Electricity Regulator Rules in Favor of Open Access Solar Project Developer

The Joint Electricity Regulatory Commission (JERC) for the state of Goa and union territories has ruled in favor of a solar engineering, procurement, and construction (EPC) company seeking connectivity for a solar power project and exemptions for it under the Commission’s open access (OA) regulations.

Background

Waaree PV Technologies Limited had signed a power purchase agreement (PPA) with Chemfab Alkalies Limited for the supply of solar power from 10 MW of projects in Karikal, Puducherry for 25 years. The PPA was signed on January 5, 2019.

Waaree had signed the PPA after a written confirmation from the Puducherry Electricity Department (PED) that open access charges and losses for wheeling of power did not apply to the project. PED further clarified that the charges will not be levied if the power generated from the projects is fed into the grid for meeting its renewable purchase obligation (RPO) targets.


Waaree is a wholly-owned subsidiary of Sangam Renewables. However, the PED had incorrectly interpreted that Sangam Renewables was a completely separate entity, and as a result, had denied the exemption of the charges.

Further, Waaree went on to explain that it had started work on the project in early 2018 under the provisions of the JERC Regulations, 2018 and that it had achieved all milestones before the JERC Regulations, 2019, was passed.

Waaree spent about ₹200 million (~$2.7 million) towards the project construction. It has completed most of the preparatory work, including the execution of the PPA, acquisition of land, obtaining financial assistance from Indian Renewable Energy Development Agency Limited (IREDA), and grid connectivity.

Waaree sought for the Commission to relax the provisions of the JERC Regulations, 2019, and to allow for the exemption of open access charges for the duration of the PPA.

It explained that in the absence of new regulations, it proceeded based on the earlier regulations as it was left with no other choice. It was, therefore, eligible for relief under the principle of “Legitimate Expectation.”

The electricity department also claimed that Waaree’s petition was not maintainable since the relief it sought did not pertain to the JERC (Solar PV Grid Interactive & Net Metering Regulations), 2019. It stated that Waaree has mixed up the provisions of these regulations with the JERC (Connectivity and Open Access in Intra State Transmission and Distribution) Regulations, 2017.

Commission’s Observations

After an analysis of the submissions by both parties, the Commission said that the petitioner’s claims were covered under the JERC (Solar PV Grid Interactive & Net Metering) Regulations, 2019 and that the petition was indeed maintainable. It added that it was not convinced by the arguments put forth by the Puducherry Electricity Department regarding the maintainability of the case and rejected all its contentions.

It took note of Waaree’s concerns that the entire project and its large investments towards it would go to waste if open access is denied.

“It is not out of place to mention here that due to the absence of new regulations, the petitioner proceeded on the basis of earlier JERC Regulations 2015. It is submitted that apart from proceeding on the basis of exemption granted under the JERC Regulations 2015, there was no other option for the petitioner as the JERC Regulations 2019 were issued much later,” the Commission said in its analysis.

It noted that the Waaree had made a case on merits after achieving significant milestones during the extended period during which the JERC’s regulations from 2015 were in effect. Subsequently, it declared that Waaree’s petition was covered under the principle of “Legitimate Expectations.”

Commission’s Order

In its final order, the Commission ruled in favor of Waaree and rejected the submissions of the Puducherry Electricity Department. It directed the department to grant connectivity to the solar project along with all the open access exemptions under the JERC Regulations, 2015. It further directed the electricity department to execute a long-term open access agreement with Waaree for 25 years.

Additionally, the Commission directed Waaree to complete its project to achieve commercial operation by March 31, 2021, and to submit a report of completion within two weeks of this date. It also directed the electricity department to monitor the progress of the project and grant long-term open access and grid connectivity subject to the project meeting the timelines specified by the Commission.

Open access policies are highly inconsistent and vary across the country. Mercom has written about the open access market in India and how it offers parallel opportunities for stakeholders, including large corporates, solar project developers, investors, and power distribution companies, to participate in India’s solar dream.