The Maharashtra Electricity Regulatory Commission (MERC) has directed Century Rayon to comply with its cumulative renewable purchase obligation (RPO) by March 2020, by which the commission would complete its verification process for the RPO obligations for FY 2014-2015 and FY 2016-2017.

Recently, Mercom had reported on a MERC order, where fossil fuel-based co-generation projects in Maharashtra got time up until March 2020 to fulfill their RPO targets. The state commission has also directed Maharashtra Energy Development Agency (MEDA) to submit the relevant data from FY 2014-15 to  FY 2016-17 within 45 days of this order to enable the commission to take up the verification process. The MERC will deal with the period beyond FY 2016-17 in its order of verification for the period FY 2014-2015 to FY 2016-2017.

The case involved Century Rayon, a division of Century Textiles and Industries Limited, with an installed capacity of a 23 MW cogeneration captive power project (CPP). The petition was filed against the Maharashtra Energy Development Agency (MEDA) and Maharashtra State Electricity Distribution Company Limited (MSEDCL).

The commission has noted that Century Rayon filed a review petition against an earlier MERC order on the issue with the Appellate Tribunal of Electricity (APTEL) at New Delhi. Since the company has failed to obtain a stay on the proceedings, it is bound to comply with its RPO obligations.

Century Rayon had cited the Ministry of Power’s order of February 2019 and contended that it had no RPO obligations to meet and no RPO targets. The MoP order states that the RPO of captive power plants (CPP) may be pegged at RPO level applicable for the year in which CPP was commissioned.

In the case of Century Rayon, its co-generation CPP was commissioned sometime in 1967 and 1999. After the commissioning of the co-generation CPP, it has not increased or added to the installed capacity of 23 MW. In the year in which the said co-generation CPP was commissioned, there was no RPO liability. Therefore, it has no RPO compliance to be met.

The MERC, in its March 2016 order, had dismissed an earlier petition by Century Rayon for the amendment of its regulations to restore the earlier exemption from RPO compliance to the captive project based on fossil fuel.

Century Rayon had challenged this order and appealed at the APTEL where it is pending disposal.

Now, in its current petition, Century Rayon has appealed to the MERC that it should not be subjected to any coercive action if the shortfall in its RPO target given the pending final order of APTEL.

Alternatively, it has asked for time to comply with its RPO target and requested that it be extended until the disposal of petition by APTEL and three months thereafter. It has also appealed to the commission to be allowed to meet its RPO obligation in case it is held liable through Grasim Industries Limited and not Century Rayon.

In March 2019, the MERC ordered Maharashtra State Electricity Distribution Company Limited (MSEDCL) to comply with its solar RPO requirement for FY 2017-18 by March 2020 to fulfill the solar RPO requirement of the year.