The Central government is reported to have turned down the State government plea to provide financial assistance from the Power System Development Fund (PSDF) for reviving the Kayamkulam thermal power plant.
The fund constituted as per the regulations of the Central Electricity Regulatory Commission in 2010 has a corpus of Rs.6,000 crore and a sum of Rs.2,500 core was earmarked for resuming the Liquefied Natural Gas-based plants in Gujarat, Uttar Pradesh, Andhra Pradesh and Delhi, mostly owned by private companies and NTPC Ltd.
The Centre is reported to be sitting on the State government’s plea for assistance while a lion’s share is being channelised for supporting private generators.
The LNG plants were closed down following the spurt in LNG prices in the international market and the consequent increase in power production cost.
The Centre was providing financial assistance to private as well as the NTPC plants to tide over the loss incurred due to the increase in fuel cost, sources said.
The corpus of the PSDF is constituted mainly by levying the congestion charges from licencees such as the Kerala State Electricity Board that cart power from generating stations.
While drawing power from the stations, the licencees are bound to maintain a prescribed frequency and in the event of any variation in frequency, they would have to pay transmission congestion charges to the PSDF.
According to board sources, southern States had paid substantial sums as congestion charges alone to the fund and KSEB share alone accounted for about 34 per cent.
Support for private plants
While liberally supporting the private gas plants in other States, the Centre was reluctant to support the State government’s plans to revive the functioning of the Kayamkulam plant owned by the NTPC.
The Union Power Ministry is reported to have taken a stance that resuming the functioning of the naphtha-based Kayamkulam plant was unviable. But the Centre is understood to have cleared the assistance sought for strengthening the intra-State transmission infrastructure as well as the power grid, sources said.
