CERC order: BSES to approach Centre to stop buying power from NTPC Dadri-1 power plant

According to CERC’s 2019 tariff regulations, discoms were given an opportunity to continue sourcing electricity which have completed 25 years on mutually agreed terms with generating companies.

The Central Electricity Regulatory Commission (CERC) has allowed one of Delhi’s power distribution companies (discoms) BSES to approach the Union power ministry for de-allocating its share of electricity supply from NTPC’s Dadri-I generating station. The plant supplies power at an average cost of Rs 6.50/unit, making it one of the costliest power stations providing electricity to the National Capital Region. “This will bring down the power purchase cost of the power distribution companies (diiscoms) and help in lowering the power tariff, thus benefiting the 45 lakh consumers of BSES in Delhi,” a spokesperson from the private discom in Delhi said.

BSES had entered a consolidated power purchase agreement (PPA) in June, 2007 with NTPC for supplying electricity from its various generating stations, including the 840 mega-watt (MW) Dadri-1 unit. The validity of the PPA was till March 2012, after which the two parties entered into a supplementary PPA extending the expiry dates supply period. The Dadri-I station, commissioned in December, 1995, completed 25 years of operation on November, 2020 and BSES claimed that the validity of the PPA was till the end of life of the respective generating stations from which NTPC was to supply power.

According to CERC’s 2019 tariff regulations, discoms were given an opportunity to continue sourcing electricity which have completed 25 years on mutually agreed terms with generating companies. The regulations also allowed the discom the “first right of refusal” for procuring electricity from old power plants. Accordingly, BSES in November, 2020 sought to stop taking power from Dadri-I generating station from December 1, 2020. BSES consumed 621 MW from the Dadri-1 plant, comprising 74% of the unit’s total capacity.

NTPC claimed that contracts with BSES were composite agreements in respect of the procurement of power from a number of generating stations of NTPC including Singrauli, Rihand Stage I, Anta, Auraiya, Dadri Gas, Unchahar Stage I and Dadri-I power plants. The state-run power generator said that BSES cannot object to procure power from the Dadri-I plant citing old age, while continuing to avail electricity from Singrauli and Rihand plants, which had completed 25 years even before Dadri-I.

The CERC said that “even if generating stations such as Singrauli and Rihand generating stations have completed 25 years of operation, the beneficiaries have the freedom whether or not to exercise their first right of refusal in availing power from those generating stations”.