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PSPCL to shut its thermal units for six months; says cheaper to buy electricity from private firms

The PSPCL says it has been unable to find any buyers for their surplus power and hence took the decision to shut the plants.

Written by Raakhi Jagga | Ludhiana | Updated: September 25, 2016 5:21:41 am
punjab state power corporation, punjab state power corporation shut down, pspcl buyers, pspcl news update, india news, indian express, PSPCL employees at a dharna. (Express Photo)

Claiming to be a purely “commercial” company, the Punjab State Power Corporation Limited (PSPCL) has issued a circular saying there is no need to run its own thermal plants from October 2016-March 2017. It has also indicated that the thermal plants are supposed to remain shut from October-December next year.

There are a total of 14 units in these thermal plants with a generational capacity of 2,560 mega watts (MW) of power. Instead, the corporation is buying power from private thermal plants operational in Talwandi Sabo, Rajpura and Goindwal Sahib. The PSPCL is liable to purchase from private thermals for 25 years as per the agreement signed before commissioning of these thermals. The full generation capacity of these thermals is, however, 3,870 MW – much more than that of government-owned thermals. PSPCL is making need-based purchases and pays fixed charges for the rest.

The PSPCL says it has been unable to find any buyers for their surplus power and hence took the decision to shut the plants. Apart from buying from private thermals, PSPCL is also purchasing power from the central pool so as to meet the daily need of power – ranging from 2,350 to 2,400 lakh units.

However PSPCL authorities are spreading this message wide – that private thermals are providing cheaper power ranging from Rs 2.20 per unit to Rs 2.40 per unit against their own thermals where average cost per unit is not less than Rs 3.50 per unit. “We cannot burden the consumer, so we are working like a commercial company purely. Where ever cheap power is available, we are buying it and hence are operating our own thermals as per need,” said K D Chaudhary, chairman and managing director, PSPCL.

Such explanations, however, have not gone down well with the employees working at these thermals.

Over 3,100 regular employees and nearly 4,000 contractual employees are working in these thermal plants. Even as the engineers’ body has been silent on the decision, other employees are staging protests against PSPCL under the banner of Guru Nanak Dev Thermal Plant employees federation, joint forum of PSEB employees’ front and contractual employees’ front.

Gursewak Singh, president of Guru Nanak Dev Thermal Plant employees federation, said, “From 2003-2007, the government had spent Rs 700 crore to upgrade Bathinda thermal plant which has four units. The department also has plans to overhaul the Ropar Thermal plant as well where six thermals each with generation capacity of 210 MW are operational. The department has plans to upgrade its generational capacity from 1,260 MW now to over 1,800 MW and when they need to shut the thermals for most of the year, do they really need to upgrade thermals or what is the need of spending crores? In other words, in order to favour private thermals, they are killing their own units. Such a decision has been taken for the first time by PSPCL.” He added, “If we don’t buy even a single unit from private thermals, we need to pay nearly Rs 2,700 crore as maintenance charges to the thermals per year: This is the public’s money which is being paid to a few private companies running thermal units.” Chaudhary, however, reasoned, “After calculating all expenses, I still save money when I buy from private thermals and hence I need to talk business and I need to look into the interests of consumers.”

Gursewak Singh said, “Apart from Rs 2.5 a unit rate of power purchase, PSPCL is paying Rs 1.40 per unit as minimum maintenance charges to private thermals for all those units, which they are not able to buy. So over all they are paying more. And PSPCL has their own allocation of coal mine in Chhatisgarh, but they are not keen to settle their legal dispute otherwise our cost of power generation will come down by Rs 1 per unit.”

Chaudhary, however, said, “The minimum charges have to be given as per agreement for unsold units. It ranges from Rs 1.20 per unit to Rs 1.40 per unit, but in our own thermal plants, we are also spending huge amount on salaries, administrative and maintenance charges. And if we work out everything, power from private thermals is much cheaper and hence we have to look for the best available option in market.”

It needs to be mentioned that though the order says shut down the thermal plants from October 2016-March 2017, but even now thermals are working at 30 per cent capacity because Punjab has no policy to sell its surplus power. And this is the reason that circular says that in April 2017, only 200 MW generation is needed out of all these thermals which have capacity to generate 2560 MWs. In May 2017, demand for generation is only 1,200 MW while for the first fortnight of June, thermals need to generate 1,700 MW out of total 2,560 MW capacity. From June 16-September-end thermals need to run to full capacity as it is paddy season.

Jaswinder Singh, general secretary of the employees federation, said, “So as per the circular, our own thermals need to run properly only for three-and-a-half months in a year. So we are concerned that the government has plans to shut down these thermals and shunt out employees as they are recruiting few contractual employees only in these thermals, though a number of regular employees are retiring every year.” Contractual employees, on the other hand, are worried that their contract will be over by November-end and hence looking at the letter, they may not be given extension for a few months.

K D Chaudhary, however, said, “The plan given above is a projected plan and it may change in case power demand increases, or some breakdown is reported in any of the thermal units from where we are buying power. So there is no need to panic.”

D S Bains, chairman, Punjab State Electricity Regulation Committee (PSERC), said, “We have given an annual revenue requirement (ARR) worth Rs 25,000 to PSPCL for current financial year and hence they to be within the ARR they need to watch consumers’ interest first of all and hence they are buying power from the cheapest source available. Their first loyalty is towards consumers and hence they have to abide by that. And as power demand in winters go down, so they have taken a decision not to generate power from their own thermals.”

Asked why PSPCL is unable to sell its surplus power, Bains said,”This is a valid point, but they need to have a strong marketing cell for the same and it has been recommended by PSERC to be extra attractive in selling power to energy deficit states such as Karnataka and Tamil Nadu.”


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