APERC rejects Transco-BPL deal

By Our Special Correspondent

HYDERABAD, NOV. 6. The Andhra Pradesh Electricity Regulatory Commission issued a landmark order here today rejecting the Power Purchase Agreement (PPA), proposed by the AP Transco with the BPL, regarding the latter's project being set up at Ramagundam with an installed capacity of 520 MW.

The Commission said it is its `right and duty' to review any PPA relating the same to consumer interests thus rejecting outright the `opinion' given by the former Chief Justice of India, Mr. Justice P. N. Bhagwathi, that the modifications made to the original PPA were outside the purview of the Commission.

The order, issued by the Commission Chairman, Mr. G. P. Rao, and its two members, fixed the `threshold' plant load factor for the BPL project at 80 per cent, doing away with the original 68 per cent. It held that the incentive on output should be based on `actual generation' and not on `deemed generation.' The concept of deemed generation was widely criticised by the petitioners who participated in the public hearing conducted by the Commission on July 2 and 3 apart from political parties.

Summing up its stand, the Commission observed that the PPA did not take into account the interests of the consumer fully so that it was not able to approve it.

It also passed stipulations regarding the risk of foreign exchange variation allowed under the PPA, thereby rejecting this very concept which was present in some PPAs.

The order comes as a setback to the process under which there are many more PPAs in the queue covering many private projects, most of them gas-based coming up in the gas-rich Konaseema region. In the present case, the BPL, can modify the PPA and approach the Commission along with the Transco for approval.

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Section  : Southern States
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