Captive Generator's Plea to Carry Forward Banked Solar Energy Rejected

Listen to this article

The Haryana Electricity Regulatory Commission (HERC) recently asked the Haryana distribution companies (DISCOMs) to calculate the percentage of self-consumption of a captive power generator after excluding generation and consumption figures from April to July 2020, when Covid-19 gripped India.

The Commission added that if the self-consumption worked out to 51% or above, the demand notice for ₹18.09 million (~$227,225) made by the DISCOMs should be set aside. Any amount deposited by the captive generator should be refunded in the next bill.

It also rejected the petitioner’s request to carry forward banked energy for FY 2019-20 and FY 2020-21 to FY 2021-22.

Orbit Resorts had filed a petition requesting the Commission to set aside the letter by the DISCOMs in which the captive status was denied, and an amount of ₹18.09 million (~$227,225) was raised. It had also requested the Commission to restore the captive status for FY 2020-21 and allow the carry forward of the excess units for FY 2019-20 and FY 2020-21 to FY 2021-22 on the grounds of a ‘force majeure’ event caused by the Covid-19 pandemic.


Background 

Orbit Resorts is engaged in the hospitality business and operates two hotels, ‘ The Oberoi Gurgaon’ and ‘The Trident Gurgaon’ in Gurugram, Haryana.

The petitioner has also set up a 7.5 MW captive solar power project at Sirsa. The petitioner executed the connectivity agreement on March 12, 2018, and was granted the intrastate long-term open access on March 29, 2019, and the banking agreement was executed on August 19, 2019.

Orbit Resorts submitted that its two hotels relying on heavy traffic of foreign guests came to a standstill for three months, even after the lifting of the pandemic-induced lockdown. Due to the pandemic, electricity demand stood reduced, and from April 2020 to March 2021, it could make captive use of only 32.55% of the total units produced.

The DISCOMs claimed back all the applicable charges, which the petitioner was exempted due to failure to establish the captive status. Consequently, a demand of ₹18.09 million (~$227,225) was raised to be reverse-charged for FY 2020-21.

The petitioner approached the Additional Chief Secretary-Power, Government of Haryana, highlighting the loss of its captive status and the illegal demand raised for ₹18.09 million by the DISCOMs. Orbit Resorts clarified that the hospitality industry was ordered to be shut for three months and then was allowed to operate with restrictions.

Commission’s analysis

The Commission observed that the petitioner had sought restoration of captive status and quashing the demand raised by the respondent on account of payment of applicable charges from which it was exempted being a captive power project. It also sought the rollover of banked power from FY 2019-20 and FY 2020-21 to FY 2021-22.

The Commission noted that the lockdown was followed by a staggered unlock period. Hotels gradually opened up with restrictions. International flights did not operate.

The Commission added that the power banked would not be carried over from one financial year to another as the credit for the banked power would lapse at the close of the relevant financial year. It rejected the petitioner’s claims to roll over the banked power.

The state regulator noted that if the 51% threshold criterion was met, the DISCOMs should withdraw the charges levied due to non-fulfillment of the captive status for the relevant period. It must be noted that the dispensation of 51% self-consumption, to be computed on an annual basis, had been provided to enable the captive consumer flexibility to even out its daily and monthly consumption to retain captive status.

It added that the percentage of self-consumption should be computed after excluding generation and consumption figures from April to July 2020. If self-consumption worked out to 51% or above, the demand notice of ₹18.09 million (~$227,225) should be set aside.

In May last year, HERC rejected a captive power generator’s request to adjust the banked energy for one year. It said the captive power generator should have provided the DISCOMs the day-ahead schedule according to the ‘Open Access Regulations, 2012.’

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