CERC advises power min to amend electricity Act

Amidst rising fuel uncertainty faced by power producers, especially due to the change in policy by the respective countries, the Central Electricity Regulatory Commission (CERC) has advised the power ministry to modify the bidding guidelines under Section 63 of the Electricity Act, 2003, to enlarge the scope of regulatory intervention to take care of such situations.

Further, the CERC in its advice under Section 79 (2) of the Electricity Act, 2003, regarding the impact on tariff on the concluded power purchase agreements due to domestic coal availability, has also called for the amendments to the National Electricity Policy and Tariff Policy providing for intervention by the appropriate commission to take care of situations which have arisen and have been referred to the power ministry.

The CERC gave its advice on May 20, after the power ministry’s communication of May 9, referring to the need for securing fuel supply for various projects in order to ensure optimum generation from the power plants in the country.

The power ministry had said that non-availability of adequate quantum of coal has posed a serious challenge to power generation as reflected in the data compiled by the Central Electricity Authority, the plant load factor of  generation stations across the country has been severely affected for want of coal supply by Coal India and coal companies.

CERC’s advice also comes at a time when it has mooted the compensatory tariff formula to provide temporary relief to power projects set up by Adani Power and Tata Power.

On allowing the additional cost of imported coal under the existing provisions of the PPA, CERC said article 10.1.1 of the Standard PPA for procurement of power under case I bidding procedure provides for “Change in Law.”

According to CERC, for claiming any benefit under change in law, the project developer would have to move the appropriate commission and the decision of that commission in this regard would be final, in terms of the provisions of Articles 10.3.3 and 10.3.4 of the Standard PPA.

“The appropriate commissions are expected to take decisions on the merits of each case including the claims of the project developers for compensation on account of imported coal after consultation with the stakeholders.