Capt asks PSPCL to cancel, revisit PPAs with pvt firms

Orders corporation to revoke pact with Talwandi Sabo Power Limited for failing to perform in current paddy season
Capt asks PSPCL to cancel, revisit PPAs with pvt firms
Capt asks PSPCL to cancel, revisit PPAs with pvt firms
Published on Jul 29, 2021 12:23 AM IST
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Chief minister Captain Amarinder Singh on Wednesday ordered Punjab State Power Corporation Limited (PSPCL) to cancel or revisit all one-sided power purchase agreements (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 CM also directed the PSPCL to revoke the PPA of Talwandi Sabo Power Limited (TSPL), Mansa, one of the largest private thermal plants in the state, stating that the facility failed to perform in the current paddy season. The CM said the plant’s PPA is biased in favour of the company.

He asked the PSPCL to examine all the PPAs signed by the erstwhile SAD-BJP government with the independent power producers (IPPs), which were established basically to meet the power demands of the state, especially during paddy sowing and summer season.

“Terminate/revisit all the lopsided PPAs that are not beneficial to the state,” he said.

As reviewing the PPAs signed by the previous Badal government was one of the poll-promise as well, the government has faced lot of heat on the issue as those opposing these PPAs has claimed that the agreements have been signed to favour the private companies running plants and is the main reason behind costly power in Punjab.

A section of the Congress, including newly appointed PPCC chief Navjot Singh Sidhu, had repeatedly criticised the state government on the issue. The issue was also one of the five demands being raised by Sidhu and three working presidents of the Congress, during their meeting with the CM on Tuesday.

The CM noted that the PSPCL had signed 14 PPAs with thermal/hydro power plants and 122 long term PPAs with solar/biomass Plants after 2007, to make the state power surplus with generation capacity of around 13,800 MW.

However, in this current paddy season, all three units of TSPL failed to generate power for a few days during the peak paddy season. One unit of the TSPL failed completely to operate from March, and two units remained out of power generation for the last one month, he said.

At present, only one unit of the TSPL is operational, he said, adding that these factors have caused huge power shortage in the state.

The PSPCL has already issued a notice to the TSPL by imposing the penalty, but as the PPAs are one-sided, the penalty imposed will be meagre in comparison to the losses caused by the failure of these thermal plants.

Further, according to the provisions of the PPAs, it is not compulsory for the IPPs to supply power during peak summer/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.

The CM said to meet the deficit resulting from the failure of the TSPL, with a capacity of 3x660MW (1,980MW), the PSPCL had to purchase short-term power on exchange. The PSPCL had procured 271 crore units of power in June and July by spending 886 crore, he said.

The CM said the PSPCL was also forced to utilise full power from the central sector generating stations so the crops of farmers could be saved, adding that the state was also compelled to enforce power regulatory measures from July 1 to July 11 on large supply (LS) industry of to meet the rising demand of farmers.

This has not only resulted in inconvenience to consumers of the state but also imposed additional financial burden on the financially crunched PSPCL, the CM added.

Rajya Sabha member Partap Singh Bajwa said: “The announcement by the CM directing the PSPCL to cancel or revisit all one-sided PPAs signed under the SAD-BJP regime should have been the first action taken in 2017. I hope that the PSPCL will act quickly to ensure these unfair agreements are handled at the earliest.

“I recommend that any and all agreements signed by the Punjab Energy Development Agency under the SAD-BJP dispensation should be investigated for irregularities immediately.” ”. Bajwa said.

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Thursday, October 28, 2021