The Appellate Tribunal for Electricity (APTEL) has partially set aside a Central Electricity Regulatory Commission (CERC) order, clarifying that NTPC cannot be held responsible for sealing meters under solar power purchase agreements.

It ruled that this responsibility lies with the generating companies or transmission/distribution licensees.

Background

Under the National Solar Mission, the State Specific Bundling Scheme was launched to promote grid-connected solar power projects. The appellant, NTPC, was appointed as the implementation agency for this program. It was tasked with facilitating the development of solar projects and acting as an intermediary trader.

As a part of this role, the appellant procured power from solar project developers and sold it to state distribution companies (DISCOMs). Among the projects under this program was a 50 MW solar project developed by Prayatna Developers (PDPL).

The contractual arrangements included key state utilities such as Uttar Pradesh Power Transmission Corporation (UPPTCL), Uttar Pradesh Power Corporation (UPPCL), and Dakshinanchal Vidyut Vitran Nigam (DVVNL). The appellant was to act as the intermediary between PDPL and the state DISCOMs.

The appellant signed a power sale agreement (PSA) with UPPCL on March 15, 2016. On May 18, 2016, a power purchase agreement (PPA) was signed between the appellant and PDPL to purchase 50 MW of solar power, split into five units of 10 MW each.

PDPL’s solar projects were ready for commissioning well before the scheduled commissioning date (SCoD), and the developer sent multiple communications to NTPC, requesting coordination for sealing the project’s 33 kV ABT meters, which was a prerequisite for commissioning.

However, the meters were finally sealed only on June 5, 2017, by DVVNL, and the project was commissioned after the original SCoD. This delay led to a dispute regarding the responsibility for the delay and the deduction of liquidated damages.

The parties approached CERC to solve the dispute.

CERC held that NTPC was a “buyer” under the CEA Metering Regulations, 2006. The central regulator stated that NTPC had an obligation under the PPA to ensure timely meter sealing and was, therefore, partly responsible for the delay in commissioning. It directed NTPC to refund the liquidated damages deducted from PDPL.

Challenging CERC’s order, the appellant approached APTEL, submitting that it functioned purely as an intermediary trader under the PSA and PPA.

It argued that as a trader under the Electricity Act, 2003, it had no legal, regulatory, or contractual obligations concerning infrastructure or metering and was not responsible for coordinating or ensuring the sealing of meters at project sites.

Tribunal’s Analysis

APTEL observed that trading involves the purchase of electricity for resale, and a trading licensee such as the appellant does not maintain any physical assets or systems to receive power. Therefore, the appellant cannot be deemed a buyer responsible for operational obligations such as meter sealing.

The Tribunal held that sealing meters involves the generator (PDPL) and the licensees (UPPTCL, UPPCL, DVVNL). It modified CERC’s order, removing the parts that fixed the meter sealing responsibility and the delay in project commissioning on the appellant.

Recently, APTEL set aside the Karnataka Electricity Regulatory Commission’s order rejecting a petition by Hero Future Energies requesting a power purchase agreement execution date extension.

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