The Punjab State Electricity Regulatory Commission (PSERC) has pulled up the Punjab State Power Corporation Limited (PSPCL) for purchasing power at high cost from some power generators, by citing it against the interest of the consumers. With this decision, a reiteration of the previous verdict delivered in February 2021, 850MW power purchase has been disallowed.

The PSERC ruling came on a review petition that the PSPCL had filed against the regulator denying approval to Power Purchase Agreements (PPAs) with the Damodar Valley Corporation (DVC), Kolkata; Pragati Power Corporation Limited and Meja Urja Nigam Power Private Limited, aggregating to 885.10 MW.

In a strange turn of events, the review petition asked for approval to the PPA with the DVC, but just last month in August, the PPA had taken approval of chief minister Capt Amarinder Singh to scrap the PPA, citing the high cost.

“PSPCL’s proposal of procurement of 885.10 MW on long-term basis from projects Meja, Pragati-III and DVC’s Raghunathpur, Durgapur & Bokaro Stations at the given per unit price of ?5.53; ?4.82; ?4.61; ?4.44 and ?4.39 respectively, would not be an economically viable proposition, particularly so, when much cheaper power is available in the market. As such, it would not be in the interest of consumers of Punjab, if procurement from these stations at the indicated rates is approved. The commission does not think it prudent to permit the same at the indicated prices,” read orders of the chairman Vishawjeet Khanna, adding that the PSPCL shall be at liberty to approach it in case, it is able to renegotiate prices to commercially viable levels.

The commission noted that a substantial amount of energy is being surrendered by PSPCL from DVC power stations, which belies the claim that power from this source is consistently required throughout the year, and not only in the paddy season. The PSERC said that the PSPCL should buy at up to ?3 per unit, including fixed and variable cost.

To demolish the PSPCL claim that a gas-based power station can be used as a peaking station, the commission observed, “The PSPCL has its own hydro power stations which may be used as and when peaking power station for flexible operation as required. There appears to be no cause to review the order,” the PSERC adds in its latest order.