Same terms for MSEB as Enron 8212; Grahak Panchayat

PUNE, Feb 22: Expressing serious misgivings over the favourable terms granted to the Enron Power Project in its Power Purchase Agreement ...

PUNE, Feb 22: Expressing serious misgivings over the favourable terms granted to the Enron Power Project in its Power Purchase Agreement PPA, the Grahak Panchayat has urged the Centre to support the Maharashtra State Electricity Board MSEB to the same extent as the terms granted to Enron. If this was not possible, they urged the Government to renegotiate the price before the financial closure of the second phase, expected in the next 30 days.

Suryakant Pathak, State convenor of Grahak Panchayat and Jayant Deo, who is an energy and power expert, have decided to take up this cause after Union Power Minister P R Kumaramangalam8217;s admission that the PPA signed with Enron Power Project may have favoured the multinational.

The commercial induction of the first phase of Enron, estimated at Rs 4300 crore and which will generate 800 MW of power, is expected in the next few days. Pathak said that a decision on the finance required for the second phase, which envisages adding 1650 MW of power at a cost of Rs 6000crore, is expected to be taken by March 1, 1999.

Deo quoted the report of the Comptroller and Auditor General of India for the year ended March 31, 1997, where comparisons were made between PPAs entered by MSEB with Dabhol Power Company DPC and Reliance Patalganga Power Private Limited RPPPL. The report pointed out that the expected cost of power from DPC and RPPPL is Rs 4.69/kwh and Rs 3.71/kwh respectively in March 2001, as against the expected average realisation of only Rs 2.40/kwh in 1995-96 and the Compound Annual Growth Rate CAGR of eight per cent over five years. Compared to the price agreed for Reliance power, the Enron cost works out to only 98 paise per kwh, he said.

Moreover, MSEB is committed to purchase power at 90 per cent Plant Load Factor PLF. However, the board has planned to absorb power only at 80 per cent PLF during slack hours, Pathak said. This would further increase the cost/kwh of power, as all the tariff projections were made by MSEB at 90 per cent PLF. With a number ofcompanies opting for captive power plants and the recession factor, Deo explained that despite the commitment made by MSEB, only 12 hours of power would be actually consumed.

With major structural adjustments expected in the power sector in the next few years, Pathak felt that the Centre should pitch in and take a stance before the re-negotiations are complete. Pathak will also write to the MLAs on this issue.