APTEL Rules in Favor of Solar Developer, Sets Aside KERC Order Reducing COD Extension

The Appellate Tribunal for Electricity (APTEL) has allowed an appeal by Azure Sunrise Private Limited (ASPL) (subsidiary of Azure Power Global Limited) and has set aside an order passed by the Karnataka Electricity Regulatory Commission (KERC) reducing the approved timeline extension for the commercial operation date (COD) of a 50 MW solar project in the state.

Azure Sunrise had filed an appeal with the APTEL requesting it to declare that the KERC’s decision to reduce the COD extension period granted by Chamundeshwari Electricity Supply Corporation Limited (CESCOM) from 137 days to 25 days as arbitrary and unjustifiable.

This was deemed arbitrary as it had been more than 12 months since the extension was granted. It said that the solar project in Rangenahalli Village of Chitradurga District, Karnataka was near its completion, and this curtailment would result in severe financial loss.

Azure explained the project was delayed right at the start because CESCOM did not sign the power purchase agreement on time and delayed it by 137 days. This delay left them with only 228 days to carry out its obligations. It later explained that the KERC, in a separate response, attributed this delay solely to CESCOM.

While CESCOM agreed to extend the commercial operation date to make up for this delay of 137 days, the state Commission in a later order, after 12 months from the date of approval of the previous extension, reduced this extension to 25 days.

Additionally, Azure Sunrise said it also received a letter from CESCOM seeking to revise the terms of the PPA and the supplementary agreement to incorporate a revised tariff of ₹6.51 (~$0.08)/kWh, down from the previously agreed tariff of ₹6.89 (~$0.09)/kWh. It added that this was also unwarranted, and the Commission did not address this issue in its order while only reducing the extension period retrospectively.

APTEL, in its response, said that it understood that the central dispute between the two parties revolved around the state commission’s decision to revise and reduce the extension period retrospectively from 137 days to 25. It noted that there was no need for the appellant to be penalized for the fault of the respondent – CESCOM.

It also noted that the Commission only intervened in the time extension and not in the incorporation of the reduced tariff. It stated that the ruling by the Commission was not in line with the facts and circumstances presented before it and that neither the reduction in time extension nor the tariff reduction was justified.

The tribunal maintained that these decisions by the KERC in its order were not sustainable in the eyes of the law and ordered that it deserved to be set aside. In conclusion, it said that Azure’s appeal had its merits and that it would allow it. Stating this, the tribunal set aside the previous order passed by KERC in the matter.

Recently, the Appellate Tribunal for Electricity directed Andhra Pradesh’s distribution companies to pay a tariff of ₹2.72 (~$0.04)/kWh along with a trading margin of ₹0.07 (~$0.001)/kWh to Sprng Energy, Ayana Renewable Power, and SB Energy, the winners in the auction conducted by the National Thermal Corporation of India (NTPC) for 750 MW of solar projects in Ananthapuramu solar park

Earlier, the tribunal asked the Maharashtra Electricity Regulatory Commission to release the bank guarantee from Azure Power’s 150 MW solar project within two weeks.