BJP in dock over sale of power outside HP
Rakesh Lohumi
Tribune News Service

Shimla, February 3
After its questionable decision to allow independent power producers (IPPs) to enhance generation capacity of the already allotted projects, the BJP government is in the dock for permitting the favoured companies to sell power outside Himachal Pradesh at the cost of state’s vital economic interests.

The clause of “first right of refusal” has been diluted in the implementation agreements (IA) signed with nine companies as a result of which they would be able to sell 75 per cent of the power generated bypassing the regulatory regime, which cannot be allowed for projects allotted through the MoU (memorandum of understanding) route.

Under the national hydropower policy even for the projects allotted through competitive bidding only 40 per cent mercantile power is allowed and the rest 60 per cent has to be sold at tariff determined by the concerned electricity regulatory commission. If the project is not completed within four years the quantum of mercantile power is reduced by 5 per cent for delay of every six months. No mercantile power is allowed for a project completed in 8 years or more.

While the IPPs will supply entire 15 per cent free power during winter from November 1 to March 31, the “first right of refusal” by the state electricity board has also been restricted to winter months in the IAs. They will be free to sell power through bilateral arrangement to anyone for the remaining seven months when 75 per cent of the total power is generated. Such an agreement appears to be scandalous as the Centre gives subsidy ranging from Rs 7 crore to Rs 17 crore depending on the capacity. The objective was to encourage states to exploit these for the benefit of the local people and provide power at reasonable rates.

Further, the government will be at a loss, as it has to supply free power to the board at the rate of Rs 3.04 paise per unit fixed by the regulator during winter when the state faces shortage. Whereas during summer it sells power at Rs 7.01 paise per unit. With all power supplied during winter it will have no power to sell during summer and IPPs will get the benefit. There is no point in restricting the “first right to refusal” to winter as the board could always refuse it anytime if power is not required.

Engineers of the board point out that the only objective behind the dilution of the clause is to allow the benefit of mercantile power bypassing not only the regulatory regime, but also the competitive bidding route. In similar projects offered through competitive bidding route the IPPs had quoted up to 38 per cent free power whereas the government allowed the favoured companies to enhance capacity up to 25 MW from 5 MW by taking just 15 per cent free power.