The Punjab State Power Corporation Limited (PSPCL) will have to pay charges for installation of pollution control devices at two private thermal plants — Talwandi Sabo Power Limited (TSPL) at Bannawali in Mansa and Nabha Power Limited (NPL) in Rajpura. The PSPCL was asked to pay the charges for installation of flue gas desulphurization (FGD), selective non-catalytic reduction technology (SNRC) and water treatment system after it lost a case at the Appellate Tribunal for Electricity. The outcome of the case exposes yet another loophole in the power purchase agreements with private thermal plants.
Sources said that given the capacity of these thermal plants, it is likely to cost PSPCL Rs 3,000 crore. As PSPCL is already in losses, it could lead to another tariff hike. TSPL has a generation capacity of 1,980 MW and it was commissioned in 2013, while NPL has a capacity of 1,400 MW and it was commissioned in 2014.
The technologies mentioned in the Tribunal’s order have to be installed to control emissions of nitrogen dioxide, sulphar dioxide and to reduce water consumption of power plants.
The Centre had issued instructions for their installation in December 2015. As Mansa and Rajpura thermal plants are both private, PSPCL had so far argued that they were supposed to install them on their own. But private thermal plants had contested this claim before the Tribunal and challenged validity of a December 2018 order of Punjab State Electricity Regulatory Commission (PSERC) which stated that private thermals were to comply with Centre’s orders. Both TSPL and NPL in their appeals filed before Tribunal stated that the expenditure related to FGD, SNRC and water treatment plant was not factored in the cut-off date under the competitive bidding guidelines of June, 2008.
Settling both cases in its order of August 28, the Tribunal stated: “As per principle of law, the affected party has to be compensated for a change of law (Supreme Court judgment dated 25.02.2018) along with carrying cost from the effective date till the date of approval. The respondent is directed to devise a mechanism for payment of above by procurers to both the appellants towards additional cost and their expense in relation to procurement, installation, commissioning, operation and maintenance of FGD as approved by the concerned authority, after prudence check. Appellants are entitled for carrying cost in terms of provisions of PPAs to bring seller-appellants to the same economic position as if such Change of Law has not occurred.”,
Recently, a Rs 30 paise per unit coal washing charge was given to private thermals which had caused Rs 1400 crore one-time charge to PSPCL. This is being recovered from consumers in terms of `surcharge’ in their power bills. Meanwhile, PSPCL had lost this case in August, 2019.
When contacted, A Venuprasad, chairman and MD of PSPCL, said, “We will examine the orders and do the needful. The government of India has ordered the installation of FGD to reduce pollution.”