States are not required to sign power purchase agreements (PPAs) with Gencos for electricity related transactions on the PUShP portal, which has been specifically created to facilitate temporary allocation of power for a certain period.

The National Power Committee (NPC) in its meeting, earlier this month, discussed the issue raised by representatives from Punjab on NTPC insisting on separate PPAs for transactions on the portal.

The state-run power generator had said that beneficiaries are required to enter into a generic PPAs for the power allocated to them through the PUShP portal as well as to comply with the scheduling requirements as per the provisions of Electricity Act and regulations.

In response, NPC Chairperson opined that there are terms and conditions which an entity has to agree before login to the PUShP portal. NTPC may add any specific points in these terms and conditions and there is no need to enter into a separate PPA with the states for the portal.

No separate PPAs

The NPC in its December 2023 meeting also deliberated on the issue of separate PPAs raised by Punjab.

NPC’s Member Secretary said that in the December 2023 meeting, it was concluded that allocation of power through PUShP portal is of temporary nature and the original allocation of power gets reinstated once the temporary allocation ceases to exist.

“Further, the PUShP portal facilitates temporary allocation of power for a certain period which was earlier done by Power Ministry (MoP)/Regional Power Committees (RPCs). In case of temporary re-allocation of power being done by MoP/RPCs, separate or another PPAs with the states/buyers was not required. In line with this, the separate PPA for the power allocated through PUShP portal may not be necessary for creation of contracts and scheduling of power,” the Member Secretary added.

The NPC decided that a buyer having adequate letter of credit (LC) or a Payment Security Mechanism (PSM) or advance payment with a central generating station (CGS) or a Genco may be considered as valid PSM by CGS/ Gencos for both short term and long term temporary power allocation through the portal.

However, in absence of adequate LC/ PSM/ advance payment, CGS/ Gencos may review the existing LC/ PSM on regular intervals and request buyer to enhance LC/ PSM/ advance payment or ask for additional LC/ PSM/ advance payment for the short term and long term temporary power allocated through PUShP portal, it added.

Capacity utilisation portal

PUShP portal is a national-level generating capacity utilisation mechanism to help states, which are facing power cuts, buy power. The tariffs are regulated and determined by the concerned regulatory commissions. Power crisis is generally observed during the months of April, May, September and October. It was created by the Central Electricity Authority (CEA).

The portal was launched on March 9, 2023 and began power transactions on April 3. So far, 20 states and union territories have started using the portal for declaration and requisition of surplus power. As of February 3, 2024, a total of 94 requests were completed for allocation.

Currently, Bihar, Rajasthan, Andhra Pradesh, Jharkhand, Maharashtra, Odisha, Tamil Nadu, Uttar Pradesh, Haryana and Assam are updating their electricity requirement on the portal as and when required by them.

The portal will also act as a match-making platform for banking of power. Here, states can declare the surplus power that they are willing to bank for a certain period of time.

Any other state who wants to acquire this surplus power in a deficit scenario and is willing to undergo banking with the surplus state, may give requisition for this surplus power for the same duration in the Portal as per their mutual agreement.

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