Regulator stays move to cancel PPA with private thermal plant

Aman Sood

Patiala, February 16

The Punjab State Electricity Regulatory Commission (PSERC) has put an interim stay over the Punjab State Power Corporation Limited’s (PSPCL) decision to terminate Power Purchase Agreement (PPA) with GVK Goindwal Sahib plant, which is one of the three independent power producers (IPP) in the state.

The move came almost four months after Chief Minister Charanjit Singh Channi had approved the proposal to terminate the PPA with the GVK Goindwal Sahib (2×270 MW) plant, paving way for the PSPCL to issue a termination notice to the company.

“The operation of the termination letter issued by the PSPCL to the GVK is stayed in the interim,” reads the PSERC order signed

by Viswajeet Khanna as chairperson and Anjuli Chandra and Paramjeet Singh as members.

The GVK had filed a petition before the PSERC seeking the quashing of the ‘Procurer Preliminary Default Notice’ (PPDN) issued by the PSPCL on October 29, 2021, to it and the PPA termination letter served on January 26 this year. The amended and restated PPA with GVK Power Limited was signed in May 2009.

It is learnt that while the counsel for GVK had argued that the default notice (PPDN) was not tenable and requested for a stay on it and the termination letter issued by the PSPCL. The Advocate-General of Punjab appearing for the PSPCL requested for granting time to file a reply to the GVK petition and opposed the stay on the operation of notice and termination letter since as per the Supreme Court decisions, interim stay should not be granted where the party seeking it is not likely to suffer “irrecoverable loss”. Since in this case, if the GVK ultimately wins, it will get all fixed charges with interest and thus not suffer any “irrecoverable loss” and therefore, there was no point in granting the stay.

“The order issued by the PSERC does not detail the reason or law under which the private generators has been granted the stay despite the fact that the power from this plant costs about Rs 10 per unit as against the exchange rate of Rs 3 to Rs 4 per unit,” claimed All India Power Engineers’ Federation, spokesperson, VK Gupta.

Meanwhile, no senior PSPCL official is willing to officially comment on the PSERC order. A senior official, however, preferring anonymity, confirmed to The Tribune that “the PSERC order to grant stay to the GVK is unreasonable”.

In October 2021, the state government had decided to repudiate the PPA with GVK Goindwal Sahib power plant. Chief Minister Charanjit Channi had said that this step has been taken to safeguard the interest of state consumers by reducing the burden of costly power.

Notably, electricity is the poll agenda of almost all political parties in Punjab as they assure voters of providing cheaper or free units to them once elected to power.

WILL TAKE LEGAL VIEW

While issuing interim stay in such serious matters, the contents of discussions/arguments put forth by both sides and the law point based on which it is granted must be mentioned in the order, which is missing. We’ll surely take a legal viewpoint. PSPCL official