MoP allows discoms to draw electricity after the expiry of PPA

The Ministry of Power (MoP) has notified that the distribution companies (discoms) can purchase power from the common pool after the expiry of power purchase agreement (PPA).

The new guidelines are a result of the concerns of generating companies, who were burdened with expensive assets as discoms frequently choose to purchase electricity from power plants with fewer costs of operation. Due to this practice’s imbalance, the generating companies were left with a portfolio of more expensive assets. After careful consideration, it has been confirmed that the generator and the buyer should have equal rights. After a PPA expires, both parties are released from their duties to supply or purchase power from one another. The parties can enter into a new agreement, supporting the idea of bilateral freedom in the power industry. The generator also has the choice to make bilateral agreements with any organisation they choose to sell power through exchanges. This strategy guarantees the creation of a fair and competitive market.