Electricity regulator CERC has ruled that state-run NTPC did not abuse its dominant position in signing power purchase agreements, as alleged by private power producers.
The ruling came on a complaint filed by the Association of Power Producers which had alleged that NTPC had abused its dominant position in signing power purchase pacts for about 37,000 MW capacity prior to the coming into force of tariff- based bidding regime in January 2011.
The association is a grouping of private companies including Tata Power, Reliance Power and JSW Energy.
"We hold that the PPAs signed by NTPC are within the framework and the time permitted under the Tariff Policy and therefore, no direction is called for under section 60 of the Act," the Central Electricity Regulatory Commission (CERC) said in its order dated April 26.
Section 60 of the Electricity Act relates to market dominance.
Further, CERC noted that it did not consider it necessary to refer the matter to fair trade regulator Competition Commission of India (CCI) for its opinion.
The Association of Power Producers had filed the petition against NTPC in May 2011.
The order came on the issue of "conduct of NTPC during October 2010 and January 5, 2011 in rushing to sign Power Purchase Agreements for supply of 37,000 MW of electricity abusing its dominant position, thereby causing adverse effect on competition in electricity industry".
When contacted, Association of Power Producers' Director General Ashok Khurana said it would pursue legal action.
"We (association) will take legal opinion and will pursue legal action," he said and asserted that by signing these PPAs, NTPC had blocked the space for private players.
Currently, the Association of Power Producers have about 30 members.
NTPC, in its submission on July 13, 2012, had indicated to the CERC the status of projects with capacity of 35,600 MW for which the PPAs have been executed by NTPC but which are unlikely to be taken up during the 12th Plan as the investment approvals were still under process.
"Consequently, there is sufficient time frame available for the stakeholders to adjust long term plan for capacity addition, transmission planning and fuel requirement.
"... It needs to be emphasised that the distribution companies and state electricity boards who have signed the PPAs with NTPC have planned their future requirement of power accordingly," CERC said.
Citing consumer interests, CERC said all these projects should be implemented in a time bound manner.