Allowing pvt franchisees in power will spur cherry picking: Tamil Nadu CM

Says the move will affect the discoms and, consequently, public interest as well

Tamil Nadu Chief Minister K Palaniswami said today that the Central Government's proposal to allow private franchisees/sub-licencees in the power sector would only lead to cherry picking of remunerative areas by such parties, and will affect the discoms and, consequently, public interest as well.

In a letter to R K Singh, Union Minister of State (Independent Charge) for Power and New & Reweable Energy, Palaniswami said some of the provisions in the draft Electricity (Amendment) Bill, 2020 are detrimental to the state government/state utilities.

“The State discoms will be left serving social sector obligations and rural areas which will result in massive losses to the discoms,” he said in the letter.

He added that it was unacceptable to fix hydro power purchase obligations separately for a state like Tamil Nadu as it is seasonal and monsoon-dependent, and not in the control of power distribution companies.

“To avoid disparity among the States with different sources of renewable energy available, it is suggested that Renewable Purchase Obligation (RPO) be fixed for total Renewable Energy rather than independently fixing for Solar, non-Solar, hydro, etc,” Palaniswami stated in the letter.

While welcoming the Centre's Rs 90,000-crore package to power distribution companies for clearing dues, he said the Tamil Nadu government has requested the Government of India to relax the norms for working capital under UDAY, since there is no headroom available for Tangedco. Further, there are no subsidy overdues from Tamil Nadu. Meanwhile, Tangedco has already applied to PFC and REC for financial assistance of Rs 20,622 crore. Palaniswami requested expeditious sanction, so as to avail financial assistance at a concessional interest rate. 

On the coal issue, he said the requirement of Tangedco’s power stations is around 72,000 metric tonnes a day and the total Fuel Supply Agreement (FSA) quantity available at present including the side agreement is 21.291 million tonnes per annum (MTPA). The average realisation for the past five years is only 61.6 per cent against the agreed FSA quantity. Coal India Limited (CIL) had curtailed the existing linkage quantity of 20.445 MTPA to 

18.791 MTPA. This may be restored to 20.445 MTPA.

He requested the Union Minister to consider enhancement of the linkages allotted to North Chennai TPS II (2x600Mw) and Mettur TPS II (1x600Mw) to 6.62 MTPA and 3.31 MTPA respectively. In order to reduce costs, Coal India may be directed to supply coal at the consumption point of Thermal Plants. This will directly benefit consumers by reducing cost of power, the Chief Minister said.

He added that the development of the Chandrabila coal block allotted to Tangedco has been adversely affected due to non-issuance of clearance to explore the forest area of the block. He asked the Union Minister to urge MoEF&CC to expedite the clearance and ask the Ministry of Coal to give extension of time and revise the time schedule for the development of the Chandrabila Coal Block. Palaniswami hoped the performance security provided by Tangedco for non-adherence to the agreed time schedule would not be appropriated.

Tangedco requires long-term coal linkage for the upcoming North Chennai Stage-III STPP (1x800Mw) and Uppur STPP 

(2x800Mw) to the extent of 5.913 MTPA. As it is most economical for Tangedco to take coal from Talcher region and the coal companies, MCL and SCCL, have agreed to provide long-term coal linkage from that region, the Chief Minister requested the Union Minister to urge the Ministry of Coal to approve such linkage.