Telangana’s PPA with NTPC continues to get delayed, other States keen to purchase

This may result in the State losing access to 85 per cent of the power generated by NTPC - Ramagundam Phase II

HYDERABAD: With the Congress government in Telangana delaying the Power Purchase Agreement (PPA) with the National Thermal Power Corporation (NTPC) – Ramagundam Phase II (3X800MW), the power corporation is getting demand for power supply from other States and is preparing to sign agreements with those interested. This might result in Telangana losing access to 85 per cent of the power generated by the NTPC – Ramagundam Phase II.

The NTPC had written to the State government last year itself asking it to sign the PPA for NTPC Phase-II and warned that the failure to do so may result in the allocation of power to other southern States. Though the Telangana government gave consent for availing 800 MW from Unit I of Phase II, which involves construction of three units of 800 MW each, the PPA is being delayed by the government citing different reasons, including cost factors.

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Given the scenario, other southern States, including Andhra Pradesh, Karnataka and Punjab are preparing to strike deals with NTPC. Accordingly, Andhra Pradesh has given consent for 1,000 MW, Karnataka for 600 MW and Punjab for 400 MW, excluding the 800 MW consent given by Telangana, said a senior official from NTPC.

“Talks are in advanced stage. We are hopeful that Andhra Pradesh will soon sign the PPA,” the official exuded confidence. Regarding the PPA by the Telangana government, the official said the matter was being persuaded and hoped that things would be finalised.

The 4000 MW NTPC-Ramagundam thermal power plant was assured under AP Reorganisation Act. Under the first phase, two units of 800 MW of the project were dedicated to the nation by Prime Minister Narendra Modi last year. Telangana was assured allocation of nearly 85 per cent of the total 4,000 MW power capacity.

Of these, the NTPC had completed installation and commission of 1,600 MW. To take up the remaining work on 2,400 MW and getting bank loans, the NTPC had to sign a PPA with the Telangana government. To this effect, the NTPC had appealed to the State government a few times but the efforts were futile. Though opposition parties have been demanding the State government to sign the PPA to ensure substantial power supply from NTPC, the Congress government has not done so.

Union Coal Minister G Kishan Reddy had cautioned the State government last year itself that any delay in signing the PPA would result in Telangana losing power supply from the plant.