Citizens' Issues
Gujarat Electricity Regulatory Commission orders Adani to honour Power Purchase Agreement

Order states that Adani Power Ltd cannot terminate the PPA with Gujarat Urja Vikas Nigam Ltd for non-execution of the fuel supply agreement with the Gujarat Mineral Development Corporation

The Gujarat Electricity Regulatory Commission, in its order on 31st August, has directed a power company to honour its Power Purchase Agreement (PPA) signed with the state's electrical services company at the same pre-determined rate.

The agreement signed between Gujarat Urja Vikas Nigam Ltd (GUVNL) and Adani Power Ltd (APL) fell through after the latter issued a notice to the government entity stating that it was terminating the PPA on grounds of non-availability of coal from the Gujarat Mineral Development Corporation (GMDC). The PPA, which was signed on 2 February 2007, states that APL would supply 1,000MW of electricity to GUVNL for 25 years @ Rs2.35 per kilowatt-hour (kWh). 

But GUVNL objected to the termination of the PPA and filed a petition before the Gujarat Electricity Regulatory Commission. When Consumer Education and Research Society (CERS) joined the petition to protect the interests of electricity consumers of Gujarat, it was opposed by APL. 

Subsequently, KK Bajaj, Hon. Director, CERS, said that society should be allowed to join the petition as the termination of the PPA would have put an additional burden of Rs1,156 crore on the consumers of Gujarat. The Commission, in its order dated 17 April 2010, allowed CERS to join the proceedings as per Section 94 (3) of the Electricity Act, 2003.

In its representation, CERS stated that according to the PPA clause, APL will provide electricity by use of imported coal, indigenous coal or blended coal and does not depend only on GMDC. Therefore, the PPA should not be terminated based on non-availability of coal from GMDC, argued CERS. The entity also cautioned the Commission that this being the first-of-its-kind case of termination of a PPA, the verdict will set a precedent for the power sector.

Finally, on 31st August, the commission ruled in the favour of GUVNL. The order  stated: "Adani Power Ltd cannot terminate the PPA dated 2 February 2007 on the basis of it not having executed the fuel supply agreement with GMDC and, therefore, cannot be relieved  of its obligation from the supply of power  to the GUVNL in accordance with the terms of the PPA."


Turkmenistan, Afghan, Pak, India to sign gas pipeline deal

Islamabad: Turkmenistan, Afghanistan, Pakistan and India are scheduled to sign a landmark agreement for a multi-billion gas pipeline project in Ashgabat on 20th September, reports PTI quoting Pakistan's petroleum ministry.

The pact will be signed by the petroleum ministers of the four countries at Ashgabat, the capital of Turkmenistan.

Petroleum and natural resources minister Syed Naveed Qamar will represent Pakistan at the signing ceremony of the Gas Pipeline Framework Agreement (GPFA) for the TAPI gas pipeline, a statement issued by the ministry said.

The TAPI project is meant to bring natural gas from Turkmenistan to Pakistan and India via Afghanistan.

The heads of state of Turkmenistan, Afghanistan and Pakistan signed an inter-governmental agreement (IGA) for joint oil and gas pipeline projects between the three countries in 2002.

India joined the project in 2008 and a revised GPFA was initialled for the induction of India, thus changing the name of the project from TAP to TAPI.

An ADB sponsored pre-feasibility study, conducted in 2004, indicated that the 1680km pipeline project was economically and financially viable.

It estimated the cost at $3.3 billion though the figure was revised to $7.6 billion in 2008. The pipeline would be designed to carry 3.2 billion standard cubic feet per day (BSCFD) gas from Turkmenistan, delivering 0.5 BSCFD to Afghanistan and 1.35 BSCFD each to Pakistan and India.

The proposed signing of the GPFA would be a landmark achievement as the project has seen no progress since 2008, Pakistan's petroleum ministry said.

President Asif Ali Zardari had reactivated the project during a recent telephone discussion with his Turkmen counterpart Gurbanguly Berdymukhamedov.

"Mr Zardari has directed Syed Naveed Qamar, federal minister for petroleum and natural resources, to expedite concluding various agreements with the target of finalising Gas Sales Purchase Agreement by the end of this year or early next year," the statement said.

After the signing of the GPFA in Ashgabad next week, the countries plan to convene rigorous rounds of negotiations to finalise the Gas Sales Purchase Agreement during a proposed TAPI summit in Ashgabad.

"The renewed attention to this project from the present government would lead to significantly improving energy availability for Pakistan and help resolve the energy crisis," the petroleum ministry said.


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