VIJAYAWADA: The All India Power Engineers’ Federation (AIPEF) has urged Chief Minister YS Jagan Mohan Reddy to withdraw the cabinet decision of handing over operation and maintenance (O and M) along with transfer of assets of Sri Damodaram Sanjeevaiah Thermal Power Station (SDSTPS) at Krishnapatnam in Nellore district to third party.
AIPEF chairman Shailendra Dubey in a letter to Chief Minister mentioned that the State passed a unanimous decision to oppose the Central government’s move to privatise Visakhapatnam Steel Plant, but on the other hand it has decided to hand over O and M of Krishnapatnam Thermal Station along with transfer of assets to third party for
25 years without considering the views of the stakeholders. This is contrary to the spirit expressed against the 100 per cent disinvestment of Vizag Steel Plant, he said.
He said the Cabinet stated that the variable cost of Rs 3.14/kWh of SDSTPS is high as compared with the variable cost of Rs 2.34/kWh of adjacent private power plants (TPCL). This type of comparison is not at all justifiable as most of the IPPs come under Design, Build, Finance, Own and Operate (DBFOO) mode through competitive case-1 bidding with certain provisions of the CERC regulations.
According to the CERC regulation for DBFOO competitive bidding process, “The bid for the Project shall, therefore, comprise the fixed charge and fuel charge, which shall be specified separately, and the bidder seeking the lowest tariff shall be the selected bidder. The base fixed charge shall not be more than 70 per cent of the tariff and the base fuel charge shall not be more than 50 per cent of the tariff”.
The APERC determined the project cost for an amount of Rs 1,0761.40 crore and approved the O&M cost/MW as per the CERC tariff regulations 2014-19 to fix the fixed charges and approved provisional variable cost of Rs 3.14/kWh for the financial year 2021-22.
Accordingly, the fixed cost of SDSTPS at 85 per cent PLF will be Rs 1.50/kWh, thereby the total unit cost will be Rs 4.64/kWh (Rs 3.14+Rs 1.50). But, the actual total unit cost at 85 per cent PLF will be Rs 4.40/kWh (Rs 2.90+Rs 1.50) by considering the average variable cost of Rs 2.90/kWh in the financial year 2021-22. The same can be shown as fixed cost of Rs 2.20/kWh and variable cost of Rs 2.20/kWh with the CERC regulation of DBFOO competitive bidding process.
“Hence, it is not correct to compare the two different tariffs, determined with different regulations. The LC mechanism (advance payment mechanism), low scheduling (backing down) will impact the variable cost and also the variable cost will vary from generator to generator based on designed parameters. At present, there is no LC mechanism to SDSTPS. So, if the LC mechanism is arranged to SDSTPS, the variable cost can be reduced by maintaining the sufficient coal stocks and also will run the units at no loss by maintaining the required normative availability,” he said.
As regards to the accumulated losses of around Rs 6,000 crore (including losses in project cost), Rs 3,000 crore loss incurred due to pending payments up to a certain period and then payments were not made in the stipulated time from Discoms as per the PPA and balance Rs 3,000 crore loss incurred due to delay in completion of the project, he said.
AIPEF chairman said the State-owned installed capacity of 6,610 MW (5,010 MW in service and 1,600 MW ready for commissioning) should be with APGENCO/APPDCL only. Otherwise the influence of the private players will increase in the power sector.
CERC regulation for DBFOO bidding process
The bid for the Project shall comprise the fixed charge and fuel charge, which shall be specified separately, and the bidder seeking the lowest tariff shall be the selected bidder. The base fixed charge shall not be more than 70% of the tariff and the base fuel charge shall not be more than 50% of the tariff