Draft Electricity Amendment Bill plans contract enforcement body

Coal Insights Bureau

The power ministry has issued the revised fourth draft of the Electricity (Amendment) Bill recently that proposes setting up an Electricity Contract Enforcement Authority (ECEA) having power of a civil court to settle disputes related to power purchase agreement between distribution companies (Discoms) and generation companies (Gencos).

The draft provides that the ECEA will have sole authority to adjudicate matters related to specific performance of contracts related to purchase or sale of power, between Gencos and Discoms.

The decision of the ECEA can be challenged at the Appellate Tribunal For Electricity (APTEL).

Association of Power Producers has welcomed the amendments while opposed by All India Power Engineers’ Federation.

“We support ECEA as contract enforcement is the weakest part in the power space - everything is on best effort basis, may it be coal companies, distribution utilities or transmission companies. An agency exclusive for contract enforcement, with adequate powers was required. However, the area of adjudication between ECEA and tariff commissions needs to be delineated without any ambiguity, to avoid any contest for space,” Ashok Khurana, director General of Association of Power Producers said.

“The setting up of ECEA would dilute the power of the state and central regulatory commissions to settle matters related to power purchase agreements between discoms and gencos,” All India Power Engineers’ Federation (AIPEF) VK Gupta said.

Currently, state electricity regulatory commissions and Central Electricity Regulatory Commission settle state-level and inter-state PPA disputes, respectively.

Association of Power Producers however is of the opinion that the authority with powers like arrest and attachment of property would help instill discipline amongst the contracting parties.

The development comes at a time when Gencos are yet to get around `92,602 crore from the Discoms as of February end according to data available at the Payment Ratification And Analysis in Power procurement for bringing Transparency in Invoicing of generators (PRAAPTI) portal.

Key amendments on enforcement authority

109A. Establishment of Electricity Contract Enforcement Authority

♦ ECEA shall have the sole authority and jurisdiction to adjudicate upon matters regarding performance of obligations under a contract related to sale, purchase or transmission of electricity, provided that it shall not have any jurisdiction over any matter related to regulation or determination of tariff or any dispute involving tariff

♦ Every contract between a generation company and a licensee shall be filed with the Appropriate Commission within 30 days of the said contract having been concluded

109B. Application to ECEA

♦ Any person aggrieved in any matter referred to in section 109A may prefer an application to the Electricity Contract Enforcement Authority

♦ Every application shall be filed within a period of six months from the nonperformance of the obligation under the contract but ECEA may entertain an application beyond six months if there is sufficient cause

♦ Every application be accompanied by such fee as may be prescribed

♦ On receipt of an application ECEA may after giving the parties an opportunity of being heard, determine whether a valid contract subsists between the parties and whether any party is in violation of any of its obligations under the contract