Madhya Pradesh Commission Rejects DISCOM’s Petition to Review Old Wind Tariff Order

M.P. Power Management Company Ltd had filed a petition for review of PPA.

February 20, 2019


The Madhya Pradesh Electricity Regulatory Commission (MPERC) has rejected the petition filed by M.P. Power Management Company Ltd (MPPMCL) to review the tariff order dated March 26, 2013, for wind power generators and amend the respective power purchase agreement (PPA). MPPMCL is the holding company for all the electricity distribution companies (DISCOMs) of Madhya Pradesh.

The commission observed that the tariff order is beyond the scope of review as the control period of that tariff order is already over and a new order for a new control period is now applicable. Moreover, it added that such reviews cannot be effective for more than three years.

It further said that the tariffs have been accepted by all the parties without any reservations and petitioner could not seek to review the tariff after generators have acted upon it.

The petitioner has argued that it is seeking the review of tariff order considering normative based capacity utilization factor (CUF) as 23 percent in place of 20 percent and corresponding tariff varying from 23 percent to 30 percent CUF.

However, the commission is of the view that changes sought by the petitioner in CUF are not valid as the generic tariff orders were issued considering the average CUF calculated during previous years along with the assessment of improved CUF in future years due to technological developments. And PPAs were executed accordingly during the respective control periods by the petitioner with the developers for the complete life of the project.

MPREC also noted that the commission is not empowered to revise or review the PPAs executed by the petitioner and the generators. The parties are bound to the terms and conditions of the agreements after signing the PPAs. It can only be altered through the mutual consent of both the parties. It says:

“The tariff rates will be firm for the project life and will not vary with fluctuation in exchange rate or on account of changes in taxes or any other reason whatsoever.”

Recently, MPERC dismissed a review petition filed by MPPMCL seeking relief against an order issued by the commission for a case between MPPMCL and Adani Green Energy. In 2017, Adani Green Energy had approached MPERC to provide relief in case of delay in payment of dues by MPPMCL.