Punjab Govt may scrap 5 of 122 Power Purchase Agreements

Ruchika M Khanna

Tribune News Service

Chandigarh, July 8

The government has begun the process to terminate/ re-negotiate five Power Purchase Agreements (PPAs) — two made by the previous Akali-BJP government with private entities and three with National Thermal Power Corporation (NTPC) supplying costly power to the state.

The high cost of power supplied by private entities and other power trading entities to the now power-starved state has raised a political storm, with growing demand to scrap these agreements.

Two PPAs being examined to be scrapped/ re-negotiated were signed with GVK Power and Damodar Valley Corporation (DVC) by the previous government. While the former project is supplying power at Rs 8 per unit, the latter is reportedly supplying at Rs 4.60 per unit.

The previous government had signed as many as 122 PPAs, of which five PPAs are now caught in a political storm, with both the Congress and AAP demanding that these be scrapped.

Punjab State Power Corporation Limited (PSPCL) has also filed petitions with Punjab State Electricity Regulatory Commission (PSERC) for scrapping three other PPAs with the NTPC. The state was paying Rs 150 crore per annum to NTPC for getting power from its plants at Antia, Aurya and Dadri.

The charges were being paid without getting any power from these plants for many years now as the per unit cost of power from these plants was very high. Confirming this, A Venu Prasad, Additional Chief Secretary, Power, said the scrapping of these three PPAs would be of huge benefit to the state.

While two of these three PPAs were signed 25 years ago, the third was signed 24 years ago.

A meeting to examine all legal angles, before the PPAs with GVK Power and DVC can be scrapped/ re-negotiated, was held today in the Chief Minister’s Office (CMO).

Sources told The Tribune that after debating on how to proceed with the termination/re-negotiation of the five agreements, it was decided that the two PPAs with GVK and DVC be immediately sent for examination to the Advocate General’s Office, where the legal officers can then move forward to terminate/ re-negotiate the pacts.

It may be mentioned that five of the 122 PPAs are at the heart of the controversy regarding buying of expensive power when cheaper alternatives are available, as the other 117 are related to buying of solar, wind, biomass power and power generating from cogeneration plants set up by sugar mills.

Inked with pvt entities, NTPC

• Two of the five PPAs being examined to be scrapped/re-negotiated were signed with GVK Power and Damodar Valley Corporation by the SAD-BJP government
• The other three PPAs were signed with NTPC for which the state is paying Rs150 crore per annum without getting any power as the per unit cost from these plants is very high