Ap Agrees To Open Escrow Account In Ntpc'S Favour

The power purchase agreement between National Thermal Power Corporation and the Andhra Pradesh State Electricity Board has assumed significance as Andhra Pradesh has agreed to open an escrow account in favour of NTPC.

The state has also agreed to open an irrevocable letter of credit to cover the full amount of monthly bills to be raised by NTPC. Finally, the Andhra government has agreed to stand guarantee for the regular payment of NTPC's power bills.

As per the agreement for round-the-clock supply of 150 mw of power from NTPC's eastern region power stations the corporation has started the supply from Friday.

This is the first instance of NTPC signing an agreement to supply power from its plants to a state outside the region. AP does draw its share of 580 mw of NTPC power from the Ramagundam power station in the southern region.

NTPC had been insisting on a guarantee from the Reserve Bank of India which would enable RBI to adjust NTPC's dues against Andhra's central plan assistance. But then, even an escrow account should be good enough to guarantee payment.

The agreement will be valid for one year and can be renewed. The 150 mw of supply to APSEB is being made from the unallocated 15 per cent generation of the three NTPC power stations in the eastern region. APSEB will draw 50 per cent of the unallocated supply from the Talcher station subject to a maximum drawal of 75 mw.

It will draw a maximum of 45 mw which is 30 per cent of the unallocated share from the Kahelgaon power station. There will also be a supply of a maximum of 30 mw which is 20 per cent of the unallocated share at the Farakka power station.

The significance of the different levels of allocation is that Andhra will have to buy the costliest power. Talcher being the latest power station, fixes the highest rate of tariff. Kahelgaon comes next while Farakka being the oldest station offers the lowest tariff.