The Hindu Business Line : Other States eye KPCL's surplus

State Government officials said the States that have approached KPCL include Maharashtra and Punjab. The tariffs have not been discussed. But the officials said that both the States were prepared to pay competitive prices for drawing power from the KPCL's Raichur Thermal Power Stations units.

This is not the first time this year that KPCL would be exporting power to these States. Punjab had purchased power from KPCL in August and September this year. Similarly, sources said, Maharashtra was finding the tariff from the Dabhol unit of the NTPC-owned Ratnagiri Gas and Power Ltd on the high side.

This is because the plant is currently fired using expensive naphtha as fuel. Consequently, Maharashtra is scouting for purchases from other surplus States and evacuating the same through the Power Grid Corporation of India Ltd. Between April and August, Punjab was currently faced with a peaking deficit of 26 per cent and Maharashtra 24 per cent.

KPCL is sought after since the Karnataka Electricity Regulatory Commission's tariff orders would leave it with a substantial surplus. KPCL is expected to be left with a surplus of at least 2260.7 million units this year, after the electricity Regulator disallowed purchases by four of the five Distribution Companies, from the RTPS stations in view of improved hydel availability.

On the face of it, it would result in a revenue impact of at least Rs 501 crore to the KPCL. But, the officials said that in reality there would no negative revenue impact. In the cases of units six and seven, the fixed costs were covered through the power purchase agreements with the transmission and distribution companies. In the case of the remaining units, a large part of the fixed costs has already been amortised.

This also allowed the KPCL to make cross-border sales to other States reeling under severe shortages at "reasonable tariffs," the officials said. Many of the States bidding for KPCL's power have indicated tariffs would be well in excess of Rs 3 unit or benchmarked to the tariffs already being paid to the central power generator, NTPC.

Sales to other States, the officials said, was likely to help bring down KPCL's borrowings substantially. , the sources added. In fact, such sales would address their cash flow problems on account of delayed bill settlements by the distribution companies.