The Haryana Electricity Regulatory Commission (HERC) has ruled that the losses suffered by a solar open access project developer due to a delay in the signing of a connectivity agreement was not the fault of Haryana Vidyut Prasaran Nigam (HVPN) and that the developer was not eligible for any compensation for it.

Background

Greenyana Solar Private Limited (a special purpose vehicle of Singapore-based Cleantech Solar Energy) had filed a petition with the HERC stating that HVPN did not grant a connectivity agreement for its 20 MW solar power project in the state despite the project being ready for power supply. It noted that the long-term open access (LTOA) was also not granted for the project.

It noted that while the in-principal connectivity approval was granted by the HVPN restricting the power purchase agreement (PPA) and LTOA capacity to the contracted demand of the open access (OA) consumer. When the company reached out for clarification, the HVPN said that open access consumers were not allowed to enter into an agreement for drawing energy over their contracted demand and directed them to seek clarification from DISCOMs.

Subsequently, the company obtained permission from the chief electrical inspector to energize the project upon completion. It also applied for the grant of long-term open access. However, the developer said that it has been incurring losses since April 14, 2020, because the DISCOMs did not execute the connectivity agreement. It sought compensation to the tune of ₹36.8 million (~$502,297) along with additional losses it would incur until it is allowed to supply electricity to its consumers.

It also sought directions from the respondents to sign the connection agreement, grant long-term open access, and accord it permission to supply power to its captive shareholders.

Contesting this, the respondents said that Greenyana was in default of certain compliances required under the regulations and guidelines issued, including the Haryana Renewable Energy Development Agency (HAREDA). They said that the HAREDA’s guidelines dated March 8, 2019, do not apply to the present case as they only apply to proposals submitted to HAREDA before February 12, 2019. They also noted that Greenyana only submitted its proposal on August 20, 2019.

The respondents also pointed out Cleantech Solar, a 51% shareholder of Greenyana, has raised its shareholding in the company to more than 70% since it submitted its application for LTOA. It explained that it was not permissible for the leading shareholder to change the shareholding within the first year of applying of connection. It also noted that captive consumers are required only to have a minimum of 26% stake, adding that there were no restrictions on the change in shareholding of captive consumers.

They also explained that DISCOMs are required to assess the status of the solar projects in advance which would otherwise result in the petitioner not getting the required connectivity. Regarding the restriction on drawing energy, they cited regulations from the open access regulations, 2012, limiting the energy that can be drawn to be within contracted amounts.

Commission’s Stance: 

Regarding the change in shareholding, the Commission stated that the respondents had the right to assess the 26% shareholding requirement for prospective captive users to ascertain compliance with the Solar Policy and Guidelines dated March 8, 2019.

The Commission also observed that the respondents’ contention about the change in the petitioner’s shareholding was not in line with the state solar policy and guidelines. It noted that there had been several changes in the shareholding of the petitioner’s project since the date the LTOA application was submitted and that it currently stood at 73.53%.

It explained that even if the petitioner’s contention was correct, the status of the leading shareholder’s stake even at the time of application was not 26%. It hence declared that Greenyana did not comply with the conditions prescribed by the state solar policy and HAREDA’s guidelines.

Commission’s Order: 

In its final order, the Commission said that the delay in signing the connectivity agreement was not the fault of the respondents and denied any compensation to Greenyana for losses it incurred as a result. It also noted that the project was still not complete and did not have any right to compensate for losses due to its conduct and its non-compliance with the conditions of the state solar policy and guidelines.

Regulatory changes in the solar sector, especially in the open access segment, have been tough to track for the developers which is why Mercom started the services for providing regular real-time updates for its subscribers.

Open access solar project developers in Haryana have been suffering from erratic regulatory changes in the state. It was a positive event when HERC recently approved a power purchase agreement with the Haryana Power Purchase Center and Amplus Sun Solutions Private Limited. The PPA was signed for 50 MW of solar power from its project in Bhiwani. Amplus developed the project as an open access/captive power project under the Haryana state solar policy.