HPGCL's power sale proposal shot down | chandigarh | Hindustan Times
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HPGCL's power sale proposal shot down

chandigarh Updated: Apr 16, 2012 19:40 IST
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Reeling under financial crunch caused by the defaulting power distribution companies in the state, the Haryana Power Generation Corporation Limited (HPGCL) has suffered another setback.


The Haryana Electricity Regulatory Commission has turned down its request for permission to sell power to other corporations outside the state in the event of payment default on its bills by the state-owned distribution companies, Uttar Haryana Bijli Vitran Nigam and Dakshin Haryana Bijli Vitran Nigam, beyond 60 days.

The generation company had sought permission for 'third party sale' after the two discoms repeatedly defaulted on payment in the past one year.

UHBVN and DHBVN have run up dues of roughly Rs 3900 crore. Of this, UHBVN owned a staggering Rs 2400 crore and DHBVN had an outstanding of Rs 1500 crore in January 2012 to HPGCL for power purchase.

The generation corporation, which supplies power worth Rs 425 crore a month to the two discoms, has been severely hit by the payment default and nearly defaulted on its loan repayments at one stage. The payment default has forced the company to resort to increased working capital borrowing.

"HPGCL is under huge cash crunch because of the poor payment history of the two discoms. The non-payment of bills in time by UHBVN and DHBVN is causing HPGCL to pay heavily on short term funds for working capital loan requirement.

"There is an urgent need to enforce payment discipline," the generation firm argued while seeking the right to sell power to third party in case of payment default to remain a financially viable entity.

The two discoms, which have been in poor financial health and depend on HPGCL for bulk of their power supply, are totally against granting permission for third party sale. The three-member commission headed by RN Prasher, a retired IAS officer, also turned the generation entity's request, but gave permission to sell power not scheduled by UHBVN and DHBVN when the two discoms ask it to back down their stations drawing power at a lower rate from other generators, traders etc.

The two discoms have been in dire straits for a long time due to poor fiscal planning and efficiency levels. UHBVN and DHBVN, which were created in 1999 after unbundling of the erstwhile Haryana State Electricity Board have accumulated colossal losses of more than Rs 6000 crore.

The cash losses of the two companies, which reflect their ability to manage day-to-day business, present a grim picture despite substantial hike in power tariffs for consumers of different cateogires in the last three years.

Coal transit loss: HPGCL asked to study Punjab model

HPGCL will examine the steps taken by the Punjab State Power Corporation Limited (PSPCL) to keep the transit loss of coal for its thermal power stations at Bathinda, Ropar and Lehra Mohabbat under check.

While PSPCL has reported transit loss of 0.41% to 2% for these power plants at different periods, the same is much higher at over 5% at the thermal power stations of HPGCL at Panipat, Yamunanagar and Hisar.

In its generation tariff order, HERC, which has allowed 1.5% transit loss of coal in 2012-13, has directed the state-owned power generation corporation to interact with the authorities of PSPCL and NTPC and adopt the steps taken by them to control the transit loss.