More Project Commissioning Delay Cases in Telangana Ruled in Favor of Project Developers

It was a good start of the week for majority of the developers of grid-connected solar projects in Telangana, who had filed petitions, seeking relief due to the delay in the Scheduled Commissioning Date (SCOD).  In three out of the four cases, the Telangana State Electricity Regulatory Commission (TSERC) has provided respite to the solar power developers, accepting the reasons for delay. The commission has extended a partial relief to the developer in the fourth case.

The details of four cases are as below.

Case I

The Telangana State Southern power Distribution Company Limited (TSSPDCL) had tendered 2,000 MW of solar projects through its e-procurement platform. In the process, Amun Solarfarm Limited emerged as the successful bidder through open competitive bidding process to setup the solar PV project of 15 MW in Kamareddy district, Telangana. The tariff was fixed at ₹5.5459 ($0.07564)/kWh, as per the Power Purchase Agreement (PPA) terms signed on February 29, 2016, SCOD for the project was set as February 28, 2017, while the project got synchronized to the grid on June 12, 2017.



Post that, Amun Solarfarm Limited filed a petition to TSERC seeking extension of SCOD by 104 days owing to hurdles like delay in land acquisition of the project, excessive rainfall and demonetization.

The commission, in this case, approved the extension of SCOD up to October 31, 2017. However, since the project was completed and was synchronized to the grid on June 12, 2017, the commission allowed the petition on the same tariff as approved by the commission and directed the respondent, Northern Power Distribution Company of Telangana Limited to file a copy of the amended PPA with the revised date of commissioning of the project without extra cost.

Case II

In another 2,000 MW tender floated by TSSPDCL, Avighna Solarfarms Limited had emerged as a successful bidder for the commissioning of a 15 MW capacity project in Nalgonda district, Telangana. A PPA regarding the same was signed on February 29, 2016. As per the terms of the PPA, the petitioner, Avighna Solarfarm Limited, had to complete the project within 12 months from the date of signing PPA, which is, February 28, 2017.

The petitioner, Avighna Solarfarms Limited, had sought an extension of SCOD from February 28, 2017 to August 28, 2017, a total of 122 days. Avighna cited delay in acquisition of land, excessive rainfall, demonetization, and other reasons for the delay and synchronized the project to the grid in a phased manner on April 30, 2017 (8 MW) and on June 30, 2017 (7 MW).

It should be noted that the government of Telangana has issued extension relating to SCOD up to October 31, 2017 to the solar power projects in the state, who have participated in the bidding in 2015. However, the commission did not take Telangana government’s extension into consideration, instead took a view that cases should be examined individually to determine the extension based on merits.

TSERC, thus provided relief to the developer and allowed the petition on the same tariff as approved by the commission.

Case III

TSERC provided relief to yet another developer, who was the successful bidder for a 2,000 MW solar project tendered by TSSPDCL to setup a 10 MW capacity near Achampet, Mahaboobnagar reorganised Nagarkurnool district, Telangana for sale to DISCOM. The PPA for the same was executed on February 29, 2016. As per the PPA, the petitioner was to make the project operational within 12 months from the date of PPA (February 28, 2017). However, the project got synchronized to the grid on August 31, 2017. The petitioner claimed delay in acquisition of land, demonetization and other reasons in execution of the project. Taking advantage of the delay, the respondent invoked one performance bank guarantee which was not refunded to the petitioner.

TSERC accepted the reasons given by the developer in the delay of SCOD by 124 days and responded that the performance bank guarantees will be refunded to the petitioner. The petition was allowed on the same tariff as approved by the commission.

Case IV

In this case, the commission, looking into a petition for extension of SCOD by 269 days, provided only partial relief to the developer. TSERC observed that the rationale of the petitioner, Gummmadidala Solar Private Ltd, is liable for an extension only up to October 31, 2017, however, the project was synchronized only on November 23, 2017. The commission said that for the delay of 23 days, the DISCOM is entitled to take steps as per the terms of PPA.

The 2,000 MW solar power tender was issued by TSSPDCL through e-procurement platform and Gummmadidala Solar Private Ltd was the successful bidder. The developer was to commission 15 MW capacity near Gummadidala, Medak District, Telangana for sale to DISCOM by February 28, 2017. The PPA was signed on February 29, 2016. The developer later filed a petition seeking extension of SCOD by 269 days, citing problems in land acquisition, heavy rainfall and demonetization as the reasons for delay. The project of the petitioner was synchronized to the grid on November 23, 2017 with a delay of 268 days.

In view of the aforementioned reasons, the delay as pleaded by the petitioner is liable to be condoned only up to October 31, 2017 for the reasons stated supra. However, the project was complete in all respects and it was synchronized with the grid of the respondent on November 23, 2017 with a delay of 23 days. There is a further delay of 23 days in achieving SCOD by the petitioner in the present case. As per Article 10.5 of PPA, the DISCOM is entitled to encash such performance bank guarantees if there is delay in achieving SCOD,” observed the commission.

Recently, TSERC provided relief to the developers of four grid-connected solar projects in the state, totaling 55 MW. In all the four cases, TSERC accepted the reasons given by the project developers for the delay in the scheduled commissioning dates, scoring a win for developers.

The TSERC orders in these cases are in contrast to a recent order passed by the Karnataka Electricity Regulatory Commission (KERC), which dismissed the petition filed by Marakka Solar Power Project LL.P.  KERC responded that force majeure events. did not entitle any relief to the petitioner.

 

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