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Thursday, September 23, 2021

Punjab Power Mess: PSPCL purchased power without getting pacts approved by regulator

Documents accessed by The Indian Express reveal that the PSPCL has not been taking the mandatory approval of Punjab State Electricity Regulatory Commission (PSERC) before signing the PPAs since 2005 and in last 10 years has purchased power worth Rs 465 crore.

Written by Man Aman Singh Chhina | Chandigarh |
July 30, 2021 9:42:59 am
Amarinder had appointed Lt Gen Surinder Singh in August 2019. He completed his tenure in July this year.

At a time when Chief Minister Capt Amarinder Singh has directed the Punjab State Power Corporation Limited (PSPCL) to examine all the Power Purchase Agreements (PPAs) signed with private power producers and cancel them if required, it has come to fore that the state utility has been signing pacts and purchasing electricity worth several hundred crores from new and renewable energy sectors without the agreements having been approved by the state power regulator.

Documents accessed by The Indian Express reveal that the PSPCL has not been taking the mandatory approval of Punjab State Electricity Regulatory Commission (PSERC) before signing the PPAs since 2005 and in last 10 years has purchased power worth Rs 465 crore. In several cases post facto approval of PPAs was taken from PSERC in delays ranging from six months to 11 years. In more than a dozen PPAs, the approval of PSERC was still awaited after a delay of nearly two years to 12 years. However, the purchase of electricity continues unabated even without the mandatory approval.

Had these purchase agreements been submitted in time to the PSERC, there would have been ample opportunity for the regulator to raise the red flag on any lopsided PPA signed by the PSPCL and prevent the loss to the state exchequer. The delay in getting the approval of PSERC took place during the previous SAD-BJP government and continued under the current Congress government in the state.

PSPCL had signed 14 PPAs with thermal/hydro and 122 long term PPAs with solar/biomass plants after 2007 to make the state power surplus with generation capacity of around 13,800 MW.

An audit report has revealed that there were 66 PPAs of New and Renewable Source of Energy for 778.09 MW signed by PSPCL during the period March 2005 to May 2019. Out of these, PSPCL did not obtain prior approval of PSERC before signing 50 PPAs.

Further, in violation of provisions of the Electricity Act and PSERC Regulations, post facto approval of the power regulator to 37 PPAs was obtained during November 2010 to December 2020, after a delay ranging between six months and 11 years. Further, in remaining 13 cases, period of more than two years to 12 years had already elapsed but approval of the PSERC was still awaited till December 2020.

It has been found that against these unapproved PPAs, total power of 108.58 MUs valued at Rs 465.31 crore was purchased during the period 2010-11 to 2019-20.

The Electricity Act, 2003 provides that the state regulatory commission shall regulate the process of purchase and procurement of electricity by the distribution licensees, including the price at which electricity shall be procured from the generating companies or other sources through agreements for purchase of power for distribution and supply within the state.

PSERC (Conduct of Business) Regulations, 2005 states that PSPCL shall not enter into a contractual commitment of such long term power purchase till the PSERC approves the procurement of electricity.

The Chief Minister has asked PSPCL to examine all the PPAs signed by the erstwhile SAD-BJP government with various Independent Power Producers (IPPs), which were established basically to meet the power demands of the state during paddy sowing and summer season. He has also directed the power corporation to terminate/revisit all lopsided PPAs that are not beneficial to the state.

 

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