Punjab State Electricity Regulatory Commission (PSERC) has approved Punjab State Power Corporation’s (PSPCL) proposal to procure power from a 50 MW wind project with a power sale agreement (PSA) with Solar Energy Corporation of India (SECI). Adani Green Energy developed the project.

The commissioning of the 50 MW project was delayed by ten months, and the Central Electricity Regulatory Authority (CERC) is to provide clarity on the tariff reduction.

Background

PSPCL had filed the instant petition seeking approval for procuring 30 MW solar power at a tariff of ₹5.45 (~$0.072)/kWh with a trading margin of ₹0.05 (~$0.00066)/kWh, 150 MW wind power at a tariff of ₹2.65 (~$0.035)/kWh and 200 MW of wind power at a tariff of ₹2.44 (~$0.032)/kWh plus a trading margin of ₹0.07 (~$0.00092)/kWh.

However, the commissioning of the 50 MW wind project by Adani Green Energy of the 150 MW was delayed for ten months due to force majeure events. Because of the nature of the delay, an extension was granted until January 03, 2020.

PSPCL claimed a provision in the power purchase agreement (PPA) that allowed the reduction of tariffs in case of a delay in the project commissioning. It argued that since the PPA and PSA are back-to-back, the provisions of the PPA apply mutatis mutandis to the PSA. Thus, PSPCL is entitled to a reduced tariff.

The Commission had approved PSPCL’s proposal to procure 30 MW of solar power, 100 MW wind power, and 200 MW wind power. In the case of the 50 MW of wind project, the Commission stated that PSPCL could avail of a reduction in tariff as per the PSA and PPA terms.

However, since power was already being injected from this project onto the grid, SECI requested power procurement approval and for PSPCL to consider the issue of tariff reduction later. In response, PSPCL sought time to seek instructions.

In the hearing held on March 02, 2022, PSPCL submitted that it is entitled to a reduced tariff and had filed a petition before the Central Electricity Regulatory Commission (CERC).

PSPCL was making payments per the PPA, awaiting the final decision on the reduction in tariff by CERC.

Commission Analysis

According to the PPA provisions, the Commission noted that the developer is entitled to receive the tariff of ₹2.65 (~$0.035)/kWh. However, in case the commissioning of the project is delayed over six months, the tariff discovered in the e-reverse auction could be reduced at the rate of ₹0.50 (~$0.0066) /kWh per day for the delay in the remaining capacity not commissioned.

The Commission provided power procurement approval for the project but noted that the tariff could be reduced based on the order of CERC.

PSERC recently adopted tariffs to procure 250 MW of solar power. The Commission approved the procurement of 100 MW of solar power from ReNew Dinkar Jyoti at ₹2.33 (~$0.03)/kWh and 150 MW of solar power from Adani Renewable Energy Holding Fifteen at ₹2.34 (~$0.031)/kWh. PSPCL had filed a petition seeking the adoption of a tariff for 250 MW of solar power selected through a competitive bidding process and the procurement of power.

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