GERC Rejects Petition from Wind Developers for Refund of Delayed Payment Charge

The Gujarat Electricity Regulatory Commission (GERC) has passed an order rejecting the payment claims from wind power generators Sitac RE Private Limited and Jasdan Energy Private Limited. The respondents, in this case, were Gujarat Energy Transmission Corporation (GETCO) and Gujarat Urja Vikas Nigam Limited (GUVNL).

The petitioners had requested GERC to order GETCO a refund of nearly ₹10 million ($140,000) with 12 % interest from the date of deduction.

The amount, according to the petitioner, was deducted as alleged delayed payment charge from the bills raised by GETCO, which was against the Wind Power Policy, 2013, and an order passed by the commission in 2015.

The petitioners had also requested that the respondents be restrained from deducting any more costs as late payment charges. Further, they also wanted that the respondents be restrained from making any further recovery towards transmission charges from the invoices raised by GETCO in the future.



However, the commission cited that it had specifically provided that the project developer should commission at least 10% of the allotted capacity of wind projects within one month of charging of transmission or evacuation line. In case of failure to achieve the commissioning, it would attract the payment of transmission charges corresponding to 10% of the allotted capacity until the required capacity is commissioned.

The GERC provided comfort to the wind project developers to the extent that at least 10% of the allotted capacity is to be commissioned within one month from the charging of evacuation line before the developer becomes liable to pay the transmission charges for 10% of allotted capacity till such capacity is commissioned.

In case of a delay in the payment of such charges, the commission stated that “such beneficiary is liable to pay the delayed payment charges as decided by the commission in the GERC (MYT) Regulations, 2011 and 2016 (Regulation 44 of 2011 & Regulation 43 of 2016)”.

Consequently, the GERC has rejected the claims of the developer and disposed of the interlocutory application.

Earlier this year, the state commission had asked bidders of a wind auction to declare pre-bid tie-up with at least three equipment manufacturers or engineering, procurement, and construction (EPC) contractors for the execution of the project. The commission feels that a tie-up with only one manufacturer may lead to a situation where the bidder may get affected due to the failure of the manufacturer to provide the wind turbine on time. This would also limit the flexibility of the bidder who will not be able to commission the project in time. Therefore, a bidder should have an option to fall back on more than one manufacturer according to the commission.

Recently, Mercom analyzed if the government’s move to issue mandatory letters of credit going to resolve the payment worries in the solar, wind sectors. Read more about it here