The closure of thermal units at the cost of power purchase agreement (PPA) may prove costly during the long run. Yesterday, PSPCL surrendered 204 lakh units costing about 6 crore from its share in the grid to draw power from sources signed by PSPCL under power purchase agreements.
The reason behind closure of units is due to the costly power purchase agreements made by PSPCL at the behest of politicians to avoid power cuts during summer and paddy season during this election year. PSPCL has been drawing costly power from the grid as per power purchase agreements and backing down its own units.
The political assessment to make power purchase at every possible cost during the summer is not good for the health of the starving PSPCL. It has arranged power at the least rate ever for Rs 4.25 per unit as part of its use to supply continuous power supply to all the electricity sectors.
PSPCL has signed a power purchase agreements with PTC and NTPC
in order to buy 3200 million units of power for an important paddy season. In addition to it, PSPCL has been successful in obtaining around 2,500 million units of power under various arrangements with banks from other states too.