Power regulator Central Electricity Regulatory Authority (CERC) has allowed Reliance Infrastructure companies BSES Yamuna Power and BSES Rajdhani Power to exit power purchase agreements (PPAs) with NTPC Dadri-I power plant, which completed 25 years of service on November 30 last year. 

The CERC order is in sync with the efforts of the BSES power distribution companies (discoms) operating in Delhi to optimise their power purchase costs, including exit from the costly power plants, as also to meet their renewable power purchase obligations (RPOs) as mandated by the Delhi Electricity Regulatory Commission (DERC). 

Under the RPO, the discoms are required to purchase a certain proportion of electricity from renewable sources as mandated by the power regulators. They can also buy renewable energy certificates to meet the RPO. 

The order can be a potential trigger for more such petitions from discoms, demanding that they be allowed to exit PPAs that are no longer beneficial or necessary, yet affecting the bottom line of the companies. BSES hailed the order as “landmark that will help in lowering the power tariff, thus benefiting the 45 lakh consumers of the company in Delhi”. 

Under Regulation 17 (2), the discoms have the first right to refuse the purchase of electricity from a power plant against their allocation. 

The power regulator noted that the government guidelines also permitted the willing discoms to relinquish their allocation after 25 years from COD (commercial date of operation) and that the DERC has already written to the Power Ministry for de-allocation of share of discoms of Delhi.