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Tangedco refuses to buy power from Vallur unit

(01 May 2017)

The NTPC Tamilnadu Energy Company Limited (NTECL), a joint venture company of NTPC and TNEB at Vallur, has withdrawn the regulation notice issued to Tangedco by which it had earlier stopped supply of power to the state discom for nonpayment of dues to the tune of 1,156 crore.

The plant was restarted following a strongly worded letter from TNEB chairman M Saikumar to NTECL CEO that said NTPC cannot unilaterally decide on suspension of power generation and supply as TNEB has 50% stake in the company. Copies of the letter were sent to Union power secretary and NTPC chairman also.

Though the power generation in the Vallur plants has resumed, the stalemate with Tangedco continues as it has refused to purchase power citing that the cost was much higher than that levied by other power producers. Vallur units are now supplying power to other southern states.

A chief engineer of Tangedco sent a notice to the NTECL CEO soon after receiving the regulation notice. "After sending the notice to the CEO, we also paid our regular monthly dues to NTECL to the extent of 215 crore. The remaining dues will be paid only after other issues between the two companies are solved," a senior official told TOI.

In the letter to the CEO, Saikumar said Tangedco is a 50% equity holder in the joint venture company and thus a co-owner of the NTECL units. A co-owner being sent a regulation notice without the approval of the joint venture plant's board is unheard of, said the letter. Tangedco is eligible to get 75% of the 1,500 MW combined capacity from the three units.

"The decision to shut down the plant without referring the matter to NTECL board has caused immeasurable revenue loss to the company. The decision can only be termed hasty, ill-advised and wrong," said the letter, adding that it was not binding on Tangedco.

The letter also said Tangedco would not pay fixed capacity charges to the JV for the period power was suspended. As per the agreement, fixed charges have to be paid by Tangedco even if it does not draw power from it. The Tangedco chairman also accused the NTECL management of following wrong practices, because of which cost of power generation was high. "The cost of power generation per unit can easily be brought down if better practices are followed in purchase of input material. Currently, the power cost is Rs 5.15 per unit," he said.

NTECL has withdrawn the regulation notice issued to Tangedco by which it had earlier stopped supply of power to the state discom for not paying dues of 1,156 crore.

News Source : Economic times