While the TNERC is sitting on the tariff petition for over a year, the evaluation of cost arrived at for the long-term power purchase is also being questioned. The cost was fixed at the levelised tariff of Rs. 4.91 per unit for long-term power purchase agreements. Though this looks less compared to the solar deal at Rs 7.01 per unit, Tangedco has been paying between Rs. 5.50 and Rs. 6.50 per unit to thermal power producers under this agreement.
A look at the quotations (a copy of which is available with The Hindu ) filed by the various power companies shows various deficiencies in the cost parameters of capacity and energy charges. According to Tangedco sources, this agreement could also turn out to be another high cost power purchase as years roll by. In fact, private power companies using imported coal have quoted in the range of Rs. 6.134 to Rs. 7.502 per unit, though the government had announced that it was purchasing power at the cost of Rs 4.91 under the agreement.
The Minutes of the Meeting of the Board of Directors of Tangedco, also available with The Hindu, reveals the higher cost of purchase.
Moreover, Tangedco had arrived at the levelised tariff of Rs. 4.91 based on provisional tariff approved by the CERC of Vallur Thermal plant for 2012-13 to be Rs. 4.92 per unit.
A section of Tangedco officials ask why the State’s power utility did not go for a levelised tarrif based on its own thermal plants like North Chennai Thermal Power Station (Stage II) where the production cost was as low as Rs. 3.74 per unit in 2013-14.
On variations in capacity and energy charges quoted by the bidders, a Tangedco official said the objective was to make all bidders (including generators using imported coal) quote a rate equivalent to L1 (the lowest) bidder, which was Rs. 4.91 per unit.
Tangedco officials claim that the highest cost of power purchased under the agreement was only Rs. 5.9575 per unit from OPG, Gummidipoondi in February 2015. However, a copy filed by the Tangedco with the TNERC about monthly power purchase details show that it had purchased power at a cost of Rs. 6.388 per unit from the same company.
Out of the 3,330 MW under the long-term agreement, a total of 1,172 MW (OPG – 74, IL & FS – 550 and Coastal Energen – 558) would be from producers using imported coal. While the fixed charges will remain static, the energy charges are variable in nature and dependent on dollar exchange rate for imported coal. “There is no way power could be brought at the levelised rate from the companies using imported coal in future,” says S. Nagalsamy, Member, TNERC.
For instance, while the dollar exchange rate was in the Rs. 54 band during March 6, 2013 when the bids were being submitted, it touched Rs. 59 on May 18 as the bids were being taken up for evaluation.
“Any thermal power purchased above Rs. 4 per unit is costly anywhere in the country,” says Mr. Nagalsamy, questioning the “professionalism” and “financial acumen” of the team that evaluated the bids for the long-term power purchase agreement.
Quotations filed by power companies show deficiencies in cost parameters of capacity and energy charges
