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Uttar Pradesh Power Corporation Limited (UPPCL) is likely to surrender costly power supplied by various public and private sector energy companies. The power is presently purchased by the UPPCL under PPA (power purchase agreement). The move, if implemented, would be a big relief for the debt ridden UPPCL and power consumers as it will bring down the average cost of power.
According to a study by UP Rajya Vidyut Upbhokta Parishad, this could result in savings of nearly Rs 2,000 crore annually to the state, thus providing an elbow room to the power utility to keep power tariffs low or even cut tariffs during the crucial election year. While UP's power tariffs are among the highest in the country, the state will witness assembly polls in the early months of 2022.
Most of the 'costly' PPAs for 1,600 megawatt pertain to the memorandum of understanding (MoU) route signed during the previous Samajwadi Party and Bahujan Samaj Party regimes with the state power utility, UPPCL.
The companies whose projects would be hit if the proposal to surrender costly power gets implemented include public sector energy major NTPC, and private power producers viz. Bajaj Group, MB Power, KSK Mahanadi Power and RKM Powergen.
UP Rajya Vidyut Upbhokta Parishad President Avadhesh Verma on Saturday submitted a report to UP Energy Minister Shrikant Sharma demanding surrender of power that cost more than Rs 5 per unit since cheaper power was readily available from other sources, including energy exchanges. He claimed that the cost of power being purchased from these companies ranged from Rs 5.35 per unit to as high as Rs 6.05 per unit.