NTPC insists Odisha honours Talcher PPA, says won't scrap agreement

The issue: Power-starved earlier, state today is saddled with a glut; seeks to renege from commitment to lift at least 50% from 1,320 Mw capacity at Talcher

NTPC, the country's largest power utility, has ruled out the possibility of scrapping power purchase agreement (PPA) signed with the Odisha government for its Stage-III Talcher Thermal Power Station (TTPS).

The agreement was executed with the state government in 2010 when Odisha face a power deficit, especially during peak demand. As per the terms of the PPA, the state government was to draw 50 per cent of the 1,320 Mw power to be generated by the station in its next phase ramp up. 

But Odisha is now looking at 1,500-1,600 Mw excess thermal power from 2019-20, counting its 800 Mw allocation from NTPC's upcoming 1,600 Mw fresh capacity at Darlipalli (near Sundargarh) and 660 Mw to be generated by its own utility, Odisha Power Generation Corporation Ltd (OPGC). In view of this glut, the state government was not keen to commit to more power procurement.

An NTPC official, however, said the whole project was designed on power sourcing commitments made by states.

“The Odisha government has committed to buy 50 per cent of the power from TTPS under PPA. They cannot renege on the pact. Other states -- West Bengal, Bihar, Jharkhand and Sikkim will procure 35 per cent of the power and the remaining 15 per cent in reserve power”, he said.

The state government had flagged reservations with the Union power ministry last week over escalation of power tariffs by NTPC. Odisha's power minister Susanta Singh in his letter said, the power utility had hiked tariff to Rs 3.40 per unit, contrary to Rs 2.70 as agreed in the PPA.

The NTPC official said, the state government's concerns were misplaced. “With a tariff of Rs 3.40 per unit in the first year of operations and a levelised tariff of Rs 3.50, this is the cheapest power which the state government can avail from any thermal power station”, he said.

At present, Odisha was buying power from the existing 460 Mw TTPS capacity at Rs 3.18 per unit. To source power from the NTPC Kaniha super thermal power station (3010 Mw), the state government was forking out Rs 3.70-3.80 per unit including transmission charges for using the Central network.

Stage III expansion of NTPC owned TTPS has of late snowballed into a major contention between the Centre and the Odisha government. The tipping point was Union minister for petroleum & natural gas Dharmendra Pradhan's letter to chief minister Naveen Patnaik. Pradhan had faulted the state government for delay in grant of clearance to the plant. He rued that the lack of approval by the High Level Clearance Authority (HLCA) had held up the start of construction activity.

The state government was swift in its repartee. “The state government has been actively assisting all projects by NTPC beginning from land acquisition to forestry & environment clearance and power evacuation. The TTPS has also been similarly facilitated by the Odisha government as a result of which several statutory clearances could be obtained by NTPC. The chief secretary has also reviewed the progress of the project in a meeting held on July 28, 2018 wherein senior officials of NTPC were also present”, the energy minister said in the letter to R K Singh, Union minister for power and new & renewable energy.