Telangana power firms lost Rs 6K crore due to Chhattisgarh PPA: Officials

As per the contract, the price per unit is only Rs 3.9. Yet, the purchase of this electricity has further worsened the financial condition of the state power companies.
Representational image
Representational image

HYDERABAD: Telangana electricity companies suffered a loss of around Rs 6,000 crore due to the power purchase agreement (PPA) with Chhattisgarh, according to state government estimates.

As per the contract, the price per unit is only Rs 3.9. Yet, the purchase of this electricity has further worsened the financial condition of the state power companies, sources said.

“So far Telangana has purchased 17,996 million units of electricity from Chhattisgarh. The disbursements made till now are Rs 7,719 crore. The dues to be paid to Chhattisgarh are Rs 1,081 crore. Transmission line charges are Rs 1,362 crore. If all these are calculated, the cost per unit is Rs 5.64. It seems that an additional burden of Rs 3,110 crore has been incurred,” they explained.

The dispute between the states is still unresolved in the matter of arrears. Telangana says that only Rs 1,081 crore is due, but Chhattisgarh power companies claim that the outstanding amount is Rs 1,715 crore. The Chhattisgarh firms have approached the Appellate Tribunal for Electricity and filed a complaint.

Official sources said power from Chhattisgarh has been made available since the end of 2017 but the supply was never smooth.

Due to this, Telangana discoms had to buy power in the open market. Hence, from 2017 to 2022, the additional burden was Rs 2,083 crore for buying power in the open market, officials added. 

On the other hand, in order to get power from Chhattisgarh, Telangana power companies had booked a corridor for the supply of 1,000 MW of electricity with the Power Grid Corporation (PGCIL), sources said.

As per the booking agreement, companies should pay the PGCIL regardless of whether the electricity is procured or not.

With this, additional charges incurred are Rs 638 crore. In addition to this, there was more loss due to the advance booking of the corridor for supply of another 1,000 MW. Telangana power companies cancelled this halfway as there was no possibility of getting electricity from Chhattisgarh. So, the PGCIL has issued notices to Telangana discoms to pay Rs 261 crore as compensation.

Meanwhile, sources said that the Telangana Electricity Regulatory Commission (ERC) has not yet given its seal of approval to this power purchase agreement. There is also a view in the government that all the money given to Chhattisgarh without the approval of the ERC should be treated as illegal payments.

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