Discoms in Punjab, Haryana argue against Parekh report

States allege report did not take concerns on board adequately

Power distribution companies in Punjab and Haryana which buy from Tata Power’s 4,000-Mw Ultra Mega Power Project (UMPP) at Mundra in Gujarat have argued against the Parekh committee report on allowing an extra compensatory rate for the supply from here.

In affidavits to the Central Electricity Regulatory Commission (CERC), the Punjab State Power Corporation Ltd (PSPCL), Uttar Haryana Vidyut Vitran Nigam and Dakshin Haryana Vidyut Vitran Nigam have said they can’t go along.

The recommendation, given in August, would burden them and their consumers, they have said. PSPCL has said the existing power purchase agreements (PPAs) must be adhered to and if the Parekh recommendations were accepted, it would lead to reopening of all PPAs signed by other generators, breaking the sanctity of the original bidding process.

The two Haryana discoms are understood to have asked for an unconditional option of non-procurement if the cost of purchase from Mundra UMPP exceeds a certain level. Tata Power did not respond to the development.

The discoms gave their in-principle consent to the report subject to the concerns raised but they have reservations on several aspects. The two discoms are also understood to have asked for the unconditional option of non-procurement of power in case the cost of purchase from Mundra UMPP exceeds a certain level.

A senior Tata Power executive said the company would respond to an e-mail questionnaire by Business Standard on the matter on Wednesday.

A senior official from CERC confirmed the regulator has received the two affidavits but added the concerns raised over the content of the report will not hinder the process of hearing in the case as “the utilities will have the option of taking up those issues with CERC which they think have been left unaddressed in the Parekh committee deliberations”.

CERC had last month asked five states which buy power from the Mundra UMPP and another project of Adani Power at the same location to respond to the Parekh recommendation. The panel had suggested a compensatory rate rise of 45-55 paise a unit, to make up for the losses due to a change in an Indonesian regulation that raised the cost of coal imported from there to run these two projects. These run on imported fuel and the bids to establish and operate the plants were offered on the assumption of a lower price.

The regulator had in April allowed the two companies higher tariffs to compensate for the losses arising out of a change in an Indonesian regulation that made coal costlier for the two imported coal-based projects of 4,000 Mw capacity each.