Ministry of Power

17.01.2017

Electricity

Guidelines for Procurement of Electricity for Medium Term from Power Stations set up on Finance, Own and Operate (FOO) basis

MANU/POWR/0003/2017

Whereas the Central Government is engaged in creating an enabling policy and regulatory environment for the orderly growth of generation of electricity in accordance with the provisions of the Electricity Act, 2003 (the "Act");

Whereas it is incumbent upon the Central Government, State Governments, Electricity Regulatory Commissions and the distribution licensees to promote competition in the procurement of electricity through competitive and transparent processes;

Whereas the Central Government has, after extensive consultations with various stakeholders and experts, evolved a model contractual framework for procurement of electricity by the distribution licensees from power producers who agree to construct and/or operate power generating stations set up on 'Finance, Own and Operate' ("FOO") basis for medium term power or from Traders/Discoms having back to back arrangements with power producers.

Whereas the Central Government had, therefore issued vide its letter No. [No.23/17/2013-R&R] (Vol-II) dated 29th January 2014, the model documents comprising the Model Request for Qualification (the "MRFQ") and the Model Request for Proposal (the "MRFP"), and Model Agreement for Procurement of Power (the 'MAPP') (collectively, the "Modal Bidding Documents") to be adopted by the distribution licensees for procurement of power from the power producers.

Based on the above, the Government of India had notified the Guidelines vide resolution No. 23/17/2013-R&R (Vol-II) dated 10th February 2014, which were further amended vide resolution dated 20th August, 2015.

Whereas, the Central Government has, vide its letter No. 23/17/2013-R&R (Vol-V) dated 16th January, 2017 issued a single document as the "Standard Bidding Document" comprising both the Model Request for Qualification (the "MRFQ") and the Model Request for Proposal (the "MRFP"), and the Model Agreement for Procurement of Power (the "MAPP") (collectively, the 'Standard Bidding Document' and the MAPP are referred to as the "Model Bidding Documents") to be adopted by distribution licensees for procurement of electricity from the power producers/Traders/Discoms through a process of open and transparent competitive bidding through an electronic platform (DEEP e-Bidding Portal) based on offer of the lowest tariff from power generating stations constructed and/or operated on FOO basis. The link for the e-Bidding portal is www.mstcecommerce.com, and is also available on the website of Ministry of Power (www.powermin.nic.in) and PFC Consulting Limited (www.pfcclindia.com).

Now, therefore, in exercise of the powers conferred under section 63 of the Electricity Act, 2003, the Central Government hereby notifies these guidelines to be known as the 'Guidelines for Procurement of Electricity for medium term from Power Stations set up on Finance, Own and Operate (FOO) basis (the "Guidelines"). These Guidelines shall come into effect from the date of publication in the official gazette subject to the following terms and conditions:

1. The terms and conditions specified in the Model Bidding Documents referred to hereinabove shall, by reference, form part of these Guidelines and shall be treated as such.

2. The application of these Guidelines shall be restricted to projects from which power is procured in accordance with an Agreement for Procurement of Power for a period between one and five years, with a provision for extension of this period upto 25% of the initial contract period or one year whichever is lower, with mutual consent.

3. The tariff determined through the electronic bidding process based on these Guidelines comprising the Model Bidding Documents shall be adopted by the Appropriate Commission in pursuance of the provisions of section 63 of the Act. 4. Any deviation from the Model Bidding Documents shall be made by the Distribution Licensees only with the prior approval of the Appropriate Commission. Provided, however, that any project specific modifications expressly permitted in the Model Bidding Documents shall not be construed as deviations from the Model Bidding Documents.

5. The amendments made in the Guidelines for Procurement of Electricity from Thermal Power Stations set up on Design, Build, Finance, Own and Operate (DBFOO) basis vide Ministry of Power Resolution No. 23/9/2015- R&R dated 16th April 2015 in view of new coal block auction policy, shall also apply, mutatis mutandis, for procurement of electricity for Medium Term from Power Stations set up on Finance, Own and Operate (FOO) basis.

The 'Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licensees' issued on 10th February, 2014, as amended on 20th August 2015, including the Model Bidding Documents issued on 29th January 2014 and the amendment thereof are hereby repealed. Provided, however, that any agreements signed or actions taken prior to the date hereof shall not be affected by such repeal of the said guidelines and shall continue to be governed by the guidelines repealed hereunder.

Tags : Guidelines Procurement Electricity

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