Ministry of Power Issues Amendments to Short-Term Power Procurement Guidelines

The new clause addresses the issue of the sale of power without the consent of the procurer

February 25, 2022


The Ministry of Power has issued amendments to the short-term power procurement (for a period of more than one day to one year) by distribution licensees through tariff-based bidding process guidelines.

The guidelines have been amended to address the issue of the sale of power by generators in the market without the consent of the procurer.

The government had notified the guidelines initially on March 30, 2016.

A new clause has been added to the existing guidelines, which states that if the seller fails to offer the contracted power to the procurer and sells it to a third party without the consent of the procurer, then the procurer can claim damages equivalent to twice the tariff for the contracted power or the entire sale value accrued from the third party as a result of the sale of power, whichever is higher.

This will be in addition to the liquidated damages per the existing guidelines for the failure to supply the contracted power capacity to the procurer.

Also, if the procurer complains to the state load dispatch center (SLDC) regarding this issue, the seller will be debarred from selling power on power exchanges and scheduling power in any short-term, medium-term, or long-term contracts for three months from the date of the default.

The period will increase to six months for the second default and one year for each subsequent default.

Recently, to simplify the short-term power procurement process, the Andhra Pradesh Electricity Regulatory Commission issued the ‘Terms and Conditions for Short-term Procurement and Sale of Power, Regulations, 2022.’ The regulations will apply to the state’s three distribution companies (DISCOMs). As per the new regulations, the monthly estimation of the power demand in each time block of 15 minutes will be carried out by the SLDC based on the past data and demand forecasts by the DISCOMs.

Last October, the Ministry of Power had approved the guidelines for optimum utilization of power generation capacity. As per the tariff policy, power generating stations must always be available and ready to dispatch. The Ministry had said that some power plants were not generating their total capacity at any given time. The capacity remained idle as it was tied up under the power purchase agreement (PPA).

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.