Millennium Post

Case-I power plants will get to pass fuel hike to consumers

New power projects that will come up under the Case-I bidding norms would be allowed to pass through any increase in fuel price to the end consumer. The new standard bidding documents for the plants that will come up on Case-I bidding has been finalised by the Power Ministry.
Under the guidelines, the concerned power companies would be permitted to transfer any increase in the fuel cost to the consumer, a source close to the development said.

Case I is an open bid where the developer has to decide for fuel and location and compete against any other developers in general.
In Case II bids, the developer is expected to bid on the basis of specific fuel and location where the specifics are provided by the Central or the state government whichever is calling for the bids.

The Standard Bidding Documents or SBDs for the projects with Case-II bidding will be finalised by an Empowered Group of Ministers (EGOM). The meeting of the EGOM is yet to be finalised.

Sources added that the new guidelines (for the Case-I projects) will be for the plants that are yet to sign the Power Purchase Agreements (PPAs) with the procurers.

The new bidding norms were provisionally finalised by the Power Ministry in July, last year. The ministry has also decided that there will be no change in the bidding guidelines for imported coal-based projects.In September 2011, the Indonesian government linked their fuel prices to the international market, thereby making it a costlier proposition for the Indian power companies sourcing the fuel from the island nation.
As far as the domestic fuel-based projects are concerned, the ministry has proposed a separate set of bidding for coal linkage and captive coal projects.

The documents have proposed that for projects where the location of the plant is not specified, the bidding would be done among the domestic coal linkage holders.
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