Discoms free to exit power purchase pact after term ends

The Power Ministry has informed states and central power generation companies that power distribution companies (discoms) are permitted to exit power purchase agreements (PPAs) after completion of the term of the agreements. The clarification comes after an order by the Central Electricity Regulatory Commission (CERC), noting that BSES Yamuna Power was within its rights to stop buying power from state-owned NTPC Ltd’s power generation station in Dadri as it had completed 25 years of useful life in late 2020.

“… State/Discoms may relinquish entire allocated power from such projects which have completed 25 years since the commissioning of the project,” the Power Ministry said in a clarificatory note, adding that power supply from other projects would continue as per the terms of the PPA.