Cancel or revisit 'one-sided' power pacts, orders Punjab CM

Chandigarh, July 28 (IANS) Chief Minister Amarinder Singh has ordered Punjab State Power Corporation Ltd (PSPCL) to cancel or revisit all the "one-sided" pacts with private companies that are not contractually obligated to supply sufficient power to meet the state's peak demand during the paddy sowing and summer season.

Taking serious note of the fiasco relating to Talwandi Sabo Power Ltd (TSPL) -- one of the largest private thermal plants in the state, he directed the PSPCL to revoke its power purchase agreement (PPA), "which is heavily biased in favour of the company".

He asked the PSPCL to examine all the PPA) signed by the previous SAD-BJP government with the various independent power producers , which were established basically to meet the power demands of the state, especially during paddy sowing and summer season, and terminate or revisit "all lopsided PPAs that are not beneficial to the state".

The Chief Minister noted that PSPCL had signed 14 PPAs with thermal or hydro and 122 long-term PPAs with solar and biomass plants after 2007, to make the state power surplus with generation capacity of around 13,800 MW.

However, in the current paddy season, all three units of the TSPL failed to generate power for a few days.

One unit of the TSPL failed completely to operate from March and two units remained out of power generation for the last one month, he said.

At present, only one unit of the TSPL is operational, he said, adding that these factors have caused a huge power shortage in the state.

The PSPCL has already issued notice to the TSPL by imposing a penalty but, "as the PPAs are one-sided, the penalty imposed will be very meager in comparison to the losses caused by the failure of these thermal plants".

Further, as per the provisions of the PPAs, at present, it is not compulsory for the IPPs to supply power during peak summer or paddy period. Hence, taking advantage of the loopholes, the IPPs are claiming full fixed charges from the PSPCL by supplying power in the off-season when the state requires it the least.

The Chief Minister pointed out that to meet the deficit resulting from the failure of the TSPL, with a capacity of 1,980MW, to meet the state's critical power requirement in the ongoing season, the PSPCL had to purchase short-term power from the Power Exchange.

The PSPCL had procured 271 crore units of power in June and July by spending Rs 886 crore.