THE MINISTER OF STATE IN THE MINISTRY OF POWER ( SHRIMATI JAYAWANTI MEHTA )
(a) : The Central Government has not signed any Power Purchase Agreement (PPA)
with any Independent Power Producer (IPP). The PPA is a contract between the State
Electricity Board and the IPP in which modalities for purchase / sale of power and
allocation of various risks are negotiated between the two parties for power projects.
The tariff for sale of power under the PPA is to be governed by the tariff notification
issued by the Government of India on 30.3.1992 under the provisions of Section 43(A)(2)
of the Electricity (Supply) Act, 1948. The tariff notification allows deviation from the
norms specified in the notification subject to certain conditions. Consequent upon
enactment of the Electricity Regulatory Commissions Act, 1998, the provisions of
Section 43(A)(2) have been omitted in respect of such States who have set up Electricity
Regulatory Commissions, thereby, transferring the tariff fixation powers to the Electricity
Regulatory Commissions.
(b) : The tariff notification dated 30.3.1992 provides that the tariff for sale of
electricity by a generating company to a State Electricity Board may also be determined
in deviation of the norms, other than the norms regarding operation and Plant Load
Factor (PLF), specified in the notification subject to the conditions that:-
(i) The overall per unit tariff of electricity calculated on the basis of the
norms in deviation does not exceed the per unit tariff calculated on the
basis of the norms specified in the notification;
(ii) The concerned State Government has, after satisfying itself, recommended
that the deviations are justified; and
(iii) The Central Government, after satisfying itself that the overall per unit
tariff is in accordance with condition
(i) above, approves the deviations.
The norms are not relevant in regard to private power projects awarded on the
basis of tariff based competitive bidding as per guidelines issued by the Central
Government.
(c) to (e) : At present, no proposal from any State Government for approval of
deviation is pending with the Central Government. However, in the past, the
Government has approved deviations in regard to the Dabhol power project in
Maharashtra, the Barsingsar lignite based power project in Rajasthan and the Malana
hydro-electric project in Himachal Pradesh. The Government of Andhra Pradesh had, in
August, 1998, proposed certain deviations in regard to the Lanco Kondapalli power
project, which could not be approved for want of certain clarifications from the State
Government. Meanwhile, the State Electricity Regulatory Commission has become
operational in the state of Andhra Pradesh and, therefore, the tariff issues for new projects
will be within the ambit of the Commission.
(f) & (g) : The Government of India has not faced any confrontation with private
power projects in regards to any proposal for approval of deviations. The award of
private power projects through competitive bidding has been made mandatory after
18.2.1995 and with the setting up of the State Electricity Regulatory Commissions, all
issues relating to tariff including PPA will have to be approved by the Commissions.
