Last week, the Punjab State Power Corporation Limited (PSPCL) announced a cut in power supply to high-consumption industries for two days to divert electricity for agriculture and other essential services.
The Amarinder Singh government curtailed working hours of government offices from 8am to 2pm and imposed a ban on using air conditioners there.
The measures were taken amid a power crisis: The daily demand for power reached 14,500MW on July 1, causing a shortfall of 1,330MW in supply.
The power woes led to a political storm as the opposition Akali Dal, AAP and BJP began protests over the issue, accusing the Amarinder Singh government of mismanaging the power sector. The Amarinder Singh government has shot back, attributing the high cost of electricity in Punjab to power purchase agreements (PPAs) signed by the preceding Akali Dal government.
Congress leaders have claimed of the 139 power purchase agreements (PPAs) signed during the SAD-BJP rule, 17 were enough to cater to the state's full electricity demand. The remaining 122 PPAs for 1,314 MWs of expensive power were inexplicably signed. Congress MP Partap Singh Bajwa claimed "These PPAs have been an albatross hanging around Punjab's neck, bleeding the state exchequer dry."
The PPAs were signed by the Akali Dal government with the Rajpura Thermal Power Plant, Talwandi Sabo Power Project, and Goindwal Sahib Power Plant. According to the PPAs, fixed charges would be paid to the three plants even if the government did not require electricity. The Punjab government claimed the state would end up paying about Rs 65,000 crore as fixed charges to the power plants.
A failure at one unit of the Talwandi Sabo unit had exacerbated the power crisis. According to reports, the unit has been shut since March 8 for repairs. Chief Minister Amarinder Singh had blamed the failure at the Talwandi Sabo unit, which generates 660MW of power, as being the cause of the power crisis.
Former PSPCL chairman Baldev Singh Sra attributed the situation to flawed PPAs. "There is no provision in PPAs regarding availability of private power plants during peak season even as other states like UP and Gujarat have this. I find it surprising as the unit is shut for four months. When there will be no financial liability on the private plants, why would they expedite repairs?” he was quoted as saying by The Indian Express.
Acting to renegotiate the PPAs was one of the campaign promises made by the Congress in its 2017 election campaign. The party recently reiterated its commitment to act on the matter, though it has been criticised for the delay.
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The Akali Dal has responded to criticism of the PPAs, saying they were signed to purchase electricity between Rs 2.86 and Rs 2.89 per unit, the cheapest at the time. On Monday, Akali Dal chief Sukhbir Singh Badal had blamed the Amarinder government for not acting to shore up Punjab's power-generation capacity since coming to power in 2017.
Badal also asked the Amarinder government to cancel the PPAs if it benefited the state.