PPA termination will create power crisis in state: Punjab power utility

Punjab State Power Corporation Limited (PSPCL), in reply to a letter sent by the state government, has claimed that termination of power purchase agreements (PPAs) with independent power purchasers (IPPs) will lead to a power crisis in the state.

PPAs have been blamed for high electricity tariffs in the state. Now, the view of the Punjab’s sole power distribution company could trigger a fresh round of criticism for Punjab chief minister Amarinder Singh and the Congress government in the state.

The PSPCL has issued the reply after Punjab principal secretary (finance) K A P Sinha had, in a communication in December last year, pressed for a need to revisit PPAs while pointing out the high cost of power fixed by private thermal plants, or IPPs. The principal secretary said the agreements were burdening Punjab consumers with Rs 1,000 crore annually on an average.

However, in the reply, PSPCL said the state’s energy requirement for 2019-20 remained at 56,547 MUs, of which the contribution from the state’s three IPPs remained at 17,761 MUs, or 31.4% of the total demand.

“Thus, without contribution from IPPs, the demand of Punjab could not have been met,” reads the letter.

ET Energy World
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