The Appellate Tribunal for Electricity (APTEL) ruled that as per Uttar Pradesh Electricity Regulatory Commission (Captive and Renewable Energy Generating Plants) Regulations, 2019, banking of energy up to 100% requires an agreement between the renewable energy generator and the distribution licensee.

The tribunal held that neither the generator nor the Commission could insist on the distribution licensee banking of energy beyond what has been agreed to.

APTEL allowed a petition by the Uttar Pradesh Power Corporation (UPPCL) and set aside the order passed by UPERC regarding the banking of renewable energy.

Background

UPPCL had appealed against a Uttar Pradesh Electricity Regulatory Commission (UPERC) order that directed it to allow 100% banking of renewable energy generated by Inox Air Products.

UPPCL contended that, as per regulations, the banking quantum should be mutually agreed upon by the generator and distributor. It had proposed 25% banking across the board for all generators after the 2019 regulations came into force.

Inox Air Products had approached UPERC seeking 100% banking after UPPCL offered only 25% in response to its request for a banking agreement.

UPERC interpreted the regulations to mean that 100% banking should be allowed on a 15-minute time block basis. UPPCL cannot unilaterally curtail this right of renewable generators except on technical grounds.

Commission’s Analysis

APTEL emphasized that when the language of regulations is unambiguous, it must be given its literal meaning. UPERC’s interpretation of Regulation 31(a) (ii) is flawed, as it requires both parties to agree on the banking quantum.

APTEL noted that UPERC had disregarded its previous judgment in a similar case, which clarified the interpretation of the same regulation.

While UPERC has the power to remove difficulties in implementing regulations, APTEL clarified that this power is limited and cannot be used to substantially alter or amend regulations without following due process.

Any amendments to the regulator require stakeholder consultation under Section 181(3) of the Electricity Act and related rules. UPERC’s order to amend the regulation through a clarification was improper.

APTEL emphasized that while exercising adjudicatory functions under the Electricity Act, the Commission is bound by its regulations and cannot override them.

The tribunal held that UPERC’s order amounted to judicial indiscipline because it did not follow APTEL’s previous ruling.

Recently, the tribunal ruled that POWERGRID Southern Interconnector Transmission System is entitled to a 289-day extension to complete a transmission project, acknowledging that the delay was due to “force majeure” events.

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