In poll year, big states go shopping for power while the small smile

With Lok Sabha polls due next year and more states gearing for Assembly polls, good governance is the buzz. Big states...

With Lok Sabha polls due next year and more states gearing for Assembly polls, good governance is the buzz. Big states, anxious not to annoy voters, are rushing to buy power from energy-surplus smaller states which, in turn, are raking in huge revenues to feed their infrastructure development schemes.

Himachal Pradesh Chief Minister P K Dhumal is getting to discover this new connect between power, electoral politics and innovation. His state, Dhumal says, produces 632 MW surplus power during the summer months (April-October) and runs into deficit in the winter.

For 2008-09, Himachal Pradesh floated a tender through Power Trading Corporation (PTC) for sale of 2,000 million units of power during the summer months. “The PTC kept a base price of Rs 5.83 per unit. Haryana, Delhi and Punjab decided to bid jointly and offered Rs 5.88 per unit while Rajasthan’s bid of Rs 7.00 per unit was rejected on technical grounds. The tender finally went to Uttar Pradesh which bid Rs 7.01 per unit,” Dhumal told The Indian Express. In short, Himachal Pradesh has earned nearly 59 per cent (Rs 1400 crore) of its annual plan outlay of Rs 2400 crore by simply selling power to the highest bidder.

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What Dhumal does not say is that after losing the tender, the Rajasthan government made a fervent plea to the Himachal government, saying it needed power as 2008 is an Assembly election year. Punjab dumped fellow tender-allies Delhi and Haryana and requested the BJP government for additional power.

The BJP government in Rajasthan has been promised additional power by Himachal and NDA ally Parkash Singh Badal has already signed an agreement with Dhumal that allows Himachal Pradesh to supply free 300 MW power to Punjab during the summer months while the same will be returned once the winter sets in. Delhi and Haryana were left high and dry as the line taken by the Haryana power minister did not cut ice with Dhumal.

But Himachal Pradesh is not the only beneficiary. West Bengal under Buddhadeb Bhattacharjee is expected to sell around 400 million units of surplus power between June 10 and December 31, raking in some Rs 150-200 crore. The tender, floated through PTC, was opened on June 5. The West Bengal government has surplus power for nearly 7 hours at night which it sells to the highest bidder.

“Earlier, it was Goa which wiped off its revenue deficit by selling power to the tune of Rs 110 crore. The new examples now are Himachal Pradesh, West Bengal and Chhattisgarh… We have built up capacity of 10,500 MW through 27 long-term power purchase agreements with states,” Tantra Narayan Thakur, CMD of PTC, told The Indian Express.

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These states are followed by Tripura, Chhattisgarh, Delhi (only NDMC), Tamil Nadu and even Kerala. Tripura trades 25-30 MW of power — it earned Rs 71 crore last fiscal; Chhattisgarh generates surplus on day-to-day basis — it sold more than 100 MW at Rs 7.40 per unit.

But New Delhi’s NDMC earns full points for innovative trading. It has traded 50-150 MW on day-to-day basis and pockets some Rs 55 crore by supplying power only at night. Though saddled with naptha-fired Kayal and Kochi power plants, Kerala sells power between 100-250 MW to minimize operational losses as naptha is costly. Tamil Nadu sells some 100 MW by collecting surplus during night in the monsoon months and on weekends.