A day after slashing power rates across all category consumers, 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).
The move is aimed at ensuring uninterrupted, affordable, and quality power supply to the consumers across the State, as per the Chief Minister’s announcement a day before.
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.
The Chief Minister’s Office’s spokesperson said that the average per unit charges (fixed plus variable) remained at Rs 5.10, Rs 5.55, and Rs 5.30 during financial years of 2018-19, 2019-20, and 2020-21 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 at the rate of Rs two per KwH as per prevailing trends and the units scheduled from TSPL as 9,000 million units (MUs); the additional cost being incurred by PSPCL per annum at the present rates is about Rs 1,800 crores and the liability for the remaining period of PPA works out to Rs 36,000 crores.
“Even if it is assumed that the energy scheduled from TSPL would gradually rise to about 12,000 MUs due to increased demand and considering a conservative cost differential of Rs 1.50 per KwH, the liability remains the same,” said the spokesperson.
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, 2014-15 till 2020-21, 24,176 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 crore, Rs 756 crore, and Rs 446 crore during 2018-19, 2019-20 and 2020-21, respectively,” added the spokesperson.
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 (2x270 MW) PPA. Subsequently, the termination notice has been issued to the defaulting company.