The PSEB had carried out competitive bidding for the Talwandi Sabo thermal power project
PSERC admits plea against extension units

DP correspondent

Patiala

The Punjab State Electricity Regulatory Commission (PSERC), on Tuesday, admitted a petition against the setting up of extension units at Talwandi Sabo and Rajpura thermal plants by Punjab government through an MoU. It issued a notice to the state government and the Punjab State Power Corporation Limited (PSPCL).

Gurnek Brar, a retired Punjab State Electricity Board superintending engineer, had petitioned before the PSERC that the extension to set up additional units at thermal projects awarded under competitive bidding could not be given through the MoU route. The Punjab State Electricity Board had carried out competitive bidding for the 3x660 MW Talwandi Sabo thermal power project and awarded it to the lowest bidder. A power purchase agreement was signed on September 1, 2008, and the PSERC approved and adopted this competitive bid rate of Rs 2.8643 per unit in January 2009.

Similarly, after competitive bidding for 2x660 MW Rajpura thermal power project, L&T Power Development Ltd’s bid of Rs. 2.89 per unit was accepted.

A power purchase agreement was signed in January 2010.

In June 2010, the state government notified the power generation policy. Under the provisions of this policy the Punjab State Power Corporation Limited signed an MoU in July 2010 with Nabha Power Ltd for setting up an additional unit of 700 MW at Rajpura. Similarly, the PSPCL signed an MoU in October 2010 with Talwandi Sabo Power Ltd for setting up one additional 660 MW unit at Talwandi Sabo.

The action of the PSPCL cannot be justified on the grounds that an extension unit would use common facilities of the main project and thus give cheaper generation because of lower cost per MW.

However, the developer has been allowed to sell 85 percent of the capacity as merchant power. Under the MoU, 10 percent of the power from new units would be sold to the PSPCL at the bid rate of the main project and 5 percent at fuel cost.