Even a month after deciding to repudiate the power purchase agreement with GVK and tell the state’s other two independent power producers (IPPs) that they were in default, Punjab Power Corporation Limited (PSPCL) is sitting on these notices.
The state government approved the PPA’s repudiation on the recommendation of a three-member PSPCL committee that had observed the unit rate to be Rs 10 compared with Rs 3 to 3.50 in the national exchange. To the Talwandi Sabo Power Limited (TSPL) and Nabha Power Limited (NPL), the state government will serve notice for only default and not termination of the PPAs. Confronted, PSPCL chairman and managing director A Venu Parsad said: "So far, the notices of repudiation or default are not served to any of three IPPs in Punjab but we will do that soon."
The three-member committee that suggested repudiation had also observed that GVK had the lowest merit of three IPPs due to its higher variable rate and lesser quantum of scheduled power, while the corporation had to be pay full capacity charges for the plant’s declared availability. The committee also anticipated that the state will strengthen its transmission system and so its ATC (available transfer capability) will rise by 500 to 1,000 megawatts next year, and by another 1,000 MW in the later few years. It hoped that and this will help PSPCL procure much cheaper electricity for the paddy sowing seasons from the short-term market to compensate for the loss of generation from GVK. A bulk of the paddy-season electricity goes to agricultural tube-wells, since this crop guzzles water.
The PSPCL committee stated in its last report to the state government that: "From financial year 2018-19 to 2020-21, the state surrendered 5,737 million units (MUs) of energy, while paying the fixed charges of Rs 1,017 crore