MERC Regulations 24Chapter D · Electricity Purchase and Procurement

Section 24 · Approval of power purchase agreement/arrangement

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- 24.1 Every agreement or arrangement for long-term power procurement by a Distribution Licensee from a Generating Company or Licensee or from other source of supply entered into after the date of notification of these Regulations shall come into effect only with the prior approval of the Commission:Provided that the prior approval of the Commission shall be required in accordance with this Regulation 24 in respect of any agreement or arrangement for procurement of electricity by the Distribution Licensee from a Generating Company or Licensee or from any other source of supply on a standby basis:Provided further that the prior approval of the Commission shall also be required in accordance with this Regulation 24 for any change to an existing arrangement or agreement for long-term power procurement, whether or not such existing arrangement or agreement was approved by the Commission.

24.2

The Commission shall review an application for approval of power purchase agreement/arrangement having regard to the approved long-term power procurement plan of the Distribution Licensee and the following factors:

(a)

Requirement for power procurement under the approved long-term power procurement plan;

(b)

Adherence to a transparent process of bidding in accordance with guidelines issued by the Central Government;

(c)

Adherence to the terms and conditions for determination of tariff specified under Part E of these Regulations where the process specified in (b) above has not been adopted;

(d)

Availability (or expected availability) of capacity in the intra-State transmission system for evacuation and supply of power procured under the agreement/arrangement;

(e)

Need to promote cogeneration and generation of electricity from renewable sources of energy.
24.3Where the terms and conditions specified under Part E of these Regulations are proposed to be adopted, the approval of the power purchase agreement between a Generating Company and a Distribution Licensee for supply of electricity from a new generating station may comprise of two steps, at the discretion of the applicant:
(a)Approval of a provisional tariff, on the basis of an application made to the Commission at any time prior to the application made under clause (b) below; and
(b)Approval of the final tariff, on the basis of an application made not later than three (3) months from the cut-off date.

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