NTPC’s Dadri-1 plant loses PPA after CERC order

Our Bureau New Delhi | Updated on July 02, 2021

The plant had completed 25 years in November

The Central Electricity Regulatory Commission (CERC) has permitted BSES Yamuna Power Ltd (BYPL) to end its offtake agreement with NTPC Ltd’s 210-MW Dadri-I thermal power plant in Delhi.

The supplementary power purchase agreement (SPPA) that NTPC and BYPL had signed in 2012 after the lapse of their original agreement was valid “till the end of life of the respective station considered in the tariff orders or Regulations issued by the CERC or Government of India allocations, whichever is later.”

Commissioned in 1995, the plant completed 25 years in November, which BYPL argued was grounds to end any contractual payment obligation as per the 2019 Tariff Regulations.

“We are of the view that in terms of the PPA and the SPPA and the fact that Dadri-I generating station having completed 25 years on November 30, 2020, the Petitioners [BYPL] are eligible to exercise the first right of refusal as per provisions of Regulation 17(2) of the 2019 Tariff Regulations,” the CERC agreed in its order on Thursday.

“The Dadri agreement was at a steep tariff of ₹6 per unit. We have been trying to optimise our power purchase costs, including exit from costly power plants and also to meet renewable purchase obligations,” a senior BYPL official told BusinessLine.

The order may have set a precedent that a discom can exit agreements with individual stations after the completion of 25 years from the date of commissioning.

“Government of India guidelines also permit the willing distribution companies to relinquish their allocation after a period of 25 years from commissioning date. Delhi Electricity Regulatory Commission has already written to Ministry of Power for de-allocation of share of distribution companies of Delhi,” the CERC said in its order.

BYPL in its submission told the CERC that NTPC is “coercing” the discom “to schedule power and is raising invoices towards fixed charges aggregating to approximately ₹35 crore a month even when the petitioners are not availing any power from Dadri-I generating station.” BYPL added that it has been “making payments of the invoices under protest” since NTPC can push for Letter of Credit (LC) defaults.

Published on July 02, 2021

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