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Home News Power Sector News UPPCL stops buying expensive power from five thermal plants

UPPCL stops buying expensive power from five thermal plants

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UPAround seven-year-old power purchase agreements signed between the UP Power Corporation Ltd (UPPCL) and the Bajaj Energy Ltd during the Mayawati regime will come to an end after 18-07-2017 as the former has decided to not buy 'expensive' electricity from the latter's five thermal plants.

The UPPCL on July 8 served an exit notice on Bajaj in this regard saying the notice should be deemed as executed after 10 days of its issuance.

The UPPCL had on December 10, 2010 signed PPAs with the Bajaj Energy Ltd for the purchase of a total 450 MW power, 90 MW each from its five thermal plants (set up within sugar mills) at Barakhera (Pilibhit), Khamberkhera (Lakhimpur Kheri), Kundarki (Gonda), Maqsoodpur (Shahjhanpur) and Utraula (Balrampur).

The BJP government on coming to power reviewed the PPAs and found that power being purchased from the five plants was as expensive as Rs 7.63- Rs 8.28 per unit which was found to be 100.79% to 171.89% costlier than the 3.80 per unit average cost being spent by the UPPCL on purchase of power.

In its PPA termination notice to the Bajaj, the UPPCL has pointed out that the UP government is agreement-bound to provide round the clock affordable electricity to all consumers and this was not possible if it continued to buy expensive power.

"By signing the power for all (PFA) document, the central and the UP governments have placed themselves under an agreement to provide 24 X 7 power all consumers. To make this possible, the key action point under the PFA is to bring down the UPPCL's power purchase cost that constitutes 80% its overall expenses," says the corporation in one of the notices served in respect of the Bajaj's Barkhera thermal plant.

In the same notice, it has been pointed out that the UPPCL purchased 354.52 million units of power from this plant during 2016-17 for Rs 8.04 per unit which was among the highest and around 111.58% higher as compared to average power purchase cost of Rs 3.80 per unit.

Meanwhile, UP Rajya Vidyut Upbhokta Parishad president Avadhesh Kumar Verma has urged the power regulator (UPERA) to accordingly revise the UPPCL's annual revenue requirement (ARR) proposal to minimize tariff hike.

Verma said state's consumers were facing the heat since the UPPCL was passing the burden on them through the tariff. He said the UPPCL in its ARR had proposed to buy power worth Rs 1773 crore at an average rate of Rs 7.22 per unit from the Bajaj's five plants during 2017-18.

"Now when, the UPPCL has terminated the PPAs for costly power, the ARR should be revised accordingly so that consumers get relief when the tariff is revised in September-October," Verma demanded.

The UPPCL had earlier terminated the contracts for setting up nine power plants under the MoU routes on the Yogi Adityanath government's directives after it was found that the private developers that had bagged the contracts during the Mayawati regime had not done sufficient work on the proposed sites despite getting time extensions during both Mayawati and Akhilesh Yadav regimes.

Source- Hindustan Times


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