The Hindu Business Line : NTPC's merchant plant route

When these plants come into the grid, a National Power Exchange will be functional, as envisaged by the Central Electricity Regulatory Commission (CERC).

In the draft paper on power exchange published by the CERC, the prices are to be discovered using the double-side bidding process, where the aggregated demand at different prices is matched with supply prices quoted by power producers, for different quantum. Such a system, as the paper points out, will minimise market manipulation by giving both buyers and sellers an equal say. Another factor one needs to keep in mind is that these merchant plants are planned on the balance-sheet of NTPC; NTPC's assets are built up by all the distribution companies and the erstwhile electricity boards.

It is but natural that the distribution licencees (or the electricity boards), while willing to accommodate some competition (read higher prices), expect that the prices are either discovered through the power exchange transparently or guided by sound tariff-setting principles, including the competitive route.

This is especially applicable for the large hydro stations that are being named merchant plants, where the benefit of lower tariff should not be denied to all the stakeholders, in the interest of one company.

Balakrishnan.V

Chennai

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