The Appellate Tribunal for Electricity (APTEL) has condoned a 70-day delay in commissioning ACME Heergarh Powertech (AHPPL)’s 300 MW solar power project in Rajasthan.

AHPPL, a special-purpose vehicle of ACME Solar Holdings, was granted a 104-day extension recognizing the COVID-19 pandemic and supply disruption in China as a force majeure event.

The Tribunal also dismissed an earlier order by the Maharashtra Electricity Regulatory Commission (MERC) imposing liquidated damages for the delay.

Background

Maharashtra State Electricity Distribution Company (MSEDCL) awarded 300 MW to AHPPL to develop a solar power project at Jodhpur, Rajasthan.

AHPPL also submitted a performance bank guarantee of ₹ $240 million (~$2.8 million).

The company signed a power purchase agreement (PPA) with MSEDCL to supply power generated from the project at a tariff of ₹2.72 (~$0.031)/kWh for 25 years.

As per the PPA, the project must be commissioned within 24 months. MSEDCL can forfeit the performance bank guarantee in case of project commissioning delays except for force majeure events.

With the onset of the COVID-19 pandemic, the Ministry of New and Renewable Energy ordered the pandemic to be treated as a force majeure event, and MSEDCL extended the Scheduled Commercial Operation Date (SCOD) until December 2021.

However, when AHPPL requested a second extension until September 2022 due to supply chain disruption in China, MSEDCL granted it an extension until March 2022.

To stop MSEDCL from encashing the performance bank guarantee, the company approached MERC to extend the SCOD to September 2022.

MERC directed MSEDCL not to take any coercive action against the company.

However, AHPPL commissioned the project in May 2022 and requested an extension for 70 days.

MERC granted an extension of 36 days and allowed MSEDCL to impose liquidated damages for the remaining period.

AHPL approached APTEL seeking relief from liquidated damages allowed by the MERC.

Tribunal’s Analysis

The Tribunal observed that AHPPL had informed MSEDCL about the force majeure event, and DISCOM had considered this.

It also questioned the start and end date of the force majeure event. The Tribunal said based on the schedule of module delivery from China, the force majeure event was from November 2021 to March 2022, totaling 104 days.

It extended the SCOD to May 2022 and condoned the delays in project commissioning.

It also disposed of the earlier MERC order asking AHPPL to pay liquidated damages for a delay period not covered by the extension granted.

In 2024, APTEL reprimanded the MERC for failing to conduct a thorough, case-specific examination of a petitioner’s grievances and provide clear reasoning when applying precedents.

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