The Appellate Tribunal for Electricity (APTEL) has set aside the Himachal Pradesh Electricity Regulatory Commission’s (HERC) dismissal of a petition for determining the tariff for a solar project.

Background

The appellant, GR Enterprises, set up a 1 MW solar project in Tehsil Nahan, Sirmour district, Himachal Pradesh. It entered a power purchase agreement (PPA) with Himachal Pradesh State Electricity Board (HPSEBL) in 2017.

Per the PPA, the project must have been commissioned before March 31, 2018, for a higher tariff to apply.

The appellant claimed that it synchronized its project with the grid on March 30, 2018, and was entitled to a tariff of 5.31 (~$0.061)/kWh. HPSEBL agreed to a tariff of ₹4.37 (~$0.050)/kWh, arguing that the project was not fully commissioned by the deadline.

The appellant requested the payment of bills with higher tariffs and served HPSEBL with a statutory notice. Both parties were unable to resolve the dispute.

GR Enterprises filed a petition before HERC, which was dismissed.

Tribunal’s Analysis

The Tribunal observed that the project synchronization was completed on March 30, 2018.

APTEL highlighted that synchronization ensures grid connection, commissioning tests, and operational readiness validation. Commercial operation certifies the unit’s capability for sustained energy supply.

It also highlighted that the PPA does not explicitly define “commissioned,” leading to ambiguity. HPSEBL had equated the date of commissioning test completion to the commissioning date, differentiating it from synchronization.

The Tribunal concluded that upon the successful installation of a solar system and the completion of the inspection, the system is deemed ready to be connected to the grid for energy transfer, a process referred to as the commissioning of the system.

It held the appellant’s project commissioning date as March 30, 2018, and dismissed HERC’s order, approving a tariff of ₹5.31 (~$0.061)/kWh for GR Enterprises.

Last year, HERC overturned HERC’s decision to reject PPAs for 150 MW solar. 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 tariff for 2016-17.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.