PUNJAB STATE Power Corporation Limited shutting down own generation plants and buying power from traders and from unscheduled interchange (UI); making unjustified and excess payments; not availing of rebate and incurring losses due to non-functional micro-hydel projects have cost electricity consumers in Punjab an extra burden of nearly Rs 1,428 crore, revealed a Comptroller and Auditor General audit of PSPCL for 2013-2016.
The report was tabled in the Punjab Assembly on Wednesday, the last day of the session. It said PSPCL has made a total of Rs 2,249.61-crore excess payment of which Rs 1,427.84 crore was passed to consumers.
In the report, CAG observed that increase in requirement of power for 2013-16 was met “almost exclusively” by purchasing power from private producers while the company’s own generation had decreased.
“The reason for under-utilisation of thermal plants was stated to be “no demand/units stopped as per instructions of Power Controller, Patiala”.
Referring to PSPCL thermal stations’ plant load factor (PLF) – which is the ratio between actual generation and maximum possible generation at installed capacity – the report pointed out that at a time when the PSPCL thermal stations were having sufficient generation capacity to meet requirements fully or partially, power was purchased from outside at higher rates, causing an “avoidable extra expenditure of Rs 183.25 crore on short-term purchase of power”.
The report also pointed out that there was a drastic reduction in generation from 2013 to 2016 compared to the average generation in the preceding five years, 2008-2013, in all the three thermal plants of PSPCL in Bathinda, Ropar and Lehra Mohabbat. Due to low generation, PSPCL had to pay Rs 260.48 crore extra after Punjab State Electricity Regulatory Commission determined Rs 182 crore and Rs 78 crore as disincentive for low power generation while hiking tariff for 2010-11 and 2011-12, respectively.
According to the report, for 2015-16, thermal plants in Bathinda, Ropar and Lehra Mohabbat had a power generation capacity of 93.75 per cent, 94.68 per cent and 91.68 per cent, respectively. However, the PLF for the three plants, respectively, was 22.73 per cent, 35.77 per cent and 38.79 per cent. There was a requirement of 51,057 million units of power in 2015-16 and as PSPCL’s own generation fell drastically, 39 per cent of power was purchased from the private sector.
The report further said that PSPCL also violated UI mechanism under which charges are imposed for deviating from scheduled generation or drawal. “The Company [PSPCL] made UI over-drawals in 21 months from 2013-14 to 2015-16 out of which during 16 months UI over-drawals were costlier than variable cost of own generation and/or short-term power purchase,” the report said.
CAG report said that for violation of UI mechanism, PSPCL will have to pay Rs 548 crore as UI charges. PSPCL, according to the report, did not make available figures of payments made on this account.
The CAG report further pointed out that PSPCL paid Rs 391.46 crore additional levy which it was not required to pay and was to be paid by a joint venture company with which PSPCL had entered into a joint venture agreement in March 2001 to help identify, develop and operate a cpative coal mine.
CAG report also noted that PSPCL, in a power purchase agreement with M/s Coastal Gujarat Power Limited, failed to notice a discrepancy relating to payment of Rs 766.78 crore as capacity charges and did not take up the matter to safeguard its financial interests.
The report also highlighted that a “rebate clause” was not incorporated in a power purchase agreement of PSPCL with a developer due to which PSPCL could not get a rebate of Rs 22.33 lakh despite making payment for the power purchase within the stipulated time of within a week. Moreover, PSPCL incurred losses worth Rs 28 crore due to non-completion/non-functional micro-hydel projects. The report even highlighted that due to non-enforcement of statutory regulations relating to security for electricity connection, a firm ran up arrears of Rs 53.66 crore as electricity dues towards PSPCL.
A payment of Rs 1.24 crore made to consultants, according to the report, ended being unfruitful with overall delay in execution of work as PSPCL could not identify deficiencies in detailed project reports and released payment without adequate scrutiny.