MoP releases amendments to guidelines for short term procurement of power through tariff-based bidding process

The Ministry of Power (MoP) has released amendments to guidelines for short term procurement of power, i.e.,for a period of more thanone day up to one year, by distribution licensees through tariff-based bidding process, to address the issue of sale of power by generators in the marketwithout the consent of the procurer.

A new clause added to the existing guidelines states that power purchase agreement (PPA) proposed to be entered with the selected bidders shall include necessary details on consequences on sale of contracted power to third party without consent of the procurer. If the seller fails to offer the contracted power as per the PPA to the procurer and sells this power without the procurer’s consent to any other party, the procurer shall be entitled to claim damages from the seller for an amount equal to the higher of – twice the tariff as per PPA for the corresponding contracted power, or the entire sale revenue accrued from third parties on account of sale of this contracted power. On complaint by the procurer to the concerned load dispatch centre, the seller will be debarred from participating in power exchanges and also from scheduling of this power in any short / medium / long term contracts from that generating station for a period of three months from the establishment of default. The period of debarment shall increase to six months for second default and to one year for each successive default.