Supreme Court asks PSPCL to release dues with interest

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On Tuesday, Power rates in Punjab can further rise as the Supreme Court ordered Punjab State Power Corporation Limited (PSPCL) to pay two independent power producers (IPPs) costs of coal washing and transportation charges deducted by the corporation over a period of seven years.

The cash-strapped PSPCL has been directed to pay a principal amount of Rs 1,070 crore along with an interest of Rs 680 crore to the two IPPs in the state against deductions made by it while calculating coal washing and transportation charges.

Pronouncing the verdict, the SC asked the state power utility to release 50 of the pending payments by March 31 and the remaining by May 31 this year. “This will surely hit power rates to the tune of over 28 to 30 paise per unit,” experts said.

As per the practice, the IPPs procure coal and later bill the PSPCL for energy charges as per the power purchase agreement. However, the PSPCL took a stand that the IPPs were not entitled to be paid washing and related charges.

Earlier, the SC on October 5, 2017, had asked the PSPCL to pay the two IPPs “coal washing and transportation charges” but the PSPCL did not pay the entire amount. The IPPs again moved the Supreme Court and the court, in an order on 2019, asked it to follow the judgment dated October 5, 2017, in letter and spirit.

After this verdict, the PSPCL paid Rs 421.77 crore to Nabha Power Limited, Rajpura, and around Rs 1,002.05 crore to Talwandi Sabo Power Limited. As the PSPCL continued to make certain deductions under different heads, representatives of the two IPPs approached it, but all talks failed. “We will review the orders and move the regulator,” said PSPCL CMD A Venu Prasad. “This was a contempt case and the original case was already decided against us two years back,” he added.

According to power experts, had the PSPCL paid the charges to the IPPs in time, the cost would have been almost half as the interest cost is too high. Also, this amount would have been spread over a period of seven years and would not have hurt the consumers.

To pay Rs1,070 cr along with Rs680-cr interest

The cash-strapped PSPCL has been directed to pay a principal amount of Rs1,070 crore along with an interest of Rs680 crore to the two IPPs in the state against deductions made by it while calculating coal washing and transportation charges. Pronouncing the verdict, the SC asked the state power utility to release 50 of the pending payments by March 31 and the remaining by May 31 this year.

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