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CERC order on ending PPAs comes as a big relief for Discoms

Suresh P Iyengar Mumbai | Updated on July 02, 2021

NTPC had denied exit to BSES Discoms; both cos approached CERC

The Central Electricity Regulatory Commission decision allowing power distribution companies to exit power purchase agreement on completion of 25 years of the power plant has come as a major relief to BSES.

Anil Ambani-led BSES had stopped scheduling power from Dadri -I plant of NTPC, in November 2020 on completion of 25 years of the plant from its commercial date of operation and had sought exit from the PPA.

However, NTPC had denied exit to BSES Discoms and both companies had approached the Central Electricity Regulatory Commission on the issue.

CERC’s ruling

CERC on Thursday ruled, the fact that since Dadri-I generating station has completed 25 years last November, the petitioners (discoms including BSES) are eligible to exercise the first right of refusal to relinquish their allocation.

Discoms may approach the Ministry of Power and their first right of refusal would become effective once the Ministry de-allocates share of the petitioners from Dadri-I generating station, said the CERC order.

Also read: Revamped distribution sector scheme positive for State Discoms, implementation is key: ICRA

A BSES spokesperson said the CERC has ruled that discoms have the right to terminate the Power Purchase Agreement after 25 years.

This will bring down the discoms’ power purchase cost and help in lowering the power tariff, thus benefit the 45 lakh consumers of BSES in Delhi, he added.

Published on July 02, 2021

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