IPPs Are Objecting to Power Supply at Variable Cost

Even as the State Government has decided to cancel memoranda of understanding (MoUs) of 11 companies for tardy progress of their thermal power projects, independent power producers (IPPs) have now raised objection to the clause of supplying 12 per cent power at variable cost in the changed scenario.

As per the MoUs signed with IPPs in 2006, an authorised agency of the State Government will have the right to purchase 25 per cent of the power generated over 80 per cent of the plant load factor (PLF) at variable cost plus incentives and the cost of the power will be determined by the Central Electricity Regulatory Commission.

Besides, the MoUA memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... provides the State Government the right to purchase up to 25 per cent of the power generated from plants of the IPPs under mutually agreed terms and the tariff of such power will be determined by Odisha Electricity Regulatory Commission (OERC), the MoUA memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... said.

This apart, the Government had imposed a cess of six paise per unit of energy sold outside the State and the collection will go to the Environment Management Fund.

However, the clause was changed in the MoUs signed in 2009 and subsequent years. The Government kept the right to purchase 14 per cent of the power generated at variable cost in case coal block is allotted inside the State. Otherwise, the IPPs have to provide 12 per cent power at variable cost to be determined by OERC.

“The companies have signed the MoUs with the condition that the State Government will facilitate allotment of coal blocks. After cancellation of coal blocks, the investors will now have to go through auction route. Under this changed scenario, supply of power at variable cost will not be viable for the projects,” sources in the power industry said.

The State Government’s demand for 25 per cent free power from coal-based thermal power plants and 33 per cent free power from plants based on coal-washery rejects has been strongly opposed by the IPPs on similar grounds.

Chief Secretary G C Pati is likely to review the status of the MoUA memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... signed with IPPs this week and a final call will be taken on the projects which have not made any progress, sources in the Energy department said.

The department has identified SPI Ports Ltd, NSL Nagapatnam Ltd, Nava Bharat Power, Astaranga Power, Bhushan Energy, KU Projects, JR Powergen, Chambal Infrastructure, Sahara India Power, Adhunik Power and Visa Power for cancellation of MoUs.

Meanwhile, MoUs of five IPPs __ Visaka Thermal, Monnet Power, Ind Barath Energy (Utkal) Ltd, Maa Durga Thermal Power and Mahanadi Aban __ have been renewed.

The other five MoUs, which have been approved by the Government but pending for renewal, include JITPL, CESC Ltd, BGR Energy, GMR Kamalanga and Lanco Power.

What the MoUA memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... States

The MoUA memorandum of understanding (MoU) is an agreement between two (bilateral) or more (multilateral) parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in situations where the parties cannot create a legally enforceable agreement... provides the State Government the right to purchase up to 25 per cent of the power generated from plants of the IPPs under mutually agreed terms

The tariff of such power will be determined by OERC

The Government kept the right to purchase 14 per cent of the power generated at variable cost in case coal block is allotted inside the State

http://www.newindianexpress.com/states/odisha/IPPs-Are-Objecting-to-Power-Supply-at-Variable-Cost/2015/05/18/article2820332.ece

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