Power deal with Chhattisgarh to cost Telangana more Rs 1,050 crore

Hyderabad: Power sector experts said Telangana discoms’ 1,000-MW deal with Chhattisgarh would lead to an additional burden of over Rs 1,050 crore on consumers in the state every year.

The power purchase agreement runs for 12 years, which would mean a total burden of Rs12,600 crore over the period.

Experts and representatives of political parties faulted the TS discoms for taking the MoU route, instead of opting for competitive bidding. Because of this, the state may have to pay nearly `6 per unit to Chhattisgarh against Rs 4.15 per unit that it was paying Thermal Power Tech in a deal secured through the bidding process.

At a public hearing on Thursday, experts urged Telangana State Electricity Regulatory Commission Chairman Ismail Ali Khan and members L. Manohar Reddy and H. Srinivasulu to reject the PPA and spare consumers of higher tariff.

Mr K. Raghu, coordinator of the Telangana Electricity Employees Joint Action Committee, said the government had claimed the state would become power surplus by 2018-19. If that was so, the 12-year tenure of the PPA with Chhattisgarh was not justified.

TS Discoms need approval from the Central Transmission Utility for transmission of power from Chhattisgarh through the Wardha-Maheshwaram line. The 4,200-MW line would be partially complete in two years and completed by 2022. TS may be allotted limited transmission corridor as Tamil Nadu has already applied for significant capacity, he pointed out.

“Direct the TS Discoms to go for competitive bidding for purchase of power, if procurement from Chhattisgarh results in additional financial burden,” Mr Raghu told the commission.

Mr M. Venugopala Rao of the Centre for Power Studies said long-term PPAs should be entered with the power generator through competitive bidding, and not with the middleman, the discom, through an MoU.

He asked the commission to direct the TS discoms to make public the power load forecast plan.
He said the 1,000-MW deal was part of the state’s plans to be power surplus by 2018-19 with 24,000 MW capacity addition.

Replying to concerns raised by experts and representatives of political parties, he said the state needs the power to ensure 24×7 supply and nine-hour power to the agriculture sector.

On the fixed costs, he said the TS discoms would pay for the CTU-approved corridor transmission capacity. TS discom will submit the load forecast along with annual revenue returns.

TSERC chairman Ismail Ali Khan and members L. Manohar Reddy and H. Srinivasulu told the experts that a PPA agreement was mandatory to seek long-term open access from the CTU on the Wardha-Maheshwaram line.