CERC Grants Full Compensation To Indian Power Producers Operating Imported Coal-Based Plants
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According to a decision by India’s Central Electricity Regulatory Commission (CERC), power providers operating imported coal-based facilities are relieved. They must receive full compensation for greater operating expenses associated with providing electricity under unfavourable conditions. The ruling was made in response to a plea submitted by Tata Power Business. It enables the company to recoup all of the expenses spent on providing electricity last year as a result of the emergency directive from the Ministry of Power.
In May 2022, the MoP issued a directive requiring imported coal-based power facilities to run at full capacity and produce enough electricity to fulfil demand. According to their individual power purchase agreements (PPAs), these plants had to supply power to procurers, and any excess could be sold on the power exchanges. When a distribution company with which a power plant had a PPA did not schedule any power in accordance with the terms of the PPA, the power was to be offered to other PPA beneficiaries, and any excess was to be sold on the power exchanges.
The CERC made the decision in response to a petition filed by Tata Power Company Ltd. On January 3, 2023, the CERC stated- “The commission under Section 11(2) of the act is required to pay the petitioner compensation to cover the cost of the plant and a reasonable profit margin to ensure that the petitioner maintains and operates its plant to generate power for supply to the procurers in compliance with the directions of the MoP as per Section 11(1) of the Act.”
The CERC’s order will help the Coastal Gujarat Power Ltd., (CGPL) Mundra Plant as well as Tata Power recoup all expenses incurred for supplying electricity in accordance with the instruction of the Ministry of Power. Tata Power applauded the CERC’s decision to permit full reimbursement for the imported coal-based power plant’s provision of electricity in emergency situations.
Also Read:- Coal India Limited’s Output And Supply Increased
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