CERC reserves order on Dabhol petition

The decision comes at a time when the the Dabhol project has been closed down since last Thursday for want of gas

 

The Central Electricity Regulatory Commission  (CERC)  has reserved its order on the admission of petition filed by Ratnagiri Gas & Power Pvt Ltd  (RGPPl) on tariff revision for the erstwhile Dabhol power project and also allowing it to go in for an RLNG procurement. CERC's decision comes at a time when the Dabhol project with total generation capacity of 1,967 MW has been closed down since last Thursday for want of gas.

CERC chairman Pramod Deo told Business Standard "The Commission accepted the prayer of RGPPL.The respondent Maharashtra State Electricity Distribution Company (MahaVitaran) will file its written submissions by March 6 while RGPPL by February 20.Order in the petition was reserved."

RGPPL, which has filed its petition under section 79 of the Electricity Act, 2003 for resolving fuel related aspects, argued that the present case pertains to the circumstances under which fuel from designated source is not available for reasons not attributable to it and MahaVitaran's refusal to allow generation by alternate sources of fuel. It does not pertain to relaxation due to failure of gas turbines and non availability of machines. Therefore, RGPPL added that it has no alternative except to seek the relaxation of normative annual plant availability factor (NAPAF). Maharashtra is allotted 95% of its capacity while 5% has been allocated for a period of three months each to Goa, Daman Dadra and Nagar Haveli.

Further, RGPPL said the domestic gas has been allocated by the Government of India and if MahaVitaran requires the running of the generating station on liquid fuel, the same is arranged by it.According to RGPPL, the MahaVitaran is under obligation to pay the full fixed charges in the background of the fat that it is ready to fulfill the obligation of generating capacity with RLNG or enter into agreement with GAIL for RLNG. MahaVitaran's denial to five consent for RLNG is not attributable to it, RGPPL added.

However, MahaVitaran countered RGPPL's argument saying that the clause 10.4 of the power purchase agreement (PPA) relating to Force Majeure provides that "Fuel" is an exception and hence the latter's claim that non availability of gas is Force majeure is not acceptable. MahaVitaran said that RGPPL cannot be permitted to burden it with the huge cost of fuel.

MahaViataran has argued that the financial impact of granting consent to RGPPL to source fuel from alternate source would reflect in the land cost of power for 800 MW to it which would amount to Rs 4,792.42 annually. Considering full capacity charges the total cost (KGD6 gas and RLNG) would increase to Rs 6.75 per unit as against the existing Rs 4.28 per unit.  The financial impact of relaxing the normative annual plant availability factor for RGPPL to the actual availability would result in an additional burden of Rs 876.30 crore, MahaVitaran said.

According to MahaVitaran, RGPPL has sought virtual revision and review of the core elements of CERC's tariff order passed on August 18, 2010 where in normative annual plant availability factor of 80% has been fixed. However, RGPPL in its argument said that the relaxation of NAPAF in the order of August 18, 2010 as a one time dispensation as a special case relates to the failure of the gas turbines and the non performance of the machines.