Private power cos mint money, but Mahavitaran bleeds
Private power cos mint money, but Mahavitaran bleeds
Published: Tuesday, Jan 10, 2012,
By Rajiv Ranjan Singh | Place: Mumbai | Agency: DNA

The ongoing tussle between Maharashtra Generation Company (Mahagenco) and Western Coalfields is forcing distribution major Mahavitaran to source electricity at much higher rates from private producers.

Call it abdication of responsibility, sheer apathy or whatever you will — after all, it’s the taxpayer’s money that is at stake — it is ironical that two government agencies are sparring, leaving a third bleeding and the private players lauging all the way to the bank.

The trouble started when Mahagenco, in July 2011, abruptlydecided not to lift its coal quota from the Washery circuit.

The refusal to pick up its share has led to over 3 lakh tonne of coal lying unused at pitheads of Western Coalfield Ltd mines since August 2011.

This has led to an artificial coal shortage at Mahagenco’s power plants, denting its generation capacity by at least 500-600 mw per day.

To make up for the shortage, Mahavitaran, the state power distribution company, which distributes electricity to all parts of Maharashtra except Mumbai, is buying around 650 mw of costlier power from private power generators at a huge loss to the state exchequer.

Under normal circumstances, during the winter, Mahagenco was supplying 4,700-4,800 mw thermal power everyday to Mahavitaran at a monthly billing of around Rs700 crore, said an official from the finance department of Mahagenco.

“Mahavitaran is getting 1,000 mw less power from Mahagenco power stations and two NTPC plants. To overcome the power shortage, we have invited a short-term power purchase tender of 900 mw in November,” said Ashok Chavan, chief general manager, Mahavitaran.

Through this tender, Mahavitaran is buying 748 mw of power from seven private power producing companies and the government-controlled Power Trading Corporation for four months from December 2011 to March 2012. Jindal Steel and Power and JSW Energy have bagged the lion’s share of 200 mw and 275 mw, respectively. “All power purchase agreements (PPA) are done between Rs4.25-4.45 per unit. On the other hand, the PPA between Mahagenco and Mahavitaran is a long-term contract and costs between Rs1.50-3 per unit,” said Chavan.

He, however, was tight-lipped about the peculiar situation where the tax payer’s money is being spent on buying costlier power.

Strangely, in power exchanges like IEX, the average power sold in December was a little above Rs3.50 per unit, which is almost `1 per unit less than the short-term power purchase carried out by Mahavitaran.

If a 100-mw plant runs for 24 hours, then it produces 2.4 million units of electricity. Most private power plants in India run at a plant load factor (PLF) of 80%. Thus, an efficient 100 mw plant will produce approximately 1.9 million units of electricity everyday. In other words, 700 mw of power purchase at a differential rate of Rs1 would cause a loss of nearly Rs1.3 crore everyday to the state exchequer.

These figures are approximations as none of the Mahavitaran officials were ready to come on record as to the accurate
billing amount and units purchased.

DNA did get to hear comments like, “these assumptions are ridiculous because power plants do not operate 24 hours a day etc.”

But the fact remains that power is being bought at a higher rate.
Even if less power is purchased to offset these billing costs, it will plunge many parts of the state into darkness due to long hours of load-shedding.

When DNA contacted Ajay Mehta, MD, Mahavitaran, he said, “I do not want to give any quote and you are free to write what you want.”

Interestingly, Mehta was the MD of Mahagenco in 2008-09 when washery operators got the renewed washing coal contract at rates which were almost three times the previous contract. And now, the coal sourcing through washery sector has become a bone of contention, with the same Mehta at the helm of affairs of Mahavitaran.