May 2015

May 13, 2015 11:39 am0 commentsViews: 131

PWI_MAY2015-1PowerWatch May 2015

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There were two significant orders by the Appellate Tribunal for Electricity (APTEL) this month. Both the judgments went against Maharashtra State Electricity Distribution Company Limited (MSEDCL). One was regarding payment of  xed charges by MSEDCL to RGPPL and the other was on purchase of power by an industry in Maharashtra from multiple sources.

MSEDCL entered into a power purchase agreement with RGPPL in 2007 to purchase entire power from Dabhol power plant. The PPA provided payment of capacity charges by the purchaser. Due to decline in the gas supply from the Krishna-Godavari Basin, RGPPL was forced to use imported gas i.e. re-gasi ed lique ed natural gas (RLNG). MSEDCL said RGPPL had  outed the PPA terms by using RLNG and it was legally bound to purchase power produced using only domestic gas. MSEDCL refused saying the increased tari would overburden customers. APTEL observed that as long as RGPPL can operate the generating station, the obligation to pay capacity charges throughout the term of the PPA exists. This obligation to pay the  xed cost to RGPPL by MSEDCL is independent of whether MSEDCL chooses to schedule power or not. .

In the second case, the green energy association of solar power generators in Maharashtra approached MERC since MSEDCL did not process Open Access application of the members of the association for over a year. So its members continued to inject energy in the grid without any revenue and incurred losses due to the delay in issuance of credit reports and Open Access permissions by the state utility. The state utility said there was no policy for solar power in Maharashtra and there were operational and billing di culties in case consumers procured power from multiple sources. Maharashtra Electricity Regulatory Commission (MERC) directed last year that consumers could procure power under Open Access only from a single source and directed the state utility accordingly. Aggrieved with the MERC order, the association went to APTEL and APTEL in its judgment clari ed that neither the Electricity Act, nor the erstwhile regulations of the commission on Open Access provide for such restriction and therefore there cannot be any restriction on consumers sourcing power from multiple sources.

In another development, the Power Ministry told the CERC to ensure that rates for power produced from auctioned coal blocks do not exceed PPA rates. All coal block bidders had bid negative and were planning to recover the di erence from energy charges. The ministry has now asked CERC to review energy components of the rate, which comprises the price of coal as per auction amount, transportation cost, washery and crushing charges, royalty and duties, and levies, which may hit power companies. The Standard Bidding Document for the coal auction disallows any pass through on the  nal rate and necessitates the generator to submit details of its  xed cost and  nal charge on the basis of the bid. Every negative bid of Rs 100 per ton means about six paise reduction in the power rate. The downward revision of the rate will be allowed as per change in law provision of the PPA.

Jayant D Kulkarni

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