The Hindu : A power struggle of sorts?

Online edition of India's National Newspaper
Sunday, Feb 22, 2004

Andhra Pradesh

Andhra Pradesh

A power struggle of sorts?

By M. Malleswara Rao

HYDERABAD, FEB. 21. The CMDs of the Genco and the Transco, J. Parthasarathy and Rachel Chatterjee, have locked horns over the alleged discrimination being shown to the AP Genco. The issue figures at every public hearing held by the State Electricity Regulatory Commission (ERC).

The `unfair deal' in the present context seems to be the deletion of the Srisailam Left Bank Power House (SLBPH) by the Transco from its procurement plan up to 2007 without benefiting this 900-MW working station with fixed cost, denial of treatment to the undertaking on a par with private projects in key matters such as O&M costs, depreciation, plant load factor considered for incentive, and interest on working capital.

The Transco kept the efficiently-run Rayalaseema Thermal Power Station out of the purchase plan for 2004-05 on the plea that the cost of its power was higher and was wavering to pay interest on the funds kept by the Genco under PF and Pension trusts for disbursal of terminal benefits to staff.

A letter war is on between the CMDs who ironically work under one roof at Vidyuth Soudha. It all began when Mr. Parthasarathy filed a review petition with the ERC in May last over the power purchase agreement (PPA) between the two utilities signed at its instance, raising a hue and cry.

As other utilities like the Transco shifted their burdens onto the Genco, he said, the loss incurred by the latter reached a whopping Rs. 1,861 crores now threatening to wipe out the entity by 2007 with a total of Rs. 4,332 crores.

People participating in public hearings, however, cite that even now, the unit price paid for the output bought from Genco plants works out to be Rs. 1.70 only while this is around Rs. 2.50 for private plants. The threshold PLF fixed for GVK and Spectrum for incentive continues to be 68.7 per cent against 85 per cent meant for the Genco plants.

Responding on December 20, to the review petition, Mrs. Chatterjee flashed a letter to the Principal Energy Secretary, Jannath Hussain, showing concern for the Genco but opposing the plea for additional amount. Recalling the decisions of the Genco-Transco meeting a year earlier on PPA conducted by then the Principal Energy Secretary, she said, the submissions made by the Genco before the Commission were "not in line with the Government directives."

She said the Government owned all utilities and they could not claim return on equity as long as subsidies existed. The extra amount sought by the Genco totalled Rs. 1,299.53 crores and if this was to be paid compulsorily, it would have to come either through subsidy or through consumers. She asked the Principal Secretary to advise the Genco not to pursue the review petition.

Mr. Parthasarathy retorted on January 1, 2004, complaining that the copy of Mrs. Chatterjee's letter was not even marked to him and that he obtained it at the instance of the Principal Secretary. The suggestion not to pursue the petition was "out of place and unacceptable," he said terming the Transco's version of decisions of the meeting as `gross distortion.'

The commission held an in-camera hearing on the review petition, but is yet to dispose of the matter.

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Andhra Pradesh