The Appellate Tribunal for Electricity (APTEL) has rejected two interim applications filed by Bangalore Electricity Supply Company (BESCOM) seeking a stay of the Karnataka Electricity Regulatory Commission’s (KERC) orders condoning delays by renewable energy developers in commissioning solar projects.

The Tribunal held that BESCOM had failed to make out a case for staying the KERC orders, noting that the distribution company had delayed approaching the appropriate forum and had continued to pay the differential tariff to the solar project developers.

It also noted that the developers were entitled to receive the tariffs agreed under their respective purchase agreements (PPAs), as allowed by KERC.

Background

BESCOM approached APTEL seeking a stay on two KERC orders that had condoned delays in the commissioning of two 20 MW solar projects developed by Brics Renewable Energy and Aavanti Renewable Energy.

In 2021, KERC condoned a 119-day delay in the commissioning of Aavanti Renewable Energy’s project and a 114-day delay in Brics Renewable Energy’s project.

KERC also allowed Aavanti to receive a tariff of ₹4.97 (~$0.05)/kWh under its PPA, while it held Brics was entitled to ₹5.07 (~$0.05)/kWh.

APTEL noted that after the KERC orders were issued, BESCOM allowed them to remain operational and made payments equal to the differential tariffs.

BESCOM paid ₹96.05 million (~$1 million) to Aavanti toward the differential tariff, calculated against the PPA tariff and generic tariff, for the period from February 2018 to September 2022.

It also paid ₹11.41 million (~$119,230) to Brics for the period from January 2018 to October 2022.

BESCOM later filed writ petitions before the Karnataka High Court challenging the KERC orders.

In the Aavanti matter, the High Court stayed the KERC order and directed that the stay would remain effective for 10 weeks after the disposal of the writ petition. In the Brics matter, the High Court did not grant a stay at any stage.

BESCOM subsequently filed instant appeals before APTEL. The appeal about the Brics Renewable Energy was filed about three months after the High Court dismissed the writ petition as withdrawn, while the appeal about the Aavanti Renewable Energy was filed about a month after the High Court’s stay expired.

Tribunal’s Analysis

The Tribunal noted that BESCOM had delayed approaching it to seek a stay on the KERC orders condoning the delays in commissioning the solar projects.

APTEL observed that BESCOM had not challenged the KERC orders for about one year and seven months and had instead approached the Karnataka High Court, which was not the appropriate forum.

The Tribunal also noted that BESCOM had made payments toward the differential tariffs, indicating partial compliance with the KERC orders.

It further observed that even after the instant appeals were filed in July 2024, BESCOM did not show any urgency, and the interim applications remained pending for about two years.

The Tribunal held that BESCOM would not suffer any irretrievable loss if the KERC orders were not stayed.

It noted that the PPAs between BESCOM and the developers are valid for 25 years, until 2041. Therefore, if BESCOM succeeds on appeal at a later stage, it would have sufficient time to recover the differential tariff from the developers.

APTEL also reviewed the force majeure claims raised by the developers. These included the introduction of the goods and services tax, delays in signing supplementary PPAs, and delays in issuing evacuation approval. In Aavanti Renewable Energy’s case, there was an additional delay in granting land for bay allocation.

KERC had rejected the claims related to the introduction of GST and the delay in signing supplementary PPAs. However, it condoned delays in evacuation approval and, in Aavanti Renewable Energy’s case, the delay in granting land for bay allocation.

Stating that BESCOM had failed to justify a stay on the KERC orders, APTEL rejected the distribution company’s interim applications seeking relief.

Last year, APTEL ruled in favor of a solar power developer, extending the scheduled commercial operation dates of its two solar projects in Rajasthan, each with a capacity of 70 MW, and directing NTPC to refund ₹70.6 million (~$812,500) collected as liquidated damages.

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