About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

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

What Is HeinOnline?

HeinOnline is a subscription-based resource containing nearly 3,000 academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline with pricing starting as low as $29.95

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most