Madhya Pradesh regulator refuses to reopen PPAs to revise wind power tariff

Madhya Pradesh regulator refuses to reopen PPAs to revise wind power tariff

Madhya Pradesh regulator refuses to reopen PPAs to revise wind power tariff
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The Madhya Pradesh Electricity Regulatory Commission (MPERC) has turned down the state electricity distribution companies’ (discoms) petition to revise the rates at which they procure wind power.

“The power purchase agreement has no renewal/revision/review clause empowering the Commission to revise the tariff,” MPERC noted.

The MP Power management company — the holding entity of the state’s discoms — wanted the regulator to review its order passed in March 2013, which had set a 25-year levelised tariff of `5.92 per unit for power procured from wind energy projects commissioned thereafter. The discoms also sought the right to refuse the additional power supplied by the wind power plants, when they run at more than the prescribed normative capacity utilisation levels. The state-owned utility pointed out that the normative capacity utilisation factor was increased to 23% in a 2016 tariff order, from 20% in the 2013 diktat. The levelised tariff for wind power was set as `4.78 per unit in 2016.

The regulator said that it cannot grant the discoms the right to refuse the additional power as the Union power ministry’s 2017 guideline on wind power procurement specifies that such allowances can be made only if the PPAs have the enabling provisions.

Discoms of Andhra Pradesh had also approached the state’s electricity regulator to change the parameters used to determine the tariffs of wind power plants in the southern state, claiming that shift in market dynamics and technological interventions does not justify the `4.84-a-unit tariff — determined through the earlier mechanism — anymore and has “resulted in unjustified burden on the consumers of the state”. The Andhra regulator is waiting to receive comments from other stakeholders on the issue.

The lowest wind tariff discovered in the maiden bidding hosted by the Central government auctioned in February 2017 was `3.46 per unit and it has fallen to lower than `3 per unit in the subsequent auctions.

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