Over-capacity in power generation, lack of proper linkage for coal to be used in private power plants and high fixed cost of power purchased from three private producers are the highlights of the draft White Paper on Power Purchase Agreements (PPAs).
Former CM Parkash Singh Badal and former Deputy Chief Minister Sukhbir Singh Badal, who held the Power portfolio when the PPAs were signed, and Bikram Singh Majithia, who held the portfolio of Non-Conventional Energy during the SAD-BJP government, have reportedly been blamed for the “mess in the Power Department”. Punjab CM Capt Amarinder Singh had told the Punjab Assembly on Tuesday that the draft White Paper was ready, but more work needed to be done before it was tabled in the House.
The draft paper, according to sources, says the genesis of the faulty PPAs lies in the 2007 SAD manifesto promising to make Punjab power surplus for which the peak power demand of 1,300 MW was taken into consideration.
This demand peaks only for four months (June – September) whereas the demand for the rest of the year is less than 1,000 MW. As a result, the state has had to pay a surrendered power cost to the three private power producers with plants at Rajpura, Talwandi Sabo in Mansa and Goindwal Sahib.
“From 2014-15 till December 2019, Punjab has paid Rs 4,000 crore as surrendered power cost to the plants,” says the draft report, adding that the power capacity installed was not needed. Also, the Non-Conventional Energy Department during the SAD- BJP government brought in almost 500 solar plants. Each was paid an exorbitant tariff.
The draft report also points out that in promoting these private power plants, the previous dispensation started backing down state’s own power generation plants at Bathinda, Ropar and Lehra Mohabbat.
Another discrepancy mentioned is that the private power plants were not provided with full coal linkage to the state’s own captive coal mine at Pachwara. As a result, they were allowed to import coal at huge costs to the exchequer. It further points out that the fixed cost paid to the three private companies was much higher than that paid to other companies with whom PPAs were signed during the same period.