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C. Shivkumar

Besides, the sources said the reduced availability meant that IPP capacities would have to be fully utilised to meet the shortfall.

BANGALORE, Oct. 8

THE Karnataka Power Transmission Corporation Ltd (KPTCL) has increased drawals from the four independent power projects, three of whom are liquid fuel-based.

This increase in drawals has taken place despite the escalation in oil prices, the bulk of which is in the form of fuel costs. Of the total of 440 MW of IPP capacities available in the State, 360 MW is based on liquid fuel. The three projects — Tanir Bhavi Power Company Ltd (220 MW), Tata Power (81.60 MW) and the Rayalseema Power (27.80 MW) — have been feeding approximately 7 million units into the State grid every day.

Jindal Thermal Company, which has assigned 130 MW to the State grid, does not have foreign exchange as pass through on power tariffs, and instead has a constant escalation percentage. This escalation percentage and the base tariff are points of dispute, after the regulator scaled them down early this year.

Besides, Jindal, under the original agreement, did not have any fuel pass-through and the coast was based on a single part tariff, unlike the three liquid fuelled projects, which are based on two-part tariff.

Sources said that the tariff on the variable side had been rising during the last two months. This was because international oil prices are currently in the range of about $31 a barrel ($233 per tonne). This in turn translates into a power tariff of close to Rs 5.5 a unit, on account of fuel escalation alone. The sources said that final tariffs would have been higher, but for the fact, some of the tariff increases had been shaved off by exchange rate appreciation.

But even this tariff was still on the high side, the sources said. This was because the weighted average power purchase cost budgeted for the current fiscal in the tariff submissions to the regulator was around Rs 1.95 paise per unit. But these estimates were made on the basis of availability from the hydel stations of at least 10,400 million units or about 28 million units per day at an effective tariff of about 49 paise per unit. But the availability from the hydel stations was less than half this estimate, the sources said.

Besides, the sources said the reduced availability meant that IPP capacities would have to be fully utilised to meet the shortfall. Currently, the State's requirement has been capped at 80 million units a day. But even to meet this requirement, the IPPs are operating at full capacity. Tanir Bhavi is currently operating at 95 per cent of PLF, feeding about 4.5 million units into the grid on a daily basis. The remaining projects are also operating at an average of about 77 per cent plant load factor.

The sources said, to sustain these levels of purchases, the incremental costs were being directly met through subsidies from the Government.

The escalation in the subsidy requirement for the current year is estimated at Rs 650 crore for the current year. If international oil prices go up to $35 a barrel, then it could come closer to Rs 700 crore, the sources added. The sources said that attempts for tying up alternative sources of supply either from Talcher or from the neighbouring States had so far not been successful.

This was because the States such as Andhra Pradesh were not willing to forego their share in the Central stations and preferred selling directly. But the tariff being quoted by APTransco, the sources said, was not acceptable to Karnataka.

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