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Transco once again seeks Centre’s approval to surrender costly power

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The Economic Times
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Transmission Corporation of Andhra Pradesh (AP Transco) has so far written two letters to the secretary of Union ministry of power requesting to surrender the high cost thermal power. Initially, AP Transco wrote on October 11, 2019, seeking permission to surrender the power allocated by the Centre for two plants – NTPC Kudgil and NTECL Vallur — citing ‘dismal operational performance’ causing overall per unit cost of power surging to Rs 10 per unit.

The chairman and managing director of AP Transco once again wrote to the Union secretary on May 14, seeking permission to surrender 625 mega watts of thermal power allocation made to the state as part of JNNSM-Phase-II bundled power scheme citing ‘current financial distress’ due to Covid-19.

Justifying the surrender, the letter cites the power supply agreements under bundled power scheme, which states, “if the cost of bundled power is more than the cost of agreed solar power, the beneficiary has the option to surrender the high-cost thermal power.”

The average price of solar component for the period FY 2019-20 is Rs 4.63 per unit and the weighted average cost of bundled power is Rs 4.46 per unit. “If PoC (Point of Connection) charges is added to the thermal component it is costing about Rs 5.03 per unit, and the weighted average cost of bundled power becomes Rs 4.85 per unit and is far exceeding the solar component of Rs 4.63 per unit,” the letter further reads. AP Transco sources said that they are still awaiting for a ‘favourable’ response from the Centre.

Author: Chetanya Mehra