Power Purchase Agreement Between Electricity Supply: Fill & Download for Free

I have lived in Gujarat for the first 22 years of my life.I remember very well that Gujarat was one of the worst states when it came to electricity. There were hours and hours of power cut.As Mr Modi had said- "When I became the Chief Minister of Gujarat, many people used to come to meet me with garlands and they used to say that Modi Ji, please do just one thing, provide us electricity at least at the dinner time..! There were such days in Gujarat that there was no electricity even at the time of dinner."“In 2001, the Gujarat State Electricity Board had posted a loss of Rs 2,246 crore for 2000/01, on revenues of Rs 6,280 crore. Interest costs alone were Rs 1,227 crore. Transmission and distribution, or T&D, losses were a substantial 35.27 per cent, and load shedding was frequent. GSEB had no funds to add generation capacity on its own, nor was it able to persuade the private sector to invest.Modi's first step was to identify a bureaucrat capable of taking on the enormous challenge. He chose Manjula Subramaniam, a Gujarat cadre officer, who had been joint secretary in the prime minister's office from 1993 to 1998, playing a key role in the country's liberalisation, and appointed her Chairperson of GSEB and Principal Secretary, Energy and Power.Instead, she initially concentrated on two areas: bolstering the power utility's finances and building employee morale. Discovering that GSEB had secured loans at interest rates of 18 per cent or more, she sought debt restructuring, convincing banks and financial institutions to lower their rates, which resulted in savings of Rs 500 crore in 2002/03.Her next step was more radical. Rarely before had electricity boards renegotiated power purchase agreements, or PPAs, already signed with private players. But having examined the PPAs her board had entered into, Subramaniam felt the heat rate - a measure of generator efficiency - had been inflated by the power suppliers, who were consequently charging more than they should have.Though the private players initially resisted, the government-constituted committee set up for the process stood firm, and ultimately, after more than 18 months of hard bargaining, got the rates lowered, leading to a further saving of Rs 675 crore in 2002/03 and Rs 1,000 crore in 2003/04.Simultaneously, Modi's government began plugging the leakages in distribution. Power thefts in Gujarat then ranged between 20 per cent in urban areas and 70 per cent in rural regions. It passed a law against power thefts and set up five police stations across the state, solely to nab such thieves. Stringent action began against those who ran up large power bill arrears, including disconnecting their supply.Unmetered power supply, which some rural areas were getting was stopped altogether, with GSEB entering into a structural loan re-adjustment with Asian Development Bank to fund the installing of meters.Subramaniam also found that many employees, disturbed by widespread talk of power reforms, feared for their jobs, and were feeling somewhat alienated from GSEB. She appointed a consultant to suggest ways to win back their loyalties.From mid-2002, armed with the consultant's suggestions, the board began its special effort to reach out to employees. It started training programmes at all levels to reassure them that while people may be redeployed, no one would be laid off. Senior officials increased their interactions with the staff, including holding 'town hall' meetings where they shared details of the board's financial position and encouraged employees to ask questions. An internal newsletter was also started.Once assured of retaining their jobs, the employees themselves began discussing possible reforms. A 'reforms progress management group', comprising GSEB employees, was also set up.It was now time for the unbundling. In May 2003, the Gujarat government passed the Gujarat Electricity Industry (Reform and Reorganisation) Act, which divided the GSEB into a holding company, a power generation company, a power transmission company and four distribution companies. This enabled better management and more efficient operations.Another key reform was the separation of the feeder line that supplied power to the rural areas into two: one to supply power for agricultural needs and other for household and other needs. This was part of the Jyoti Gram Yojna, a scheme Modi announced in 2003 to supply round-the clock power to villages.The Modi government has also taken scrupulous care to ensure that the state electricity regulator - unlike in most states - remains truly independent of political pressures. The regulator has, thus, been able to revise power tariffs every year, which ensured the state bridged the gap between the average cost of supply and what users paid for it.The result? The state electricity board posted its first profit of Rs 203 crore - after tax - in 2005/06. By 2010/11, net profit had risen to Rs 533 crore, while T&D losses had fallen to 20.13 per cent. Tariff collection efficiency is close to 100 per cent. Private players, once reluctant to invest in Gujarat's power generation, are now rushing in: of the power plants with a total installed capacity of 16,945 MW coming up in the state, 6,864 MW - or roughly, a third - is by the private sector. "Abundant power is a major USP of our state today," says minister Patel.By 2014, not only did Gujarat provide 24x7 electricity to most consumers, it also had surplus power of 2,114 megawatts.”It is not that I lived in a big city in Gujarat, I lived in a small town. And Gujarat though was a drought affected state, the water supply at homes never stopped. I had gotten so used to 24 hours water and electricity supply- the basic issues, that I had taken them for granted. It was only when I moved out of Gujarat to other states that I realized how bad the situation was in some other places.This proves that if you use people's money well and give results, people are willing to pay for it. But for that you need to work hard and earn their trust instead of doling out freebies to everyone for short term gains.Gujarat's power sector turnaround story- Business News

United AP has total installed power generation capacity of 17,285.48 MW.OwnershipState Owned- 9,046.06 MWPrivate Players- 5,082.66 MWUnder Central Govt.- 3,156.76 MWGeneration TypeThermal Power Plants - 11,980.68 MW ( Vijayawada, Rayalaseema, Kothagudem, Kakatiya thermal stations etc.)Hydel Power Plants - 3,734.53 MW (Srisailam, Jurala, Nagarjunasagar, Singur, Sileru, Nizam Sagar, Pochampadu, Penna Ahobilam, Donkarai)Gas based plants generate the rest. Most of them are privately owned and located along the coastal line owning to the gas availability from KG-Basin.(Wind and Solar units generate negligible share)This data is of 2011 and sourced from APGENCO website and SKC report. The capacities have increased a bit but the ratios remain same even now.The power demand in Telangana is around 56% and that of total generated power but the installed capacity in this region is just around 37%. Even the upcoming projects of APGENCO are distributed in the same ratio. But the region didn't face any power crisis while the state was united due to power purchase agreements, that were in place which distribute power based on consumption.Now, this is why one state is trying to cancel PPAs and the other is resisting it.What are PPAs?APTRANSCO (Transmission company) pools the electricity from all the generators in the state (APGENCO and private players) and supplies it to four distribution companies (APEPDCL, APSPDCL, TGSPDCL(formerly APCPDCL), TGNPDCL(formerly APNPDCL)) according to power purchase agreements, that are based on Gadgil formula. (Gadgil formula)Power from Central Generating Stations, suchas NTPC, is allocated to states in two parts- 85% is allocated based on Gadgil formula and is called firm allocation and the rest 15% remains unallocated to meet urgent requirements. This 15% unallocated power is at the disposal of Government of India.In this case, this unallocated power produced by NTPC (15%) will be distributed between the two states based on actual energy consumption in the respective regions in the last five years, which stands at 47.83% in AP and 52.17% in Telangana. The rationale being cited is Telangana government will have to supply power for the common capital, Hyderabad- which consumes a lions share.

First to correct you, it's ‘ Load Shedding’ not ‘ Load Shading ’ . You may be aware that Electricity as an energy cannot be stored . Hence , only the power generated is available for consumption. If the power demand exceeds supply , some of the areas will face Load Shedding . These will be low priority areas like Agriculture and Rural Areas.As far as the current scenario is concerned, there is a shortage of Coal supply due to bureaucratic hurdles between Generation utility and Coal India. Plus the distribution utility has not been able to get into a good PPA ( Power Purchase Agreement) with neighbouring states. Thermal power plants like Parali are running under capacity due to coal shortage. Thus the supply is clearly less than the demand. The efforts are on the way to resolve it but yet no headway has been made. Hence the load shedding.Power losses in Transmission and Distribution also result in power shortages. The Discom and Transco have done a decent job controlling it. Power thefts and unauthorised connections also contribute to load shedding . But this problem is never addressed due to local constraints.As per the latest news , the Discom has agreed to buy power from neighbouring states and urban areas have been exempted from Load Shedding. However , unless coal supply is restored, Rural areas and Agricultural Feeders will face long power shortages.