The power distribution companies (Discoms) in Telangana suffered huge losses to the extent of ₹6,000 crore due to signing of power purchase agreement by the previous Bharat Rashtra Samithi (BRS) government in the state with Chhattisgarh government in 2015, people familiar with the matter said on Tuesday.
The Telangana northern power distribution company limited (NPDCL) and the Telangana southern power distribution company limited (SPDCL) made submission to this effect before the judicial commission headed by retired chief justice of Telangana high court justice L Narasimha Reddy last week.
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The judicial commission was constituted by the Congress government in March to inquire into the alleged irregularities committed in the power sector, including purchase of 1000 MW of power from Chhattisgarh, by the previous BRS government.
BRS president and former chief minister K Chandrasekhar Rao, in his hard-hitting letter to the commission, not only defended his decision to purchase power from Chhattisgarh, but also questioned the locus standi of justice Reddy in conducting the probe. He demanded the retired judge to step down from the commission.
However, the two Discoms debunked KCR’s argument that the power purchase agreement (PPA) was signed after taking the approval from the Telangana state electricity regulatory commission (TSERC) and that it was justified to meet the power shortage in the state.
As per the KCR government’s decision, the two power utilities signed the PPA with the Chhattisgarh state power distribution company Ltd (CSPDCL) on September 22, 2015 for procurement of 1,000 MW of power from the 2×500 MW thermal power station situated at Marwa in Janjgir-Champa district.
A senior official of Telangana power transmission corporation privy to the development said, on condition of anonymity, that the Telangana government had not taken the final approval from the TSERC for the PPA that was signed with Chhattisgarh.
“In 2017, the TSERC had given only an interim order, approving the purchase of power at a tentative rate of ₹3.90 paise per unit, fixed by the Chhattisgarh power regulatory commission. But till date, the final PPA did not get approval of the TSERC,” he said.
The power purchase from Chhattisgarh commenced in 2017 and continued till 2022. “But Chhattisgarhnever supplied 1000 MW to Telangana regularly. In the initial years, it was only around 700 MW and by 2022, the supply was as low as 200 MW,” the official said.
Between 2017 and 2022, Telangana Discoms purchased 17,996 million units (MU) of electricity from Chhattisgarh, for which they paid ₹7,719 crore and an amount of ₹1,081 crore is still pending payment.
“But Chhattisgarh claimed that the dues from Telangana were to the extent of ₹1,715 crore, as it added other overhead expenses to the overall cost of power supply. The matter was escalated to the Chhattisgarh Electricity Appellate Tribunal for arbitration,” the official said.
Moreover, additional costs such as transmission line charges of ₹1,362 crore have pushed the effective per-unit cost up to ₹5.64, resulting in an unexpected burden of ₹3,110 crore, which was beyond the initially projected expenses.
The Telangana Discoms brought to the notice of justice Reddy commission that due to irregular supply from Chhattisgarh, they were forced to buy power in the open market to meet the demand. This resulted in the additional burden of ₹2,083 crore on the Telangana government between 2017 and 2022.
Another factor that added to the huge losses to the Telangana Discoms was the BRS government’s decision to take on lease a transmission corridor from Power Grid Corporation India Ltd (PGCIL) for the supply of 1,000 MW of electricity from Chhattisgarh.
As per the agreement, Discoms had to pay transmission charges to PGCIL regardless of whether the electricity was supplied or not. Due to this, Discoms incurred additional charges of ₹638 crores.
The Telangana government had also incurred an additional loss due to the hasty booking of additional power corridor that can transmit another 1,000 MW of power. Though Telangana cancelled this booking after realising that there was no possibility of getting additional 1,000 MW from Chhattisgarh, PGCIL issued notices to Telangana Discoms to pay ₹261 crore as compensation for abrupt cancellation of additional corridor.
Senior electricity engineer and chairman of Telangana electricity employees’ joint action committee K Raghu said the KCR government had arbitrarily signed an MoU with Chhattisgarh to purchase 1000 MW of power, without bothering to go in for open bidding.
“This has caused huge loss to Telangana power Discoms and an irreparable damage to the power sector in the state. We have asked the Justice Reddy commission to probe the reasons behind this unilateral agreement,” Raghu added.
