Coal washing charges: PSPCL releases ₹800 cr to private thermal plants
The Punjab State Power Corporation Ltd (PSPCL) has paid about ₹800 crore as the first instalment of coal washing charges to private generators of thermal power at Rajpura and Talwandi Sabo, as per the directions of the Supreme Court
The Punjab State Power Corporation Ltd (PSPCL) has paid about ₹800 crore as the first instalment of coal washing charges to private generators of thermal power at Rajpura and Talwandi Sabo, as per the directions of the Supreme Court.
On March 9, the apex court had directed PSPCL to clear the arrears, along with interest, of the difference between the actual cost incurred by the two private generators and the payment received by them for the supply of washed coal.
As per the order, the arrears are to be paid in two instalments -- one before March 31 and the other on or before May 31.
According to PSPCL officials, out of the total arrears of ₹1, 750 crore, Nabha Power Limited (NPL), which operates the Rajpura thermal plant, will get about ₹1, 100 crore, comprising ₹750 crore as the principal amount and about ₹350 crore as the interest amount while the rest will go to the Tawlandi Sabo power plant.
PSPCL will inform the Punjab State Electricity Regulatory Commission (PSERC) about the payments to the independent power producers (IPPs) in the last financial year, and the balance amount payable before May 31 this year.
PSPCL paid ₹1, 423 crore as coal washing charges to the IPPs in 2020, and to recover the amount, it had brought in a hike of 30 paise per unit in the current tariff cycle (2020-21). For recovery of the remaining ₹1, 750 crore, PSPCL will have to increase the tariff by around 40 paise for another year, or adjust its Annual Revenue Requirement petition, if it doesn’t ask for tariff revision.
As per the tariff proposal for the financial year 2021-22, submitted by PSPCL on January 25 to PSERC, the commission plans to recover the gap of ₹9, 807 crore during the next 2 to 5 years so that there is no tariff increase but some relief for domestic consumers with a load up to 7KW can be granted.
After the regulator agrees to defer any amount for the next year, these become regulatory assets. Regulatory assets are those expenses of electricity distribution companies that they can legally pass on to customers with a hike in tariff but are deferred for the time being.
“Now, the payment of coal washing charges to be recoverable from the consumers can lead to tariff increase or PSERC can be requested to add this amount also to regulatory assets,” said a power engineer.
All India Power Engineers Association (AIPEF) spokesman VK Gupta said PSPCL lost the case of coal washing because of faulty replies to pre-bid queries during the tendering process. “The officials are responsible for this gross mistake, which has taken a toll of ₹3200 crore on the consumers’ pocket, should be punished for failing to protect the interests of state during the bidding process,” he said.
PSPCL CMD A Venu Parsad said PSPCL has saved a lot of money with cost cutting, timely payment of interests, and efficient management of resources. “I assure you that we will survive the burden of this payment of ₹1, 750 crore through internal working, and won’t ask for tariff hike for this amount.”
He said the PSPCL is studying the verdict and may go for fresh petition before the regulator on certain issues, as allowed by Supreme court, on certain issues which can save cost of power purchase from private thermal plants.
