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C. Shivkumar

Sources said the regulator had taken the decision as the PPAs of these hydel projects with the Karnataka Power Transmission Corporation Ltd had not been approved.

BANGALORE, March 14

THE State Electricity Regulatory Commission (SERC) has cancelled the power purchase agreements (PPA) of eight hydel projects including one promoted by the Samajwadi Party (SP) leader, Mr Amar Singh Choudhry.

Sources said that the regulator had taken the decision as the PPAs of these hydel projects with the Karnataka Power Transmission Corporation Ltd (KPTCL) have not been approved. The regulator has cleared only those projects which have secured its approval.

The SP leader had promoted the 16 MW Harangi Hydel Project near Mysore. Other PPAs cancelled include a 24-MW project of the Godavari Sugar Mills Ltd in north Karnataka. The cancellation would mean that none of these projects would be entitled even for deemed generation benefits.

The PPAs for the cancelled projects were signed in 1999 when the regulator became functional, however, none of these obtained any regulatory approval before feeding into the grid, the sources said. These projects currently contribute about 190 million units (mu) per annum into the State grid. The tariff from these projects is in line with the recommendations of the Ministry of non-Conventional Energy, which assures an equity return of 16 per cent. The tariff applicable to these projects accordingly Rs 3.49 a unit and the financial implication is in the region of Rs 66 crore.

The regulator has scaled down the purchase from mini-hydel projects to just 34 mu, scaling down the bulk power buyers financial liabilities by at least Rs 50 crore. The sources said that the cancellation of the projects would now mean that the promoters would have to submit their respective PPAs to the SERC and obtain its approval

The sources said that this scaling down would have negligible impact on the availability of power supply in the Karnataka, since some of the larger stations would step up generation to meet the shortfall. However, non-availability from mini-hydels is not seen as a major source of worry. KPTCL is expected to draw at least 30,000 mu this fiscal from all the power projects of which only 600 mu is from non-conventional energy projects, which includes cogeneration, mini-hydel, and wind turbine generators.

This SERC decision would mean that the availability from non-conventional sources will drop to about 411 mu. However, this is a deficit that could be met from other sources including from increased availability from KPTCL's generation, the sources said.

However, for the small promoters, the decision is expected to have a major impact on their revenues since some of them including sugar mills had opted for setting up these kinds of projects to increase their returns on investments and take advantage of the tariff and fiscal concessions available to them.

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