NELP gas only for plants that sell power at regulated rates


New Delhi : Natural gas tapped under the New Exploration Licensing Policy (NELP) will be supplied to power plants on the condition that electricity produced from the gas shall only be sold to distribution networks at tariffs set by the regulator, Power Minister Jyotiraditya Scindia said Thursday.

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“Empowered Group of Ministers (EGoM) has decided that the existing and future allocations of New Exploration Licensing Policy (NELP) gas to power plants be subject to the condition that the entire electricity produced from the allocated gas shall only be sold to the Distribution Licensees at tariffs determined or adopted (in case of bidding) by the tariff regulator of the power plant,” Scindia told the Lok Sabha in a written reply.

The minister said the supply of gas will start only after the plant has signed the Power Purchase Agreement (PPA) and this would be only for the duration of the PPA.

“The PPA may be initially for one year (short term PPA) during which electricity shall be sold at the tariff determined by the regulator and the subsequent PPA should be for medium term or long term,” he said.

The power minister was replying to a question whether the government had directed plants that avail gas at concessional rates not to sell power produced at exorbitant prices.

Scindia further clarified that his ministry had not received any complaints about power companies in this regard.