The Hindu Business Line : No extra power purchase from Vemagiri: Rosaiah

THE Andhra Pradesh Minister for Finance, Mr K. Rosaiah, on Friday clarified that the State Government had not made any commitment to purchase additional power to be generated by the Vemagiri Power Generation Ltd (VGPL) while agreeing to the latter's proposal for enhancement of the power project capacity to 1000 MW.

He said that the Government would purchase power as per the existing power purchase agreement (PPA) and the company has to market on its own any additional power generated by expanding the installed capacity.

The Minister said that as per the Electricity Act, 2003, the State Government licence was not required by the power producers to set up power projects and market the power generated. Hence, if any of the independent power projects that were in the pipeline in the State wanted to expand their installed capacity they could do so, but "at their own risk."

He told newspersons that VGPL had agreed to the Government's proposal to defer the scheduled date of completion of the project and to suitably modify the PPA with the Transmission Corporation of AP. Similar proposals were being discussed with three other power projects, Gautami Power Ltd, GVK Extension Project and Konaseema EPS Oakwell Power Ltd, which were in the pipeline.

These projects were asked to defer the scheduled date of completion, as the supply of natural gas to them by GAIL (India) Ltd may not materialise unless there was a focussed action to ensure gas supply as per the firm allocations made. As per the PPAs, which were entered into with these power projects after securing firm allocations, the power utilities in the State would have to pay full fixed charges once the plants were commissioned even if the gas was not supplied and the power was not generated. This would cost the State exchequer Rs 1,020 crore per annum.

Mr Rosaiah said that PPAs of eight gas-based power plants in the State were sought to be reviewed, as the previous Telugu Desam Government was liberal in extending concessions to these projects. A sub-committee headed by him was examining various aspects in this regard.

The Minister said that as the Srisailam reservoir had received sufficient inflows in the past few days and power generation at its left and right bank powerhouses has commenced. While 900 MW of power was being generated at the left bank powerhouse 330 MW was being generated at the right bank powerhouse. Following this, the State Government would discontinue the purchase of Rs 80 lakhs worth of power per day from various other sources.