Adding a new twist to the interstate power generation dispute, the Telangana government has decided to forgo its stated share of electricity in APGenco-owned 1,600 Mw Krishnapatnam power project and had informed the same to the Southern Region Load Despatch Centre recently.
While the move looks strange considering the power-deficit status of Telangana, people in the know said the government had taken a critical view of the entire power sharing arrangement after doing a cost-benefit analysis.
The issue of power became a major bone of contention between the two states soon after bifurcation when the AP government turned down Telangana’s claim over Krishnapatnam project as well as the 1,050-Mw Hinduja project in Visakhapatnam.
While Telangana argued that these two plants were also part of the arrangement of sharing on a 54:46 basis as prescribed by the central government under the AP Reorganisation Act, 2014, AP said there were no valid power purchase agreements (PPAs) to back these claims.
The first hint of a change in government’s thinking came earlier this year when Telangana chief minister K Chandrasekhar Rao declared in the Assembly that they would not take power from AP in protest of their refusal to share from Krishnapatnam.
There is an average 50-60 paise per unit difference in the cost of power generation between the plants of AP and Telangana and the latter would end up paying more if it depends on AP for a long time, a senior official of Telangana Genco said giving out reasons behind the government’s move.
Under the sharing arrangement, Telangana has to give 46 per cent power from its plants to AP while the latter has to give 54 per cent from its plants to Telangana at a price fixed at their end. This will increasingly work in favour of AP as it gets cheaper power from Telangana, which is adding substantial capacity in the next couple of years, the officials said.
“It is true that the cost of generation is higher for thermal power plants located in AP because of the coal transport costs. The coastal Krishnapatnam plant is designed to use imported coal, which is expensive. Whereas the power plants in Telangana are located closer to the source of coal, that is Singareni Collieries,” K Balaram Reddy, former chairman of erstwhile AP Electricity Board , said.
However, he added Telangana power utilities could pool the power and even sell it to other states instead of forgoing their share in AP plants. According to an estimate, the supply-demand gap would increase to 2,000 Mw from the present 1,000 Mw in Telangana if the two states decide to end the sharing arrangement.
“As Telangana is adding a substantial capacity, including 2,200 Mw by early next year, we would face problems only in the short-term if the state chooses to pull out of the power sharing arrangement. If the government can handle the situation carefully in this intermittent period, the advantage of pulling out of the power pact would far outweigh the short-term difficulties,” K Raghu, coordinator of the Telangana Electricity Employees Joint Action Committee, said.
In addition to buying power at a high cost from AP plants during their long PPA period, the existing arrangement will also act as a disincentive to go for more capacity addition in Telangana, Raghu argued.
When contacted on the Krishnapatnam issue, TS Genco chairman and managing director D Prabhakar Rao said AP discoms had already excluded these plants from the power sharing list in their filings to the AP Electricity Regulatory Commission earlier this year. “We will follow the government policy on power sharing issue,” he said citing chief minister's statement made in the Assembly.
The Centre had appointed a Central Electricity Authority-headed committee to resolve the power sharing issues of both the states. Telangana was yet to make its fresh stand officially known to the committee.
