Discoms can terminate power purchase agreements after 25 years
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In a major relief for power distribution companies, the Central Electricity Regulatory Commission (CERC) has said that discoms are eligible to terminate power purchase agreements (PPA) after 25 years of operations.
In a case pertaining to BSES Yamuna Power Ltd, the power regulator has ordered the BSES discom to exit the PPA with NTPC's Dadri-I power generating station.
"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 are eligible to exercise the first right of refusal as per provisions of Regulation 17(2) of the 2019 Tariff Regulations," the order said.
It also said that the Centre's guidelines also permit the willing distribution companies to relinquish their allocation after a period of 25 years from Commercial Operation Date (COD).
It noted that the Delhi Electricity Regulatory Commission (DERC) has already written to Ministry of Power for de-allocation of share of distribution companies of Delhi. For relinquishment of their allocations, the petitioners may approach the Ministry, it said.
"Provisions of Regulation 17(2) related to first right of refusal would become effective once the Ministry of Power de-allocates share of the Petitioners from Dadri-I generating station," said the four-member bench headed by CERC Chairperson P.K.Pujari.
Describing the verdict as a landmark judgement, a BSES spokesperson said: "This will bring down the power purchase cost of the discoms and help in lowering the power tariff, thus benefiting the 45 lakh consumers of BSES in Delhi."
