Chief Minister Captain Amarinder Singh has ordered Punjab State Power Corporation Limited (PSPCL) to cancel or revisit all the 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.
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 has directed PSPCL to revoke its PPA, which is heavily biased in favour of the company.
He has also asked PSPCL to examine all the Power Purchase Agreements (PPAs) signed by the erstwhile SAD-BJPP government with the various Independent Power Producers (IPPs), which were established basically to meet the power demands of the State especially during paddy sowing and summer season. He has directed PSPCL to terminate/revisit all the lopsided PPAs that are not beneficial to the state.
The Chief Minister noted that PSPCL had signed 14 PPAs with Thermal/Hydro and 122 Long Term PPAs with Solar/Biomass Plants after 2007, to make the state power surplus with generation capacity of around 13800 MW. 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, he said. 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. Further, as per the provisions of the PPAs, at present, 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 Chief Minister pointed out that to meet the deficit resulting from the failure of TSPL, with a capacity of 3x660MW (1980MW) 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.
It was also forced to utilize full power from the Central Sector Generating Stations so that the crops of the farmers could be saved, Captain Amarinder noted, adding that the state was also compelled to enforce power regulatory measures from 1st July to 11th July on Large Supply (LS) industry of to meet the rising demand of the farmers. This, he said, not only resulted in inconvenience to the various consumers of the state but also imposed additional financial burden on the financially crunched PSPCL.