Punjab State Electricity Regulatory Commission (PSERC) has directed Sterlite, the company executing Talwandi Sabo project to sign a fuel supply agreement and not resort to delay the project on this issue.
PSERC further noted that other concern(s), if any, should not become an impediment in the course of signing of the FSA. In the opinion of the Commission, PSPCL has no role and the FSA is required to be signed between TSPL and MCL, which is one of the critical links in the chain for timely execution of the project.
PSEB, the predecessor of PSPCL before unbundling, entered into a PPA with TSPL, where under the TSPL had agreed to establish, operate, maintain, generate and supply power from the 1980 (3X660 MW) MW Power Project.
As per documents Letter of Assurance for 7.72 million tons of E grade coal per annum was arranged by the PSEB from MCL. The coal supply guaranteed by MCL was up to 5.00MT during 2011-12 and 7.70MT from 2012-13 onwards.
TSPL contended before the commission that coal is to be arranged by PSPCL. Further it is required to sign revised the fuel supply agreement with supply of some imported coal component at market rates along with domestic coal. The element of imported coal has implications on cost of generation but the PPA clearly provide for determination of energy charges based on domestic coal. The terms and conditions of the Model FSA deviates from the conditions assured earlier.
PSPCL maintained that it is the duty of TSPL to sign the FSA and consequences of not signing the FSA may result in the coal linkage being lost for the project. PSERC said that the entire objective of the TSPL was only to cover up its own defaults and seek extension of time for project completion and for this purpose is making such prayers before the Commission. This is a clear abuse of process of court.