Punjab CM Orders PSPCL to Cancel Or Revisit ‘One-Sided’ PPAs, Directs to Revoke Pact With TSPL

He said the PPA with TSPL was “heavily biased” in favour of the company.

Punjab Chief Minister Amarinder Singh on Wednesday ordered power utility PSPCL to cancel or revisit all the “one-sided” power purchase agreements signed with private firms, which were not contractually obligated to supply power to meet the peak demand during the paddy sowing and summer season.

The chief minister directed Punjab State Power Corporation Limited to revoke its PPA with Talwandi Sabo Power Limited, Mansa — one of the largest private thermal plants in the state — for “miserably failing” to perform in the current paddy season.

He said the PPA with TSPL was “heavily biased” in favour of the company.

Singh also asked the PSPCL to examine all the PPAs signed by the erstwhile SAD-BJP government with the various independent power producers (IPPs), which were established basically to meet the power demand especially during paddy sowing and summer season, according to an official release.

The move comes as the Congress-led government has been facing pressure from within the party and outside for scrapping the “faulty” PPAs signed by the previous SAD-BJP regime.

Punjab Congress chief Navjot Singh Sidhu and four working presidents on Tuesday had taken up five issues, including cancellation of PPAs with the chief minister for immediate action.

Amarinder Singh on Wednesday noted that the PSPCL had signed 14 PPAs with thermal and hydro plants, and 122 long term PPAs with solar and biomass plants, with a generation capacity of around 13,800 MW, after 2007.

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

PSPCL has already issued notice to TSPL by imposing a penalty, but as the PPAs are “one-sided”, the penalty imposed will be “very meagre” in comparison to the losses suffered.

As per provisions of the PPAs, it is not compulsory for the IPPs to supply power during peak summer and paddy sowing period and taking advantage of “loopholes” in PPAs, the IPPs are claiming full fixed charges from the PSPCL by supplying power in the off-season when the state requires the least.

The chief minister pointed out that to meet the deficit resulting from the failure of TSPL (1,980 MW) to meet the state’s critical power requirement in the ongoing season, PSPCL had to purchase short-term power by spending Rs 886 crore, besides being forced to utilize full power from the central sector generating stations.

Meanwhile, Congress MP Partap Singh Bajwa in a tweet said the chief minister’s announcement of directing PSPCL to cancel or revisit all “one-sided” PPAs “should have been the first action taken in 2017”.

“I hope that the PSPCL will act quickly to ensure these unfair agreements are handled at the earliest,” Rajya Sabha MP Bajwa said.

Source : PTI