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Hyderabad, Dec. 8

GAIL and ONGC were pulled up by the Andhra Pradesh Electricity Regulatory Commission (APERC) for not being able to fulfill their gas supply obligations as per the power purchase agreements with independent power producers (IPPs).

These relate to GVK extension, Konaseema, Gouthami and Vemagiri projects with a combined installed capacity of 1499 MW. The APERC Chairman, Mr K. Swaminathan, pulled up the counsel of these two undertakings for attending the hearing for a second time without information about their plans of gas supply to the projects. Last time, when the hearing took place on November 5, the commission had to adjourn due to inadequate details.

"You should have at least partially complied with the questionnaire furnished by the commission," the commission chairman observed.

The commission expressed concern about the delays as this has direct bearing on electricity consumers in the State. It may be recalled that the State had signed the power purchase agreements with the independent developers after ONGC and GAIL had given a firm commitment of gas supply.

While all these projects are nearing completion, the two companies have pleaded that there was gas shortage. And if the IPPs opt for naphtha instead of natural gas, the power generation cost would be about Rs 5 per unit. If naphtha is used, the consumers would have to bear additional cost of Rs 1,020 crore per year.

(This article was published in the Business Line print edition dated December 9, 2005)
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