APTEL Directs Haryana Power Agencies to Procure Power from a Disputed Solar Project

The Appellate Tribunal for Electricity (APTEL) has issued an order directing the Haryana Electricity Regulatory Commission (HERC) and the Haryana Power Purchase Centre (HPPC) to allow injection of electricity generated from a 1 MW solar power project owned by Balarch Renewable Energy.

The APTEL in its order stated, “the developer will be entitled to inject electricity in the grid for supplying to HPPC at the tariff approved by the Central Electricity Regulatory Commission (CERC) for such projects for the year 2016-17.” The CERC had fixed ₹5.68 (~$0.09)/kWh (without accelerated depreciation) as tariff for solar projects in 2016-17.

The Case

Balarch Renewable Energy Pvt. Ltd. (appellant) had appealed against the impugned order passed by the HERC (respondent 1), nullifying the power purchase agreement (PPA) signed between the developer and HPPC (respondent 2), to supply power.

Letter of Intent (LoI) was issued to Balarch Renewable Energy by the HPPC on March 27, 2015, for procurement of 1 MW of solar power. The PPA was entered by both parties on June 15, 2015. Grid-connectivity for the project was approved in 2016.

When PPA was submitted to HERC for approval, the HERC had said that the PPA was not in line with the purported competitive bidding guidelines for renewable energy generators under Section 63 of the Electricity Act, 2003. The deviations were not approved by the HERC and hence the power purchases were invalid.

In response Balarch Renewable Energy mentioned in its petition to APTEL, the impugned order passed by the HERC is perverse and has the effect of the entire project established by it turning into a stranded asset in which a huge amount has been invested and the developer is incurring monthly losses which are getting accumulated.

During its investigation, the APTEL came across previous cases in which the HERC had allowed for purchase of electricity from similar projects at tariff fixed by the CERC. Accordingly, the APTEL has ordered the HERC and HPPC to allow the injection of power from the 1 MW solar project to the grid at a tariff of ₹5.68 (~$0.09)/kWh, the solar tariff fixed for FY 2016-17 by CERC.

The APTEL is the only dispute resolution authority that hears appeals against the orders of the adjudicating officer or the CERC or state regulatory commissions or joint commission.

Image credit: APTEL