Pragati-III is not violative of merit order dispatch

Pragati-III is not violative of merit order dispatch

Tata Power Delhi Distribution Limited v. Pragati Power Corporation Limited and Ors., CERC Judgement dated 24.11.2023 in Petition No. 122/MP/2021

The Central Electricity Regulatory Commission (“Central Commission”) in its Order dated 24.11.2023 in Petition No. 122/MP/2021 titled as “Tata Power Delhi Distribution Limited v. Pragati Power Corporation Limited and Ors.”, while deciding upon the allegations of violation of merit order dispatch as placed by Tata Power Delhi Distribution Limited (“TPDDL”) upon Pragati Power Corporation Limited (“PPCL”), inter-alia, held that PPCL operates its plant in accordance with schedules as provided by SLDC, and therefore, it cannot be held to be violative of the principle of merit order dispatch.

The Petition was filed by TPDDL under Sections 79 (1) (b) and 79 (1) (c) of the Electricity Act, 2003 seeking, inter-alia, adjudication of disputes with PPCL regarding forceful power scheduling and consequent violation of the principle of merit order dispatch.

In the present Petition, TPDDL had prayed the following:

1)            To direct PPCL to run its one unit as per the directions of the Hon’ble Supreme Court vide order dated 05.02.2018 and 16.7.2018 in W.P. (C) No. 13029/1985 (“SC Orders”), wherein GAIL India Ltd. was directed to provide APM gas to the tune of 1.564 MMSCD to Pragati III for running its one unit and not the whole module; and

2)            To take cognizance of the issue in hand and direct PPCL/SLDC to not get additional power scheduled over and above one unit as directed by the Hon’ble Supreme Court unless the same is requested by a specific beneficiary.

The Central Commission while passing the order dated 24.11.2023 held as follows:

1)            The SC Orders directed the gas supplier GAIL India Ltd. to ensure adequate gas supply to PPCL and, for PPCL to supply power to TPDDL and other consumers. The Hon’ble Supreme Court in its orders did not restrict the running of Pragati-III to one unit or up to 320 MW only linked to allocated APM gas.

2)            TPDDL, instead of approaching the Hon’ble Supreme Court seeking clarification of its orders, on this issue, has, after consuming power from Pragati-III for a long time, approached this Commission, by filing the present petition belatedly.  

3)            Since SLDC in its submissions had stated that ‘in the circulated power supply position, it has considered 525 MW generation from Pragati-III during summer and 400 MW during winters’, TPDDL was aware that one module (2 Gas Turbines and 1 Steam Turbine) has to be in operation to achieve 400 MW - 525 MW generation.

4)            With regards to the declaration of availability by Pragati-III, this Commission vide order dated 02.11.2017 in Petition No. 89/MP/2016 had held that PPCL is eligible for full capacity charges, even if TPDDL declares its availability based on the cheaper fuel/ higher cost alternate fuel (RLNG). PPCL on declaration of equipment availability, is eligible for full capacity charges having arranged sufficient fuel including RLNG.

5)            SLDC has been scheduling the module of the plant, and accordingly, PPCL has been operating the plant. Therefore, there is no irregularity in the scheduling by SLDC and that Pragati-III is being operated in accordance with the schedules provided by SLDC.

The Central Commission has found in favour of PPCL while observing that since TPDDL has sought the supply power up to 450 MW from PPCL, it cannot now after consuming the power from Pragati-III for 10 years, file the instant petition belatedly. This is a favourable decision for PPCL, whereby it has been held that PPCL operates its plant in accordance with schedules as provided by SLDC, and therefore, it cannot be held to be violative of the principle of merit order dispatch.

PPCL was represented by MSA Partners and a copy of the Order can be accessed here.