The Appellate Tribunal for Electricity (APTEL) has quashed the Haryana Electricity Regulatory Commission’s (HERC) decision to reject Power Purchase Agreements (PPAs) for 150 MW solar projects.

The Tribunal directed HERC to approve the PPAs at a revised tariff of ₹5.68 (~$0.068)/kWh, in line with the Central Electricity Regulatory Commission’s (CERC) tariff for 2016-17.

The projects, part of a competitive bidding process initiated by the Haryana Power Purchase Centre (HPPC), faced roadblocks after the Commission claimed that the process lacked transparency, did not meet competitive bidding guidelines for renewable energy generators under Section 63 of the Electricity Act, 2003, and that the deviations were not approved by the Commission.

Background

The petitioners participated in a competitive bidding process initiated by HPPC to procure 150 MW of solar power in 2015 at a tariff of ₹5 (~$0.060)/kWh.

The bidding process aimed to procure solar power through a competitive tariff-based model, and letters of intent were issued to the petitioners after they were declared successful bidders.

The petitioners faced issues when the HERC rejected the PPAs. The Chairman of HERC rejected the approval of the PPAs, arguing that the bidding process did not meet transparency standards and the discovered tariff was higher than in other states.

The lone member of the Commission dissented, stating that the MNRE issued no specific guidelines at the time, so the tender process could not be questioned. He argued that the tariff was competitive and aligned with market conditions. However, the Chairman of HERC rejected the approval of the PPAs.

The petitioners, who had already taken steps to set up solar power projects, were aggrieved by this decision and filed an appeal with APTEL.

Tribunal’s Analysis

The Tribunal reviewed the case and found the facts similar to a previous JBM Solar Power vs. HERC case.

The Tribunal pointed out that at the time of bidding, no specific guidelines were issued by the Ministry of New and Renewable Energy for such projects. As a result, the HERC’s argument that the process did not comply with competitive bidding standards was invalid.

The Tribunal rejected HPPC’s claim that the petitioners had not made sufficient progress in setting up their projects. It noted that the developers had secured land, arranged financing, and were ready to proceed with the project once the PPAs were approved.

The Tribunal observed that the tariff of ₹5 (~$0.060)/kWh, though slightly higher than those discovered in other states, was reasonable at the time. Moreover, the Tribunal directed HERC to approve the PPAs at a revised tariff of ₹5.68 (~$0.068)/kWh, in line with the CERC’s tariff for the year 2016-17.

In June, APTEL quashed a Karnataka Electricity Regulatory Commission order that rejected Photon Suryakiran’s petition asking for Bangalore Electricity Supply Company) not to reduce the tariff of the delayed solar project from ₹7.05 (~$0.084)/kWh to ₹6.51 (~$0.078)/kWh.

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