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APR 23 2015

MSEDCL would pay Capacity Charges to RGPPL

  • Economic Times, ET Bureau / Hyderabad
  • Created: Thu 23rd APR 2015

 MSEDCL had filed an appeal under section 111 of the Electricity Act, 2003 against the CERC order dated 30.07.2013, whereby the petition filed by the generating company under section 79 of the Electricity Act, 2003 was allowed by the Central Commission for recovery of Fixed Charges for its gas based power plant. 

Earlier, CERC after hearing the matter, passed the impugned order dealing with the obligation of MSEDCL to pay the capacity charges and energy charges as per terms and conditions of the PPA dated 10.04.2007. The Commission also held that the provisions of Article 5.9 of the PPA, dealing with Gas Supply Agreement (GSA) and Gas Transportation Agreement (GTA) and the requirement of taking consent / approval of the appellant to the contracting terms and price related only to the energy charges specified in Article 5.3 of the PPA and it has no implication to the capacity charges payable as per Article 5.2 read with Article 4.3 of the PPA. CERC, vide the impugned order, clearly held that MSEDCL is liable to pay capacity charges even when MSEDCL does not give consent to the GSA or GTA. MSEDCL had said that the implication of the impugned order would result in saddling the consumers of Maharashtra with an annual additional liability of Rs.7772 Crores. 

APTEL has upheld the order of CERC and has directed that MSEDCL is required to pay  capacity charges to RGPPL even if MSEDCL does not given consent for  GSA/GTA because there is no change of fuel falling under the  category of primary fuel to the liquid fuel.  

The order is expected to act as a huge relief to RGPPL which has been suffering for long because of various issues and primarily on account of Gas Availability/Cost. The asset has long been on the verge of becoming an NPA. The lenders however may get some comfort from this order and also the Gas Pooling Policy of the Government of India.



Maharashtra Maharashtra State Electricity Distribution Company Ltd Ratnagiri Gas Power Pvt. Ltd Central Electricity Regulatory Commission Gas Electricity Act Energy Power Plant Appellate Tribunal for Electricity Gas pooling Gas supply Power Electricity India

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