Rajasthan Regulator Directs DISCOM to Pay Late Payment Surcharge to a Wind Developer

The Rajasthan Electricity Regulatory Commission (RERC) has directed the Jodhpur Vidyut Vitran Nigam Ltd (JVVNL) to pay the late payment surcharge (LPS) to a wind energy generator.

However, the Commission rejected the petitioner’s claim for interest on the LPS amounts. It said that there was no provision in the power purchase agreement for adding interest on interest.

Background

The petitioner, Maharaja Shree Umaid Mills, had executed a PPA with JVVNL to supply energy from its 15.35 MW wind power project in Jaisalmer and Jodhpur.


The petitioner stated that the Rajasthan Urja Vikas Nigam (the erstwhile Rajasthan Distribution Companies (DISCOM) Power Procurement Centre (RDPPC) was making payments from October 2014 to April 2015 as per the invoices. However, from May 2015, RDPPC refused to accept the invoices as per the PPA tariff and forced the petitioner to revise the invoices at lower rates.

Aggrieved by the refusal of RDPPC, the petitioner sought a clarification on the tariff from the Commission. The Commission had directed RDPPC to pay the undisputed tariff, pending disposal of the petition. Accordingly, RDPPC started making monthly bills payments from April 2015 at reduced tariff, but with an average delay of around 100-200 days.

Despite the Commission’s final order, RDPPC did not comply and continued to release only reduced tariffs on the ground that it would be moving an appeal before the Appellate Tribunal for Electricity (APTEL) against the Commission’s order. However, APTEL dismissed the appeal filed by Rajasthan Urja Vikas Nigam and upheld the Commission’s order.

Despite APTEL’s judgment, the LPS amounts had been withheld for the last four years.

Rajasthan Urja Vikas Nigam argued that LPS was not payable since there was no order from either RERC or APTEL to pay LPS. Rajasthan Urja Vikas Nigam also repeatedly contended that the petitioner did not claim LPS.

Commission Analysis

The Commission observed no reason to withhold the LPS and directed Jodhpur Vidyut Vitran Nigam (Jodhpur DISCOM) to pay the LPS to the petitioner on the difference in amounts paid from July 2016.

The Commission also noted that Jodhpur DISCOM needlessly delayed the payments even after its order on June 20, 2016. It directed the DISCOM to file the compliance report within a month.

However, the Commission rejected the petitioner’s prayer for availing interest on the LPS. There was no such provision in the PPA or the law for adding interest on interest.

In October 2021, RERC had rejected the petition of a wind energy generator to continue the PPA of a project that had been canceled. The generator had requested a switchover of the project from PPA to captive mode.

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