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



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