Andhra Pradesh Regulator Approves Procurement of RECs by the DISCOM

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The Andhra Pradesh Electricity Regulatory Commission (APERC) recently ruled that the state distribution company (DISCOM) was entitled to procure renewable energy certificates (RECs) for the financial year (FY) 2019-20 and FY 2020-21.

It said that the revocation of the registration by the National Load Despatch Center (NLDC) was only for the financial year (FY) 2019.

Therefore, there was no bar on the Southern Power Distribution Company of Andhra Pradesh (APSPDCL) from procuring RECs in excess of the renewable purchase obligation (RPO) for FY20 and FY21.

APSPDCL had filed a petition seeking to procure RECs for FY20 and FY21 as per its eligibility and comply with the Appellate Tribunal for Electricity’s (APTEL) order in this regard.

Background

The state DISCOM, in its submission, stated that the annual status report on compliance of RPO submitted to the Commission for FY20 and FY21  showed that it had complied with the requirements to procure RECs.

APSPDCL clarified that APTEL’s order regarding the procurement of RECs was made about the already sold RECs and the unsold balance RECs for FY19 but not about subsequent years. Thus, for the ensuing years, APTEL’s order had no effect.

As per the APTEL’s order, the RPO target specified for a relevant year should not be not lower than that for the previous financial year.

Also, any shortfall in the non-solar or solar power procurement obligation set by APERC in the previous three years should be adjusted first.

Only the remaining additional procurement beyond the threshold RPO should be considered for issuance of RECs to the distribution licensees.

Commission’s analysis 

The Commission observed that only the additional procurement beyond the RPO target set by the Ministry of Power should be considered for RECs for FY20.

It noted that APSPDCL had procured renewable energy above the highest target set by the ministry in FY19 and FY20.

Also, there was no shortfall in renewable energy procurement in the last three years before the relevant year against the target RPO specified by the Commission. Hence, no adjustment was required for excess renewable energy to be considered for RECs for FY20.

The RPO target set for FY20 was not less than FY19.

Similarly, APSPDCL had procured renewable energy per the RPO target set by APERC and the ministry in FY20 and FY21, and there was no shortfall in renewable energy procurement in the last three years before the relevant year.

Hence, no adjustment was required for excess renewable energy to be considered for RECs for FY21.

After considering the facts, the Commission noted that the petitioner had procured renewable energy in compliance with the observations of APTEL and the Central Electricity Regulatory Commission. Therefore, the petitioner was entitled to procure RECs for FY20 and FY21.

In September this year, APERC announced RPPO targets until FY27. The RPPO targets are 18% for FY23, 19% for FY24, 20% for FY25, 22% for FY26, and 24% for FY27.

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