DPC did not generate a single mega watt on December 31, January 1, 2, 3, 4 and 6 following the MSEB's decision not to purchase power for "being a loss-making and uneconomical proposition."

DPC also closed its generation units on Sunday. However, DPC, which has a generation capacity of 728 mw, generated 180 mw and sold it to MSEB on January 5. MSEB has been purchasing nearly 176 mw to 190 mw per day in the last few months following its inability to shell out funds towards power purchase bills.

Top MSEB sources confirmed these developments and told The Financial Express that it would not be possible to continue the purchase of power from DPC at a higher cost. "It is better to bear the monthly burden of Rs 95 crore towards fixed charge and not to go in for power purchase at even 60 per cent capacity. We can't think of power purchase at 90 per cent capacity," the sources added.

Furthermore, the winter season has come to the rescue of MSEB as it had to continue load shedding for only 300-400 mw during evening peak every day. "There is less power consumption due to dip in the termperature in various parts of the state which has brought a major relief for us," a senior MSEB official said. He, however, added that it had continued load-shedding only during the evening peak.

"We can refrain from the power purchase from DPC under these circumstances which is, in fact, quite beneficial for us," he added. According to MSEB, DPC, which has two gas turbines and one steam turbine with a base cacpacity of 658 mw and peaking capacity of 70 mw, had closed down its generation in June-July following MSEB's decision not to purchase power due to sufficient power availability following high frequency in the system.

Moreover, MSEB did not draw power from DPC, as for three weeks there was a plant outage and thereafter there was a breakdown in one of the turbines during November. In such circumstances, DPC is entitled to pay certain compensation to MSEB as per the power purchase agreement.

As far as power purchase bills to DPC is concerned, MSEB has been defaulting since January 2000 ranging between six and 30 days. It is yet to pay nearly Rs 432 crore since October 2000 to DPC. Since the inception of Dabhol phase-I in May 1999, MSEB has not purchased power at 90 per cent capacity (487.84 million units). MSEB had purchased as many as 408.45 million units in November 1999, 429 MUs in December 1999, 447 MUs in April 2000. It had purchased as low as 39.12 MUs at a per KwH cost of Rs 25.29 in June 2000.

MSEB has also decided to default the payment as it has also received a tacit support from the state government which has expressed its inability to provide a monthly support of Rs 130 crore to tide over the situation.

DPC sources admitted that there was no drawal from MSEB. These sources said that it would have to take a decision soon to open the letter of credit in the wake of MSEB's decision to default.