Monthly Archives: March 2017

Debunking the Dubious Power Purchase Costs Reported in Deccan Chronicle

Telangana DISCOMS Project Average Cost of Power Purchase of All Sources to come down to Rs 4.45 in 2017-18 from Rs 4.51 in 2016-17

This is in response to Article Published in Deccan Chronicle on 24th March 2017  with title “Telangana buys ‘costliest’ thermal power from Andhra Pradesh” stating In Andhra Pradesh the highest cost per unit is Rs 20.57 and the lowest is Rs 5.57, while it is Rs 4.69 to Rs 3.60 in Telangana.”

This is a gross misrepresentation and inference either out of ignorance or is part of deliberate propaganda, either way Since this sends Very Wrong message to the people in both states hence below factual explanation is necessary:

Firstly, these Figures are taken from Computations in the form of Indent of ARR (Aggregate Revenue Requirement) Presented by TS DISCOMS to TSERC for the year 2017-18. TSDISCOMS have followed as expected of them, to first make Total Utilization of All the Power Available and Entitled within Telangana under the AP Re-organization Act. (ie KTPS (A,B,C, V and VI), RTB, KTPP (I and II),  It then Started indenting for estimated Utilization of Entitlement of AP Power Starting with Maximum from Lowest Variable Cost from VTPS-IV (Rs 2.99) then RTP II (Rs 3.20), VTPS I,II,III (Rs 3.26), then Last bare minimum is indented from RTPP I (Rs 3.63) and RTPP II (Rs 3.63) which have highest incremental cost,  This is the Optimal Way of Indenting to Minimize the Total Costs that any State ERC will also expect from DISCOMS the Result is TSSPDCL Indent reveals it managed to keep the Average Cost of Power Purchase Per unit @ Rs 4.45 for Average Power Load of 7770 MW.

What the authors have Misrepresented is,  With Total Cost Minimization approach TSSPDCL has Projected to avail Only 62 MU from 509 MU Entitlement from the Costliest plant RTP III as a result since Total FIXED Cost is anyway have to be born by both states as per the act till 2024 or before when the PPA expires.  (Notional Cost per unit for this 62 MU out of Total Requirement of TSSPDCL 38,432 MU which is just 0.1% of the Power Purchase by TSSPDCL) is reported in work sheet as Rs 20.57, This is a notional number of a miniscule line item that can technically become Infinity if we indent is ZERO MU from this unit as we still have to Pay the full FIXED Price for the Plant that’s the nature of Power Sector.

When One refers to Similar ARR Filing of APSPDCL with APSERC it would keep the indent bare minimum for RTS-B which is the costliest of all TSGENCO power hence its Notional Cost works out as Rs 18.61 to AP and same can be found.

In nutshell, Reality is, there is not much difference of all the shared thermal power plants between Andhra Pradesh and Telangana. People in neither state need to think their GENCO is better or bad as far as the cost of Thermal Power supply is concerned and will have to decide on how to treat this sort of journalism and the so called experts making such report in mainstream media or social media.

Real Good News is, with DISCOMS projecting more than required power availability they are geared up to provide uninterrupted power supply for 2017-18 and the Average Cost of Power of all sources is Expected to come down from Rs 4.51 in 2016-17 to Rs 4.45 in 2017-18 these are the two positive elements that should have been highlighted instead the authors have chosen to look the other way for reasons they only know better.

I am reminded of this .. 

సూర్యుడిని చూడమంటే చీకటిని చూసేవారిని
చంద్రుడిని చూడమంటే మచ్చలు చూసేవారిడిని
గులాబీని చూడమంటే ముల్లును మాత్రమే చూసేవారిని
మామూలు మనుషులు అనలేం..

వీరితో తస్మాత్ జాగ్రత్త .. అని అనడం తప్ప ..

Venkat Gandhi


Contrasting Andhra and Telangana Chandranomics

Time to take stock of How the Two “Chandra” in Telangana and Andhra are going about their Financial Budgeting and Actual if I may call as “Chandranomics” of  Andhra and Telangana

Andhra Chandranomics (AP Budget Estimate, Re-estimate and Actual since 2015)

B.E. : Budget Estimates  R.E. : Revised Estimates during next budget   Actual : Reported during next to next budget

  • Original Budget vs Actual State Performance in Revenues is about 90%
  • Center Grants are 124 % of Budget (Andhra Media will make all believe it otherwise)
  • Public Debt Achieved is 247% Rs 53,681 Crores (did we hear it from any Opposition and Andhra Media ?) 
  • Actual Cash in-flows is 26% Over the Original Budget, primarily due to Over 30,000 PLUS Crores more Borrowings over and above the Budgeted and Revised Estimates
  • Lesson (Final Actual Borrowings and Centers Grants are Managed under Andhra Chandranomics Secretly and are not revealed to Assembly and public thru Original or Revised Estimates of Budgets Sessions, Total Mockery of Democracy and Total collusion of Parties and Media in the State that such things is not brought out in to public domain
  • AP is having Very Special Category Status in Center and RBI, no FRBM or any Rules apply to this state and CM

Telangana  Chandranomics (TS Budget Estimate, Re-estimate and Actual since 2015)

B.E. : Budget Estimates  R.E. : Revised Estimates during next budget   Actual : Reported during next to next budget

  • States Own Original Estimates and Final Actual Performance is around 80%
  • Center’s Grants have been less than 80% of Budget and less than Half of what are granted to AP
  • Telangana Chandranomics Keeps stretched targets in Budget and does proper revision brings it close to reality and final figures may be close to R.E.
  • Good Financial Management is reflected Borrowings too have been reduced when revenues have been short
  • All hovering around 80% of Original Estimates is Chandranomics of Telangana
  • Evidence of Healthy Growth of States Revenues is Visible

The Buzz in Mainstream Media and Social Media is Not about Andhra Pradesh Borrowings of 250% than in Budget in 2015-16, but is Projecting Telangana has done Huge Borrowings when in reality it did only 81% of what it estimated in the Original Budget.

At the outset let me be clear this Post having written after reading the book of Sriram Vedire Garu, I mentioned his name and book title and the points reinforcing the current state government initiatives and take away points ..

However, Contours of Kaleshwaram to Srisailam National Project as Phase 2 to Kaleshwaram is Mine not attributed to the Book or the author, as the book proposes ILR to Nagarjuna Sagar, its my view that Kaleshwaram to Srisailam is feasible as its FRLat 270 M is less than Dindi 393 M and more beneficial as its guaranteed way of diverting water to Rayalaseema another Arid and Water deficit Region particularly with KWDT II, Srisailam will witness 118 TMC reduction in inflow as compared to KWDT I with both Maharashtra and Karnataka having been allocated 118 TMC more water at 65% dependability, hence this Reduction need to be back filled with Godavari Water to keep intact current investments made and plans of Andhra Pradesh and Telangana based on Srisailam Waters.

Diversion to N Sagar thru 300 M cotor proposed as ILR in the book while assures the Command Area under Sagar and Krishna Delta it can not assure the water availability for command area under Srisailam Left and Right Banks.

Once 400 M contour Canal is established it any way can serve all the purposes of 300 M contour canal

Its my view 400 Meter should get higher priority and should be done first, this is different from whats suggested in the book.
Any one having any comment or questions on the article are requested to direct to me and not to Sriram Vedire Garu who is fully occupied with multiple critical tasks in Central and Rajasthan State Government Tasks.