Kerala State Electricity Regulatory Commission (KSERC) has set ₹2.97(~$0.036)/kWh and ₹2.69(~$0.033)/kWh as the average power purchase cost (APPC) for financial years (FY) 2019-20 and 2022-2023.

The Kerala State Electricity Board (KSEB) had filed a petition with the Commission to determine the APPC for FY20 and FY23.

Background

According to KSEB, the Commission did not endorse the APPC for FY19 to FY22 in the multi-year tariff order that was issued in 2019. Therefore, KSEB computed the APPC for FY20 at ₹2.97 (~$0.036)/kWh by considering the cost of power purchase and self-generation approved in KSERC’s 2019 truing up order.

KSEB stated that the Commission had not yet approved the APPC for FY23, which will be utilized to adjust the excess surplus energy banked by prosumers. For solar prosumers, this will be up to September 30, 2022, and for other renewable prosumers, up to March 31, 2022. Hence, KSEB estimated the APPC for FY23 based on its audited accounts for FY22, which comes out to ₹2.69(~$0.033)/kWh.

KSEB clarified that the total net injection of 41 MU mentioned in the audited accounts and truing up petition in 2019 at ₹3.22 (~$0.039)/kWh was the excess energy injected by the prosumers from April 1, 2020, to March 31, 2021.

However, the actual solar energy settled from October 1, 2019, to September 30, 2020, was only 12.86 MU.

The discrepancy occurred due to the difference in settlement periods between the original KSERC (Renewable Energy & Net Metering) Regulations, 2020, and the its amended regulation issued in 2022.

As per the KSERC Regulations, 2022, the settlement period is from April 1 to March 31 of the next calendar year.

However, for solar sources under the parent Regulation, KSERC Regulations, 2020, the settlement period is from October 01 to September 30 of the next year.

KSEB requested a clarification on the settlement period to avoid ambiguity.

KSEB pointed out that the Ministry of Power notified a renewable purchase obligation (RPO) and energy storage obligation trajectory for FY23 to FY30, which dispensed with a separate RPO for solar. Instead, there are only wind RPO, HPO, and other RPO.

KSEB said that since the state has a significant hydropower potential, other RPO can be met without adding solar. Therefore, it requested the modification of the RPO targets notified by KSERC (Renewable Energy & Net Metering) (First Amendment) Regulations, 2022, in line with the MoP notification.

Commission’s Analysis

The Commission approved the APPC at ₹2.97(~$0.036)/kWh for settling the surplus banked energy as on the settlement date for FY20. If KSEB has settled any amount at provisional rates for FY20, it should be revised, and the excess amount must be credited to prosumers within a month.

The Commission approved the APPC at ₹2.69 (~$0.033)/kWh for FY23 to settle the surplus banked energy on September 30, 2022, and March 31, 2023.

It allowed the actual amount paid to the prosumers as part of the settlement of the banked energy for FY20 and FY21. The excess or shortfall in settlement amount as per this order, over and above the amount already settled, will be allowed along with the orders on the truing up of accounts for FY22.

The Commission stated that the settlement period of all the prosumers and captive consumers in the state, irrespective of their installation date, will be from April 1 to March 31 of the next year.

The state regulator ordered KSEB to submit the details of the RPO compliance for FY23 as per the prevailing regulations, and the action plan for meeting the RPO targets up to FY30 as specified in MoP’s order.

The Commission said it might take  steps to amend KSERC Regulations 2020 after completing the procedures as per the Electricity Act, including stakeholder consultation and public hearings.

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