at present, it is not compulsory for the IPPs to supply power during peak summer or paddy period. Hence, taking advantage of the loopholes in PPAs, the IPPs are claiming full fixed charges from PSPCL by supplying power in the off-season when the State requires it the least, he added.
The Chief Minister pointed out that to meet the deficit resulting from the failure of TSPL, with a capacity of three units of 660 MW each (total 1980 MW) to meet the State’s critical power requirement in the ongoing season, PSPCL had to purchase short-term power from the Power Exchange. PSPCL had procured 271 crore units of power in the months of June and July by spending Rs 886 crore.
PSPCL was also forced to utilize full power from the Central Sector Generating Stations so that the crops of the farmers could be saved, Capt Amarinder noted, adding that the State was also compelled to enforce power regulatory measures from July 1 to 11 on Large Supply (LS) industry of to meet the rising demand of the farmers.
It may be mentioned that the Chief Minister had sought a legal opinion on renegotiating controversial PPAs.
Also, the issue was raised by several Congress leaders, including Minister, legislators, and parliamentarian, during their meeting with Congress high command-constituted three-member panel.
It has been learnt that the three-member panel, in its report, had asked the Chief Minister to renegotiate the PPAs, to which the Chief Minister had claimed that the Government was in the process of the same.
Available information suggests that the Advocate-General office, in its opinion to the Government, has pointed out that the terms of these agreements have been drafted in such a way that the state power utility will be unable to terminate the agreements.