Power purchase pact behind overhaul in Electricity Dept in Punjab

In a week of sweeping changes, the Punjab Government has replaced the Chairman-cum-Managing Director of the Punjab State Power Corporation Limited (PSPCL) and Punjab State Transmission Corporation Limited (PSTCL), sacked the Director (Power Generation) and suspended a Chief Engineer overseeing two state-run thermal power plants.

These actions have created ripples in the power corridors, especially as such action against as many top officers has been unprecedented.

At the centre of the turmoil is the signing of a Power Sale Agreement (PSA) and a Power Purchase Agreement (PPA) between the PSPCL and two private power companies.

While official orders cite “high fuel cost” at state-run plants compared to private thermal units as the reason for the dismissals and suspension, insiders say the real issue is the controversial renewable power deals. Senior officials in the Power Department allege the PSA and PPA, covering the purchase of 150 MW of solar power for 25 years, were signed without prior government approval and could burden the PSPCL with liabilities of up to Rs 12,500 crore. “The rate at which the power is proposed to be bought is Rs 5.13 and Rs 5.14 per unit. However, when solar power is available for Rs 3 per unit, why should the PSPCL commit to buying power at such high rates?” a senior functionary told The Tribune.

PSPCL technocrats insist that all procedures were followed. They said the power tenders were floated by the Solar Energy Corporation of India (SECI) and the Long Term Power Purchase Committee and the PSPCL Board of Directors (BoD) approved the deals.

“After the minutes were approved, the BoD also granted approval for filing the requisite petition (for approval) before the Punjab State Electricity Regulatory Commission (PSERC). The BoD is authorised to take these decisions. But the government did not allow the technocrats to file the petition, leading to confrontation,” said a senior technocrat.

Engineers hold meet

The PSEB Engineers Association has, meanwhile, called these actions an attempt to exert undue pressure on engineers. At a meeting of the executive committee of the association on Wednesday, a strong objection was placed on record regarding the undue political interference in technical operations, day-to-day functioning, procurement processes, negotiations and board agendas. It would seriously undermine the efficiency and long-term stability of the power sector, they said.

“The executive observed that such actions will not only be contrary to the vision of ‘zero power outage’ by March 2026, but also impair the quality and reliability of power services being provided to the people,” said a resolution of the association. They have also decided to launch protests against the decision. The executive committee also resolved to remain vigilant and appealed to all engineers to stay prepared for a collective action.