The Ministry of Power in a letter dated 4th December 2020 shared a document intended for public consultation on a proposal to enable DISCOMs to exit from inter-state, cost-plus PPAs after completion of 25 years. Some detailed comments and suggestions from PEG on the proposal are attached. They cover issues related to:

  • optimisation of DISCOM power procurement cost by having conditionality that no base-load capacity is to be added by participating utility for atleast 5 years
  • syncing scheme with larger state/utility capacity addition plans and ensuring approval of state regulator after a public process before participation
  • considering amending BPSA for selected capacity instead of relinquishing the BPSA in entirety as utilities will have to give up capacity of varying vintages and variable costs
  • clarification needed for treatment of coal allocation for the relinquished/retained PPAs.

Though the proposal was intended for public consultation (as mentioned in the cover letter), it is not available on the current notices section of the website of the Ministry of Power.Given the potential impact on power procurement cost, consumer tariffs, coal allocation and investments, it is suggested that the document or a revised document be uploaded for public consultation on the MoP website with at least 21 days provided for comments and suggestions.