The National Review Committee on the power and energy sector has found that excess pricing in the sector was structurally embedded in contract design.
The committee said many power purchase agreements (PPAs) include guaranteed capacity payments regardless of actual electricity generation, as well as take-or-pay obligations even when power is not required.
The committee shared its findings at a press conference held today at Bidyut Bhaban.
The committee further said that these deals have fully passed through fuel costs, exchange-rate risk, foreign-currency indexation and sovereign guarantees.
“Together, these provisions shifted nearly all commercial and macroeconomic risk to the public sector while guaranteeing stable returns for private producers. Once embedded in 20–25-year contracts, these excess costs became durable fiscal liabilities,” the committee said in its final report submitted recently.
It also found that Adani’s tariff was the highest among comparable Indian power import contracts at the time and escalated faster than its peers.
“This indicates that high costs were not inherent to cross-border trade but the result of specific contractual choices. Similar risk allocation and pricing patterns were found across multiple other large projects, pointing to a systemic pattern rather than isolated anomalies,” the report added.
The committee recommended a sequenced reform agenda focused on governance rather than capacity expansion. It called for full transparency through the publication of all PPAs, amendments and payment data, and urged the restoration of competitive procurement as the default approach for new projects with effective and transparent processes.
It also recommended rebalancing risk allocation in future contracts and cancelling agreements where there is evidence of corruption. The committee advised continuing corruption investigations to gather further evidence in other cases and pursuing good-faith renegotiation of the most fiscally damaging legacy PPAs.
In addition, the committee proposed the establishment of an Independent Energy Oversight Commission reporting directly to parliament.
