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23 Supremo Amicus [1] (2021)

handle is hein.journals/supami23 and id is 1 raw text is: SUPREMO AMICUS VOLUME 23 ISSN 2456-9704 POWER PURCHASE AGREEMENT AND ITS AMBIVALENCE BETWEEN SUSTAINABILITY AND SANCTITY OF THE CONTRACT By TSR Praneetha From Damodaram Sanjivayya National Law University 1. INTRODUCTION The privatization of power sector has certainly led to dissemination of energy'. This gave 2. consumers a choice between state and private organizations. But there is a necessity to see that various participants do not take advantage of such privatization by abusing their dominant position in the market. These interests are seen to be protected by CERC and SERC, when they determine tariff rates as framed in a PPA.2 In this regard, it is pertinent to understand what a Power Purchasing Agreement (hereinafter PPA) is. It basically is a technical and industry agreement, dealing with purchase of power from a GENCO by a DISCOM.3 It is in a way so platitudinous to be mentioning that either generation or 1The Electricity Act 1887 regulated the use of electrical energy so as to protect the public. The later Electricity Act of 1903, the local governments were given the power to grant licenses for generation of electricity. As mentioned in Dr. Sai Ram Bhatt & Rohith R Kamnath, Power Sector Contracts in India, 2 Energy Law & Policy in India, 101 (2016) 2Piyush Joshi, Law Relating to Infrastructure Projects, 259 (LexisNexis Butterworths India, New Delhi, 2ad edn., 2003). 3As mentioned in Dr. Sai Ram Bhatt & Rohith R Kamnath, Power Sector Contracts in India, 2 Energy Law & Policy in India, 101 (2016), check for Sample PPAs: http://ppp.worldbank.org/public-private- partnership/sector/ energy/energy-power- agreements/power-purchase-agreements, currently page not found distribution of electricity will need adequate financing.4 So, as to evade any possible conflicts and conundrums which are bound to arise, PPAs are entered by the companies.5 There are certain prolific advantages which can be conferred by the virtue of PPAs. Like, for example, financial guarantee, which is otherwise so uncertain, can be assured. It can be used for facilitating an agreement through which the terms in the agreement can be understood easily.6 But it is not always so laidback in regard to such understanding about the scope of PPA and the legal disputes of sanctity or sustenance of a contract. DISPUTE SETTLEMENT MECHANISMS AND JURISDICTIONAL ISSUES As to the legal disputes, dispute resolution bodies (as per the Act), SERC and CERC are seen to be adequately acting in dealing with the conflicts between various stakeholders. They are conferred with the quasi-judicial powers so that they can be adjudicating upon the disputes which are related to issues of all the three sectors.7 SERC will only be relevant if it is about intra- state matters and CERC has a much extended bombshell application.8 Their powers not being solely confined to adjudication, but also extend 4Mandakini Ghosh & Parinay Deep Shah, Power Purchase Agreements & Questionable Sanctity, 2 Energy Law & Policy in India, 108 (2016) 1lbid 6Joshi at pg: 335, n. 2 7 The Electricity Act, 2003 (Act 36 of 2003) §. 86 (1) (b). As per §. 86 (1) (b): regulate electricity purchase and procurement process of distribution licensees including the price at which electricity shall be procured from the generating companies or licensees or from other sources through agreements for purchase of power for distribution and supply within the State. 8See M/s Pune Power Development Private Ltd. v. KERC, Appeal No. 200 of 2009 (APTEL); Lanco Amarkantak Power Pvt. Ltd. v. MPERC, Appeal No. 7 of 2009 (APTEL). PIF 6.242 www.supremoamicus .org PIF 6.242 www.supremoamicus.org

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