Petition No.7 of 2008
Date of Order : 22.4.2008

1. Punjab State Electricity Regulatory Commission (Commission) has passed order dated April 17, 2008 in the matter of Petition No.7/2008 regarding approval of deviations from the Guidelines for Determination of Tariff by Bidding Process issued by the Ministry of Power, Govt. of India under section 63 of the Electricity Act, 2003 for inclusion of an incentive clause in the RFP document for early commissioning of Talwandi Sabo Power Project.
   
   
2. The petitioner in its letter dated 21st April, 2008 has submitted that while passing order dated April 17, 2008, the Commission has considered Article 11.1 of the PPA which stipulates payment of only energy charges for infirm power and not considered the clause 1.2.9 of Schedule 7 of the PPA which prescribes tariff for the period prior to the Scheduled COD to be the quoted tariff of the first year with escalation for relevant period only for energy charges. Thus, the order, in fact, does not allow any incentive to the Developer for early commissioning of the project as payment of quoted tariff is already provided in the PPA. The petitioner has requested for issue of a clarification in this regard and has made a prayer to modify the said order by allowing inclusion of the incentive clause in the RFP document as proposed.
   
   
3. On re-consideration of the matter, the Commission notes that clause 1.2.9 of Schedule 7 of the PPA does provide for payment of tariff, for the period prior to Scheduled COD equivalent to the quoted tariff of the first year with permissible escalation only for energy charges. The Commission also notes that no additional incentive emanates to the Developer for early commissioning of the project according to the said order. The Commission is further of the view that keeping in mind the requirement of meeting the increasing demand of power in the State and considering the high and fluctuating cost of traded power, it would be in the interests of both the consumer and the licensee to encourage early commissioning of the project.
   
   
4. In the light of the above, the Commission, in exercise of powers under Regulation 70 of the PSERC (Conduct of Business) Regulations, 2005 reviews its order of April 17, 2008, accepts the prayer of the petitioner and allows the inclusion of the incentive clause in the RFP document, as proposed by the petitioner, in addition to the tariff allowed as per standard PPA. Accordingly, the deviation on this account is accepted under clause 2.6 of the standard RFP document and clause 5.16 of the ‘Guidelines for Determination of Tariff by Bidding Process for procurement of power by distribution licensees’, issued by the Ministry of Power, Government of India.