HPGCL lost out on Rs 15,576 crore revenue during 2016-21, says CAG

Bhartesh Singh Thakur

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Chandigarh, August 11

The Comptroller and Auditor General (CAG) has revealed that Haryana Power Generation Corporation Limited (HPGCL) lost out potential revenue of Rs 15,576.80 crore, from 2016-17 to 2020-21, as all units of thermal power plants couldn’t be run on plant load factor (PLF) approved by the Haryana Electricity Regulatory Commission (HERC).

Position of plants deteriorated in merit order

The position of the thermal plants in the merit order deteriorated due to which the company (HPGCL) lost opportunity of earning potential revenue of Rs 13,449.61 crore by not generating 38,862.43 MUs of power. CAG

The PLF represents the percentage of actual generation to generating capacity of the plant. For a subsequent period, it is assessed by the HPGCL, and assessment is approved by the HERC considering all factors affecting generation. The actual PLF of each HPGCL unit was on decreasing trend during 2016-2021.

Had all units been run on the PLF approved by the HERC, the additional 49,559.73 MUs of power would have been generated, said CAG. The main reasons for the low PLF were forced outages due to various technical problems, poor planning in execution of works pertaining to capital overhauling, which resulted into prolonged shutdown of plants, and backing down instructions (BDIs) of units due to their higher variable cost, said CAG. A backing down refers to shutdown of the unit due to the availability of cheaper power elsewhere or less demand.

Out of the total outages of 1,94,580 hours (56.92 per cent of total available 3,41,832 hours), as much as 47.76 per cent outages were due to backing down of plants at the instructions of the DISCOMs — Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitram Nigam (DHBVN).

The CAG report, tabled in Haryana Legislative Assembly, on August 10, pointed out that the generation at power plants declined from 10,567.83 MUs in 2017-18 to 5,466.81 MUs in 2020-21. The generation was below the normative generation, approved by the HERC, and ranged between 42.61 and 69.24 per cent during 2017-21. The management of HPGCL replied (May 2022) to audit that effective steps had been taken to minimise the forced outages and reduce backing down of plants by minimising the cost of power.

DISCOMs are bound to schedule power on the basis of ranking of all approved sources of supply in the order of their variable cost. The merit order is decided every month on the basis of variable cost (generation cost) and point of connection (POC) charges (transmission losses) of electricity by the generating stations. The most expensive generator is kept at the top of the merit order and gets the least opportunity to supply power.

As per the merit order, plants of the HPGCL were one of the expensive plants among the 33 power plants. Their ranks in merit order ranged between first and 13th during 2016-17 to 2020-21. “The position of the thermal plants in the merit order deteriorated due to which the company (HPGCL) lost opportunity of earning potential revenue of Rs 13,449.61 crore by not generating 38,862.43 MUs of power,” said CAG.

The management replied to audit that the HPGCL plants were backed down on not being scheduled by DISCOMs due to erroneous merit order.

Unit-II of the Rajiv Gandhi Thermal Power Plant (RGTPP), Hisar, got damaged (September 2020) due to irregular loading pattern. The HPGCL had not carried out any cost-benefit analysis either go for repair or purchase new equipment. The High Intermediate Pressure (HIP) rotor had been received during January 2022 but the unit could not be commissioned due to non–receipt of associated spares. It resulted in the non-recovery of the fixed cost of Rs 396.77 crore from the DISCOMs apart from the loss of potential revenue for the forced shutdown period.

The company suffered a generation loss of 63.80 MUs of green energy valuing Rs 30.73 crore in respect of the Western Yamuna Canal Hydro Electric Project due to acceptance of non-interchangeable blades and delay in completion of overhauling work of machines. Due to lesser generation, DISCOMs had to purchase 63.80 MUs of power from other sources resulting in an extra burden of Rs 30.73 crore on consumers, said CAG.