Thiruvananthapuram: Power minister M. M. Mani said the proposal to take over NTPC Kayamkulam was under the consideration of the state government. However, there is a disagreement over the cost.
NTPC has asked for Rs 500 crore while KSEBL is not willing to pay anything beyond '300 crore. KSEBL wants to retain NTPC Kayamkulam as a "stand-by" arrangement. "KSEBL is reserving this plant as a stand-by one to be operated during extreme emergencies like failure to obtain power from external sources due to corridor constraints," KSEBL had said recently in a submission to the Electricity Regulatory Commission. There are also plans to convert naphtha plant into LNG to reduce the power cost. "But the pipe-laying works for this has not even started," the power minister said. "There is also the concern that it would not be economically viable to lay pipes to generate just 360 MW," he added.
The ERC had strongly objected to KSEBL's decision to renew the power purchase agreement with NTPC Kayamkulam for another 12 years without the Commission's approval. The PPA has been extended even though prohibitive naphtha costs had forced KSEBL to virtually stop sourcing power from the NTPC plant for over three years. Power is not being sourced but the state has to keep paying an annual fixed charge of over Rs 300 crore as per the PPA. Further, the original understanding was that when the state takes 360 MW from NTPC, the state should receive an equal amount of cheaper power from the central pool. "No such cheaper power is seen ensured by KSEBL, nor has NTPC assured such power," a top ERC official said. The fixed cost of the plant has increased from about Rs 221 crore to Rs 301.16 crore per annum. The cost has risen in spite of the fact that fixed cost to the tune of Rs.3850 crore has already been realized by NTPC from KSEBL over the previous contract periods .
It is in this context that the ERC has worked out the cost of NTPC Kayamkulam. "The depreciated value of the project as on April 1, 2017, is only about Rs 300 crore, which is almost equal to one year's fixed charges as assessed by the central electricity regulatory commission," The ERC said in its order on April 27, 2017. The ERC also observed that the fixed cost for the Kayamkulam-based Rajiv Gandhi combined-cycle power plant (RGCCPP) (NTPC Kayamkulam) approved by the central electricity regulatory commission was unrealistic and the interest on working capital demanded by NTPC was exorbitantly high.
