State-owned electricity distribution companies (discoms) have evinced interest in procuring 1,400 MW from the central government scheme to salvage power plants without power purchase agreements (PPAs). PFC Consulting, a subsidiary of the Power Finance Corporation, and the NHPC are jointly negotiating with discoms to tie up medium-term PPAs (three years) for 2,500 MW generating capacity. \u201cCoordination with all the discoms is in process and it is expected that the balance demand of 1,100 MW shall be received shortly,\u201d a senior NHPC official told FE on conditions of anonymity. Also read:\u00a0New Rs 200, Rs 500 notes soon with RBI\u2019s Shaktikanta Das signature; check what happens to old notes In a recently concluded reverse auction, as many as 13 companies agreed to cumulatively sell 2,500 MW from their untied capacities for Rs 4.41 According to industry sources, 515 MW was won by Jindal Power, 290 MW by JSW Energy and 295 MW by Adani Power. This was the second round of such a pilot scheme. The first tranche had evoked a lukewarm response from the industry, with only seven power plants with a combined capacity of 1,900 MW agreeing to sell electricity against the call for 2,500 MW. However, the price discovered in the latest auction was 4% higher than the previous version. RKM Powergen, SKS Power, MB Power and Jaiprakash Power Ventures have won in both the auction tranches. \u201cThe tariff discovered is largely in line with the cost of generation for a recently commissioned coal-based power project having capital cost of Rs 7.0\u20137.5 crore per MW and with part availability of coal under long-term domestic linkage,\u201d Sabyasachi Majumdar, corporate ratings head at Icra, said. The latest price is also lower than the tariffs discovered (in the range of Rs 4.5\u20136\/unit) for short-term supply under various bids recently called by discoms, Majumdar said. To sweeten the deal for power plants after previous dismal response, the tariff structure for the PPAs would be split into fixed and variable cost on a 50:50 basis, allowing power producers to be compensated for a rise in fuel prices during the contract period. The pricing of electricity from unutilised capacities has also been de-linked from spot power prices. Power plants which signed PPAs in the earlier scheme were the units of IL&FS Energy (550 MW), RKM Powergen (550 MW), SKS Power (300 MW), MB Power (175 MW), Jindal India Thermal Power (175 MW), Avantha Jhabua Power (100 MW) and JP Nigrie (100 MW). Nigrie's quote of Rs 6.5\/unit was said to be the highest. Plants belonging to Jaypee, Jindal India, RKM, Avantha and SKS are already identified as stressed assets. Five states agreed to buy electricity through the scheme were Telangana (550 MW), Tamil Nadu (550 MW), Haryana (400 MW), Bihar (200 MW) and West Bengal (200 MW).