Recommending formulation of a decadal State Energy Policy and establishment of a State Energy Planning Council and Energy Directorate to bring in professionalism, the Gurucharan Committee has suggested re-negotiation of high-cost power purchase agreements and creation of agriculture development fund to take care of farm subsidies to IP sets. It has also recommended setting up of a holding company, and treat KPCL, KPTCL and ESCOMS as subsidiaries with ESCOMS becoming only service provider companies.
Pointing to payment of ₹5,032 crore in 2020-2021 without purchasing power, the committee that submitted its report to the State government on Monday has said that such payment in the last three years totalled to ₹10,174 crore. It said that the PPAs amount to 78% of the total cost, and the State has signed an agreement with PPAs for 25 years. The committee said that for 2022-2023, the total power purchase cost stood at ₹39,223 crore for 71,646 MUs at an average cost of ₹5.48 per unit. “This includes 18,073 MUs from 12 sources which account for 25% of the average cost coming at ₹7.37,” the committee noted, and suggested re-negotiation of high cost PPAs.
The Gurucharan Committee was set up to recommend restructuring of the State power sector and advance second generation distribution reforms. The committee has identified flight of HT consumers due to exorbitant tariff, high power purchase cost, inefficiencies in operation, free power supply, unmetered/unbilled energy and inequitable tariffs among the constraints and challenges in power distribution business. The report was submitted to Chief Minister Basavaraj Bommai.
