Inside Pages9Final.indd - Ministry of Power

under respective State Reforms Acts. These SERCs have
been continued under the provisions of Electricity Act,
2003.
So far twenty five states viz. Orissa, Haryana, Andhra
Pradesh, Uttar Pradesh, Karnataka, West Bengal,
Tamil Nadu, Punjab, Delhi, Gujarat, Madhya Pradesh,
Maharashtra, Rajasthan, Himachal Pradesh, Assam,
Chhatisgarh, Uttaranchal, Goa, Bihar, Jharkhand, Kerala,
Tripura, Sikkim, Jammu & Kashmir and Meghalaya have
either constituted or notified the constitution of SERC.
Joint Electricity Regulatory Commission (JERC) has been
notified for Mizoram and Manipur. JERC has also been
notified for Union Territories (except Delhi).
Twenty SERCs viz. Orissa, Andhra Pradesh, Uttar Pradesh,
Maharashtra, Gujarat, Haryana, Karnataka, Rajasthan,
Delhi, Madhya Pradesh, Himachal Pradesh, West Bengal,
Punjab, Tamil Nadu, Assam, Uttaranchal, Jharkhand,
Kerala, Chhattisgarh and Tripura have issued tariff orders.
viii) Appellate Tribunal For Electricity
Under the provisions of Section 110 of the Electricity
Act, 2003, the Appellate Tribunal for Electricity has been
established at Delhi which will hear appeals against the
orders of the Adjudicating Officer or the appropriate
Regulatory Commission under the Act. The Tribunal has
become operational from 21st July, 2005. The Tribunal
comprises of Chairperson & Judicial Member, Judicial
Member, 2 Technical Members.
B. RESPONSE FROM THE PRIVATE SECTOR
Private power projects being monitored by Central
Government: The response to GOI’s energy policy had
been initially encouraging. Since 1991, a total capacity of
around 7417.21 MW from 39 private power plants has so far
been commissioned and another capacity of around 5000
MW from 13 projects is under implementation. However,
there have been impediments in achieving the targeted
capacity from the private sector. The major impediments to
the speedy development of private sector power projects
are as follows:
i) Inability of SEBs and State Governments to provide an
acceptable payment security. The revenues of the SEBs
are not adequate to ensure payments to Independent
Power Producers. This is due to irrational tariffs and
poor collection efficiencies.
MINISTRY OF POWER
ii) Delay in finalisation of various contracts such as
PPA, Fuel Supply Agreement and Fuel transportation
Agreement acceptable to all the concerned parties.
Protracted negotiations on fuel prices, liquidated
charges/damages, risk covering clauses etc have
caused delays in many cases.
iii) Liquid Fuel and Gas constraints: One of the factors
responsible for poor private investments in thermal
power generation is the non availability of fuel at
competitive rates. Many initial projects under private
sector had proposed liquid fuels for power generation
so as to get quick returns on their investments but
due to volatility of price of naphtha in the international
market, projects became unviable and naphtha
reswitching over to natural gas. However, the pricing
mechanism adopted for natural gas i.e. linking the price
of domestically produced gas to international crude is
becoming an area of concern now. There is need to
expedite the development of indigenous natural gas
reserves as well as to rationalize the price of LNG so
that more and more private investors are attracted for
setting up of gas based power plants in the country.
iv) Problems in sourcing coal supplies and coal
linkages:
1. Difficult to get Coal Linkages for new Power
Projects. Even the linkages being granted are for
80% PLF (Contract Quantity). Out of this the coal
companies take guarantee to supply only 80% of
Contract Quantity which results into coal required
for approximately 64% PLF. This is not sufficient for
recovering full Fixed Capacity Charge as per CERC
norms (80% PLF).
2. The linkages granted are not from the mines
nearest to the Power Plants, which involves long rail
transportation thereby increasing the Power Tariff.
There is a need for expediting the coal allocations and
supplies for private power developers. There is an
enormous mismatch between the requirements of coal
for the power sector and the corresponding supplies.
This gap between supply and demand is expected to
further widen in the coming years, unless immediate
steps are taken for capacity augmentation in supply of
coal and imports to bridge the shortfall.
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