Government fiat leaves private co-gen units high and dry

Order to sell power only to State seen as poll-time safety net

The State government, in view of the Lok Sabha elections, has invoked Section 11 of the Karnataka Electricity Act, mandating all private co-generation units (co-gens) to sell power only to the government to avoid power cuts.

This has caused heartburn among the private generators as they have been barred from selling power at commercial rates. 

Around 600 MW is generated by 100 co-gen units in the State. Of this, the government plans to purchase 500 MW, a top source in the Karnataka Power Transmission Corporation Limited told Deccan Herald. “We will purchase power at Rs 5.50 per unit to meet the shortage,” an official said. The order has been issued and the officials are in the process of communicating the same to the generators. 

Sources in the Energy department confirmed that the department had approved the proposal on Wednesday. The department cites the technical snag in Udupi Power Corporation Limited as a reason for the move to purchase power from the co-gens. This despite the fact that it is a zero productivity month for the agriculture sector, with least activities and less pressure on irrigation pumpsets.

Experts in the power sector said that the purchase is unnecessary as the demand had come down in the State. The consumption on March 25 was 200 million units (mu) against the allocated 199 mu, while that on March 26  it was 199 mu.
“The gap between demand and supply of power in the State is normally between 500 MW to 1,000 MW, which on any given day could be managed with load-shedding. But this time, the State government does not want to take any risk with polls round the corner,” said a source.

The co-gen units are crying foul as they claim that the government’s offer of Rs 5.50 per unit will lead to severe losses for them. “The cost of generation of one unit of power is Rs six as this is off season and we don’t have bagasse (the pulp left behind after extracting juice from sugarcane). We have to rely on imported coal,” a co-generator said.