PSERC rejects 'L and T' claim for additional benefits

16 November, 2012

Punjab State Electricity Regulatory Commission (PSERC) has rejected the claim of L&T for additional benefits and has instead passed on the benefits to the consumers.

PSERC, IN its November 12 order has disposed off petition no. 30 in relation to dispute arising out of Power Purchase Agreement (PPA) between L&T and Punjab State Power Corporation Limited (PSPCL). It may be mentioned that L&T is constructing 700 MW thermal plant at Rajpura.

PSERC disallowed the additional benefit claimed by L&T in view of mega power policy 2009, which was revised by Union Cabinet on October 1, 2009 before the last date of bid submission by them, but PSERC has instead passed on this benefit to consumers.

According to a PSERC official, the consumer will get 10 paise per unit relief from power generated from Rajpura thermal. The present power supply rate from this thermal plant is Rs. 2.99 per unit. The total benefits to the consumers would be Rs. 100 crore per annum for a period of 25 years.

PSPCL had contended that cut-off date of bid was October 2, 2009 whereas notification for Mega Power Policy, 2009 under which the project got status as MPP was issued by the ministry of power, on December 11, 2009. The fiscal benefits of mega power status were not available on the cut-off date and therefore 'Change in Law' claim is required to be passed on to PSPCL by way of reduction in tariff benefiting the consumers at large.

Regarding Mega Policy, 2009, the petitioner has submitted that the Union Cabinet’s decision to modify Mega Policy 2006, removing the condition of selling power to two or more states of thermal projects of 1000 MW or more capacity to be eligible for benefits under the policy was taken on October 1, 2009 and as such the project became eligible as Mega Power Project (MPP) for the benefits under Mega Policy 2009.

PSPCL denied that the Cabinet Meeting decision and its press release by PIB on 01.10.2009 itself amounted to 'Change in Law' and Mega Power Policy stood amended on that date.

Mega Power status to the project was awarded on July 30, 2010 after Government of Punjab agreed to fulfill the conditions required in respect of carrying out the necessary reforms for enabling a project being set up in the state for grant of Mega Power status. Project became eligible for grant of mega power status and acquired the same only after the state government carried out the requisite reforms on April 16, 2010.