In a major reprieve for the Rs 65,000 crore NTPC Ltd, the apex power regulator has dismissed a petition filed by the Association of Power Producers (APP) — a lobby group representing private power developers — that alleged the state-owned power generator had abused its "dominant" market position.
APP had wanted the Central Electricity Regulatory Commission (CERC) to cancel power pacts signed by NTPC with state distribution utilities between October 1, 2010, and January 5, 2011. The private developers, in the petition, had claimed that NTPC — the country's largest power generator — had succeeded in achieving "near absolute horizontal foreclosure" for new players to enter into the market by signing up pacts to add capacity worth 37,000 MW during the three months.
The regulator also did not see any need to refer the matter to the Competition Commission of India. NTPC had signed these deals in the run-up to the January 5, 2011, deadline for a phase-out of the MoU (memorandum of understanding) route for bagging generation projects.
The power ministry, through its Tariff Policy, had made it mandatory for utilities to shift to the tariff-based competitive bidding model for signing up PPAs post January 5, 2011.
"We hold that the power purchase agreements (PPAs) signed by NTPC are within the framework and the time permitted under the Tariff Policy and therefore, no direction is called for under Section 60 of the Act. The petitioner has requested to refer the matter to the Competition Commission of India under Section 21 of the Competition Act, 2002. In view of our finding hereinabove, we do not consider it necessary to refer the matter to the Competition Commission of India for its opinion," CERC said in its order of April 26.
Twelve power producers, including Adani Power, AES (India), CLP Power India, Reliance Power, Essar Power, GMR Energy, Tata Power, Jindal Power, JSW Energy and Lanco Infratech, had moved the joint petition.
The CERC, in its order, noted that NTPC's share of the country's installed power generation capacity was only 19.50 per cent, which cannot be considered as "market dominant".
Also, between 2005 and 2011, the PPAs signed by NTPC were of the order of 52,000 MW which were less than (around 50 per cent) the commissioned and under construction capacity by the private players, aggregating at 1,05,000 MW.
Therefore, the regulator maintained that the private producers' claim that their operations are affected by NTPC's PPAs was "untenable". When contacted on the issue, NTPC officials declined to comment.
An APP representative too maintained that he would not like to comment on CERC's judgement.
Source- Indian Express