Rajasthan DISCOM Asked to Pay Variable Charges for Older Biomass Projects

The Rajasthan Electricity Regulatory Commission (RERC), in a recent order, has ruled that the variable charges determined for the financial year (FY) 2019-20 will be applicable for biomass power projects commissioned during the earlier control periods of FY 2009-2015 and FY 2015-20 and also for FY 2020-21. The same will also apply to FY 2021-22 until there is a change in the fuel cost.

The Commission directed the Rajasthan Urja Vikas Nigam Limited (RUVNL) to make the payments for variable charges for FY 2020-21 to the earlier projects at the same rate approved in generic tariff order for FY 2019-20 and not to recover the variable charges already paid for the FY 2020-21. If the charges have already been recovered, the same may be refunded within one month from the date of this order.

Transtech Green Power, with a 12 MW biomass-based power project in the Jalore district of Rajasthan, filed a petition to review the order passed for determining generic tariff for FY 2020-21 and FY 2021-22.

Subsequently, Sathyam Green Power, Orient Green Power, and Sanjog Sugars & Eco-Power, with their biomass projects in Rajasthan, also filed petitions.


Background

The petitioners, in their submission, said that the generic tariff order dated March 23, 2021, issued by the Commission, was applicable only to new biomass projects to be commissioned in the state during FY 2020-21 and FY 2021-22. The petitioners added that the only factor that would change in fixing the variable cost of the old projects was the fuel cost as decided by the state-level committee.

The petitioners argued that the order mentioned that the generic tariff was for projects, which would be set up in future control periods, i.e., FY 2020-21 and FY 2021-22.

The petitioners added that as the fuel price was yet to be revised, the variable cost remained the same as fixed earlier for old projects.

Rajasthan Urja Vikas Nigam, in its reply, said that the order had not only determined the generic tariff but had also considered the revising of the variable charges of the biomass projects commissioned during FY 2009-2015 and FY 2015-2020.

Commission’s analysis

The Commission observed that the petitioners had submitted that only fuel cost was applicable to old and new power projects and not the variable charges.

The Commission further added that the fuel price would remain the same for new and old biomass power projects and not the variable charge.

The state regulator clarified that in the order dated January 15, 2020, it was made clear that the variable charges applicable for FY 2019-20 would also apply for biomass projects commissioned earlier (from FY 2009-15 to FY 2015-20).

As there has been no increase in fuel prices for FY 2020-21, the fuel price for FY 2020-21 would remain the same as for FY 2019-20. Hence, the variable charges determined for FY 2019-20 would also remain applicable for FY 2020-21, and the same would apply for FY 2021-22 until the Commission determines the fuel price.

The Commission directed Rajasthan Urja Vikas Nigam to pay for variable charges for FY 2020-21 to the old projects at the same rate approved in the generic tariff order dated January 15, 2020, for FY 2019-20 and not to recover the variable charges already paid for the FY 2020-21. If the charges were already recovered, the same should be refunded within one month from the date of the order, noted the Commission.

In 2019, RERC had issued guidelines to amend its regulations concerning the terms and conditions to determine the tariff for renewable sources (biomass, biogas, and biomass gasifier-based power projects) passed in 2015.

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Image credit: Σ64, CC BY 4.0