MP cabinet nod must for future power purchase deals

Bhopal: The Madhya Pradesh Power Management Company Ltd (MPPMCL) has decided that all future long-term and medium-term power purchase agreements (PPAs) and power supply agreements (PSAs) will require prior approval from the state cabinet before implementation.

The decision was taken during a recent board meeting of the state-run power management company and is being seen as a significant policy shift aimed at increasing transparency and accountability in the energy sector. Till now, such agreements were approved at the board level of the company.

Officials said the move assumes significance because power purchase agreements involve long-term financial commitments that can impact the state for years. Under the revised process, all new agreements related to electricity procurement will undergo scrutiny at the cabinet level before being finalised.

The state govt currently has nearly 1,795 power purchase agreements of varying durations and capacities, with a combined contracted capacity of around 26,012 MW. Officials said the existing arrangements have helped Madhya Pradesh maintain uninterrupted power supply and function as an energy-surplus state.

Sources said the policy change also comes at a time when several new energy technologies are emerging, including biomass-based power, solar projects with battery storage, pumped hydro storage and nuclear energy. The govt reportedly wants wider consultation with the finance and energy departments before committing to fresh long-term purchases linked to such technologies.

Additional chief secretary Neeraj Mandloi said the board took the decision after detailed discussions while assessing the present and future energy needs of the state. He said the proposal would now be placed before energy minister Pradyuman Singh Tomar and subsequently sent for approval at the govt level before formal implementation.

Officials maintained that Madhya Pradesh currently has sufficient installed capacity from thermal, solar, wind and other renewable sources to meet its electricity demand. They added that the new approval mechanism is aimed at ensuring better governance and aligning future power procurement decisions with the state’s long-term energy policy.