PPA & LoA should be operated in tandem: PSERC
December 25, 2012 04:11 PM
By Vinod Gupta
CHANDIGARH: “Power purchase Agreement (PPA) and letter of assurance (LoA) should be operated in tandem for Talwandi Sabo thermal project ”, Punjab State Electricity Regulatory Commission (PSERC) decided while disposing of petition filed by Talwandi Sabo Power Limited(TPSL).
PSERC has strived to maintain a balance of interests of the consumers, the distribution utility and the generator in the State. The decision of Commission that LoA and PPA are part and parcel of contract is first of its kind in the country.
The commission delivered its judgment on petition no. 46 filed by TSPL alleging that PSPCL has failed to fulfill its obligation of arranging sufficient quantity of quality coal for the 3X660 (1980) MW Talwandi Sabo thermal plant.
The petitioner TSPL had contended that the firm will not be able to operate the plant beyond a certain PLF as a Mahanadi Coal field is assuring to supply 80% of the coal supply. It further submitted that as per model fuel supply agreement MCL would assure only 80% of Annual Contracted Quantity (ACQ). Moreover 80% of the ACQ would include 65% domestic coal and 15% imported coal. . The reduction in quantity and degradation of coal would increase the idle capacity of the plant.
Though PPA provides for use of domestic coal to generate electricity only. LoA envisaged the supply of coal from the mines of Mahanadi Coal fields Ltd. (MCL) and in the event of short supply the balance quantity of coal shall be met through imported coal available with MCL. Commission observed that since LoA and PPA should be operated in tandem occasionally imported coal available with Mahanadi Coal Field could also be supplied.
Commission further directed TSPL to vigorously pursue the matter with all concerned Government authorities for maintaining the status quo with regard to quantity& quality of coal committed as per the LoA. PSPCL will fully co-ordinate and co-operate with TSPL in this matter.
The availability of coal quality was well known to the petitioner and therefore demand of extension in time frame sought by the petitioner is not justified and hence not accepted.
As regards the prayer for allowing deemed generation benefits and payment of capacity charges and incentives there on to the petitioner in case the project cannot operate at its full capacity due to short fall in the supply of fuel, the same would be as per the terms of the PPA