By Manish Gupta
The Central Electricity Regulatory Commission (CERC) has clarified that Tata Power can supply power from its Mundra ultra mega power plant (UMPP) at full cost pass through as per Section 11 of the Electricity Act, 2003.
The power regulator had invoked Section 11 in February 2023 instructing all power plants, including the idle Mundra plant, to resume production to prevent any power shortages during the intense summer temperatures.
CERC, in its April 17 order, said that its Section 11 order will not come in the way of implementation of the supplementary PPA (power purchase agreements), which Tata Power is in negotiation with five states.
It may be noted that the Mundra facility had stopped its operations after hike in the price of its imported coal which made the PPAs it had with five states unviable. Talks are on to revise them and agree on supplementary PPAs.
“Ïn the event of materialisation and implementation of Supplementary PPA, TPCL shall be liable to generate and supply power in terms of the PPA dated 22.4.2007 as may be amended through the Supplementary PPA, and the directions in the present order shall not come in the way of implementation of the Supplementary PPA,” the CERC said in its order.
Power Ministry had issued directions to gencos using the powers under Section 11 of the Act in the light of current circumstances due to sharp increase in electricity demand. To maximise the generation. The Section 11 regime had already been notified on February 20, 2023, which has come into effect from March 16, 2023.
“The interim order notes that during the period when the Central Government has given directions under Section 11 of The Electricity Act, the obligations of the parties under the existing power purchase agreement for supply of power would not apply and the power supply obligations would only be governed by the said section 11 directions. Moreover, under section 11, the tariff would be determined by the commission on the settled legal principles of full cost pass through,” Tata Power said in a statement.
The power company further added that the Mundra generation plant is already producing power and supplying to the beneficiary states and will increase it further based on their requirements.
“The interim order of the CERC will not stand in the way of finalising the supplementary PPA with Gujarat and other beneficiary States and as such this is a positive development for Tata Power,” said a Tata Power spokesperson.