MERC Approves EPA Term Extension Of Tata Power

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Maharashtra Electricity Regulatory Commission (MERC) issued an order regarding  approval for extension of the Power Purchase Agreement between the Distribution Business of The Tata Power Company Limited and the Wind Energy Business of The Tata Power Company Limited.

Tata Power Company Limited- Distribution (TPC-D) has filed this Case seeking approval of extension of the Energy Purchase Agreement (EPA) with Wind Energy Business of The Tata Power Company Limited.

Main Prayers of TPC-D are as follows: a) Give approval to the extension of the term of the EPA in the form of an amended Terms and Conditions dated 14th March, 2020 executed between the Petitioner and TPCW for purchasing power from Khandke and Bramanwel Wind Projects till the completion of 13 years of commercial operation for respective projects i.e., till 7th May 2020 for Bramanwel and till 14th December 2020 for Khandke as per the tariff applicable for the 13th year; b) To pass any other order/relief as the Hon’ble Commission may deem fit and appropriate under the circumstances of the case and in the interest of justice.

The Commission shall review the tariff rate and the tariff structure for wind power

projects after 31st March, 2007 or on addition of 750 MW of additional wind capacity

after 1st April, 2003, whichever is earlier.During this review the Commission will not revisit any old projects.

The Commission directs the MSEB and other utilities/ licensees to modify draft EPA/EWAs to reflect the tariff provisions and principles of EPA / EWA as approved in the Order before executing the EPA/EWA with developers. The Commission further directs the MSEB and other utilities/ licensees to make all such EPAs/EWAs public.

Commission states that the original EPA between TPC-D and TPC-W was not required to be approved by the Commission as Wind Order, 2003 had laid down the principles of EPA which all contracting parties were required to comply with. However, from the submissions of TPCD, it is observed that to comply with condition of EPA tenure of 13 years in present case, TPC-D has amended these EPAs so as to comply with the condition of EPA tenure of 13 Order in Case No.89 of 2020 Page 7 years from the date of commissioning i.e. 8 May, 2020 and 14 December,2020 for Bramanwel and Khandke projects, respectively.

 The Commission notes that TPC-D has option of not extending these EPA and procure power through competitive bidding which would be much cheaper than the last year tariff of Rs. 5.30/kWh for these projects. However, considering the fact that these EPAs were based on Wind Order, 2003 and extension sought is just around a month for Bramanwel project and 9 months for Khandke project, in order to maintain equity for all the wind EPAs in the State and also to be consistent with the provisions of the Commission’s Wind Order, 2003, the Commission is inclined to allow such extension of EPA. Hence the Commission doesn’t have any objection for amending the terms of EPA till completion of 13 years from the date of commissioning.TPC-D has also not requested for the extension beyond completion of 13 years period from the commissioning of the projects. 

The commission passes a final order stating that it accepts the extension of EPA terms till completion of 13 years from the date of commissioning as executed through amended terms dated 14 March, 2020 executed between the parties to EPA and subsequent to expiry of EPA post completion of tenure, Tata Power Company Limited- Distribution shall procure power from the projects, through competitive bidding route only.

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