The Appellate Tribunal for Electricity (APTEL) has overturned an order passed by the Jharkhand State Electricity Regulatory Commission (JSERC) granting an exemption from Renewable Purchase Obligations (RPO) to Tata Steel.

Background

JSERC had earlier exempted Tata Steel from its RPO from 2011 to 2014.

The appellant, Green Energy Association, an association of renewable energy developers, argued that the RPO exemption for Tata Steel does not meet the regulatory requirements.

It submitted that Regulation 9 of the RPO Regulations mandates each obligated entity to derive a year-specific percentage of its total annual energy consumption from captive power projects using renewable energy sources. Captive consumers failing to meet their RPO would be penalized.

The appellant argued that Regulation 10.2, which states that the continuation of RPO obligations is only allowed when the obligated entity faces challenges in complying with the RPO due to the unavailability of renewable energy and renewable energy certificates (RECs), was ignored.

It submitted that Tata Steel had no difficulty procuring RECs since these certificates had been on the market since June 2012.

The appellant also argued that promoting co-generation and generation from renewable energy sources cannot be equated with captive power projects/co-generation from conventional sources.

Tribunal’s Analysis

APTEL concluded that the only issue requiring detailed examination is whether JSERC was correct in exempting Tata Steel from its RPO obligations.

The exemption granted to the company was based on previous judgments, and the benefits extended to other entities such as Bokaro Steel Plant for the financial years 2011 to 2013.

The Tribunal held that the Commission’s reliance on the previous judgments was incorrect, as the context and regulatory framework have evolved because of the increased availability of RECs.

It observed that Section 86 (1) of the Electricity Act allows State Commissions to promote energy from renewable sources alone. Tariff Policy 2016 Clause 6.4 (1) states that co-generation from sources other than renewable sources will not be excluded from RPOs.

The Tribunal held that Tata Steel unfairly benefitted from non-compliance with its RPO.

APTEL overturned JSERC’s RPO relaxation order and directed it to determine Tata Steel’s non-compliance amount and ensure the company submits it to purchase RECs.

Recently, APTEL reaffirmed the rights of power generators Vaayu (India) Power Corporation and Vishwind Infrastructure to terminate their power purchase agreements with the Southern Power Distribution Company of Andhra Pradesh.

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