The Rajasthan Electricity Regulatory Commission (RERC) has declined the plea made by the Railway Energy Management Company Limited (REMCL) seeking credit of energy generated from a captive wind power project.
Case in a Capsule:
REMCL had contracted INOX Renewable Limited to develop a wind power project having a capacity of 26 MW on October 16, 2015, in Jaisalmer district for the captive use of West Central Railway (WCR).
Power purchase agreements (PPAs) were signed between REMCL and West Central Railways, per which energy generated by the wind projects was to be supplied to WCR for its captive use in Rajasthan to three Traction Sub Stations (TSSs) namely: Bharatpur, Hindaun City, and Ramganj Mandi. The wind generated from the project was to partly meet the requirements of these stations.
A wheeling and banking agreement (WBA) was signed between REMCL, INOX Renewable Limited, and JVVNL, for a period of 25 years. A wheeling agreement was also signed between REMCL and RVPNL for the transmission of 26 MW power to the three traction sub stations on RVPNL’s system.
Railways is a deemed licensee under the third provision of Section 14 of Electricity Act, 2003. Later, REMCL on behalf of Northern Railway and WCR, invited bids for the procurement of 220 MW of power and Jindal India Thermal Power Limited (JITPL) was awarded the capacity.
After getting the status of deemed licensee, REMCL requested JVVNL to consider the deemed termination of the existing wheeling and banking agreement. This was requested considering that the West Central Railways was no longer a consumer of JVVNL for the three traction sub stations.
Consequently, JVVNL effected the disconnection of the three sub stations and terminated the agreement in January 2017.
However, JVVNL refused to account for the energy generated from the wind power project and that was consumed at other traction sub stations. Later, REMCL requested RERC to direct JVVNL to account for the energy generated from the captive wind power project.
After examining the submissions made by parties, the RERC opined, “After the termination of WBA and disconnection as H.T. consumer, no contract/agreement exists between REMCCL and JVVNL. After the termination of agreement, there is no privity of contract between the parties during the disputed period and therefore, JVVNL is not under any obligation for payment of electricity injected into the system.
The commission was of the view that REMCL had no reason to claim payment for the electricity supplied to the grid after the termination of their agreement.
In July 2018, REMCL tendered 54 MW of wind projects to be developed in the state Maharashtra.
Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.