Financial Daily from THE HINDU group of publications
Friday, Dec 20, 2002
Industry & Economy
PPAs with gas-based producers opposed
HYDERABAD, Dec. 19
REPRESENTATIVES of various political parties and non-government organisations have opposed the power purchase agreements (PPAs) between the Transmission Corporation of Andhra Pradesh (APTransco) and the four gas-based independent power projects at a public hearing held here on Thursday by the Andhra Pradesh Electricity Regulatory Commission (APERC).
They argued that APERC should not give its consent to the PPAs, particularly in the absence of the Gas Authority of India Ltd (GAIL) specifying the quantum of gas available in the Krishna-Godavari basin up to 2020.
The PPAs, submitted by APTransco to APERC for the latter's consent, were to be effective for 15 years from the commercial date of operations of the IPPs.
Earlier, GAIL's General Manager, Mr S.K. Das, told APERC that gas availability projections up to 2020 were not available. Emerging sources could be the key indicators for long-term profile in this regard. Similarly, he said GAIL was unable to predict gas prices, which were likely to be market-driven based on demand-supply and evolved within a period of next one to two years.
On the other hand, APTransco had pleaded for approval of the four IPPs stating that an additional 5251 MW of power would have to be generated from 2002 to 2007 to meet the growing demand for power.
APTransco emphasised the need for a revised power procurement plan in the light of the decline in hydel power generation in the State due to the construction of upper Krishna reservoirs such as Almatti in Karnataka.
If there were any delays in the implementation of the IPPs "due to financial closure or other reasons, the projected capacities cannot be achieved", APTransco Joint Managing Director, Mr Dinesh Kumar, told APERC.
The four gas-based IPPs with which the APTransco entered into a PPA were Vemagiri Power Generation Ltd, Konaseema EPS Oakwell Power Ltd, Gautami Power Pvt Ltd and GVK Extension Project. APTransco had signed PPAs with the first three IPPs on March 31, 1997.
The Congress Legislator, Dr M.V. Mysoora Reddy, said that the IPPs could not be termed as short gestation projects when they could not be executed even after five years since the signing of PPAs. He wondered why APTransco could not call for fresh bids for establishing short gestation power projects. The CPI leader, Mr S. Sudhakar Reddy, also opposed clearing of the four projects and wanted the APTransco to call for fresh bids.
The State Secretary of the CPI (M) did not agree with APTransco's load forecast and alleged that the State Government was trying to clear the power projects before gas prices increased substantially.
Several others also opposed the PPAs stating that they were detrimental to the interests of the consumers.
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