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Tata Power seeks 50 paise/unit hike from Punjab government Tue, Dec 11, 2018,

Posted On : February 18, 2019

Tata Power has sought a hike of 50 paisa per unit on the electricity Punjab purchases from it. Currently, Punjab pays ?2.91 per unit to the company.

The issue has put the state in a tizzy as the hike will put a burden of ?200 crore on the consumers annually.

The Congress, which is in opposition in Haryana, has opposed any amendment in the PPA, while in Punjab, the state government reportedly has asked the secretary (power) to take a call on it.

Tata Power is supplying power from its 4,000MW Mundra ultra mega power plant (UMPP) to Gujarat (1,805MW), Maharashtra (760MW), Rajasthan

(380MW) Haryana (380MW) and Punjab (475MW).

In its letter to principal secretary (power), Punjab, Tata Power has sought revision on basis of a Supreme Court order that had asked the three private power plants — 4,000MW Coastal Gujarat Power Limited of Tata Power; 4,620MW Adani Power Mundra Ltd and 1,200MW Essar Power Gujarat Power Ltd — to approach the respective state governments to revise the PPA. These plants are shut since the price of coal imported from Indonesia increased, leading to losses. Tata Power’s individual losses had accumulated to ?8,000 crore till March 31 this year, the letter claims.

The Gujarat government had approached the Supreme Court for directions based on the report of an expert panel that suggested altering the power purchase agreement (PPA). Later, on the direction of the Supreme Court, the Gujarat government constituted a three-member committee that recommended revision of the PPA to let these plants run.

Based on the report, the Supreme Court passed an order recently, directing the Central Electricity Regulatory Commission (CERC) to resolve the issue that had arisen due to hike in the cost of imported Indonesian coal.

Now, Tata has approached the Punjab government to sign the revised PPA. “How can we sign revised PPA and give extra money, when there is no person from Punjab involved in evaluation of the tariff.

If they are incurring losses due to high input costs, it’s their problem. Punjab is already paying ?2,700 crore to private players as the PPA is binding. If Punjab wishes to amend PPA to benefit Tata, it should also ask PSPCL to amend its PPA within state to cut losses,” said a power engineer on condition of anonymity.

In Haryana, the Congress is opposing any revision in the PPA, saying it will benefit private players Adani, Tata and Essar. However, in Punjab, the Congress government reportedly is secretly working on amending the PPA.

Retired power engineer Padamjit Singh said how can the state government ask PSPCL to revise PPA, as revision is subject matter of the regulator, which decides tariff and PPAs. The hike will lead to ?200-crore burden on the consumers. Secondly, the high power committee of Gujarat is not a statutory authority. Punjab should oppose it.”

Despite attempts, secretary (power) A Venu Prasad could not be contacted. However, officials said he had forwarded the letter to the PSPCL for consideration and comments.

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The body alleged that this is a clear attempt to introduce privatization through the backdoor and deserves to be scrapped. The purpose of the central government is not to review or revise the existing National Electricity Policy but the total replacement of existing policy with a new policy to be recommended by the expert group so as to achieve privatization, the body alleged. As per Electricity Act 2003, National Electricity Policy is to be prepared in consultation with the state governments and Central Electricity Authority (CEA), a statutory body. However, the body said that the CEA is not included in the proposed schedule of discussion. Further, only 5 states have been included in an expert group instead of all the states, it added. K Subramanian, Chief Economic Adviser, has stated that India is the only country that readily implemented a slew of reforms and used this crisis to herald a change in India''s economic thinking, it said. The strategy of government seems to be “never waste a crisis” and use the crisis of pandemic to streamroll so-called reforms by way of privatizing, it alleged. The draft proposal is of serious nature for which the present situation of a pandemic is a serious constraint, it stated. The Ministry of Power has once again found peak pandemic time as an opportunity in crisis to launch the draft amendments to National Electricity Policy, it lamented. Once the draft policy is finalised, the notified policy would have the status of “subordinate legislation”, and for this reason, the matters need to deliberate as in the case of the legislation itself or as in the case of amendment in the Act itself, it opined. Draft national electricity policy is pushing for more private participation in the power sector and launching sell out of public assets as at Chandigarh and Dadra Nagar Haveli, it noted. The preferred route being suggested are failed models like the franchisee system, transferring distribution responsibility to a private party, and separation of carriage (lines) and content (supply) business, it opined. Since the existing Policy is in force since February 2005 there was no emergency to totally replace it, while power engineers and workers as front line workers are already stressed in maintaining power continuity, it added
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