Rajasthan Regulator Asks DISCOM to Ensure Timely Payments to Solar and Wind Generators

The Rajasthan Electricity Regulatory Commission (RERC) has issued an order directing the Jodhpur Vidyut Vitran Nigam Limited (JdVVNL) to verify and pay its overdue late payment surcharges (LPS) to a wind generator in the state and to ensure timely payments to solar and wind generators in the future.

Background

Malaxmi Wind Power, a wind power generator in the state, filed a petition with the Commission seeking to direct the JdVVNL to pay its dues and interest on the delayed payments. It said that despite offering a 50% waiver on the distribution company’s (DISCOM) LPS, payments were not released on time, and it revoked its offer to waive 50% off the LPS amount.

The petitioner said that the DISCOM has neither honored the timeline for payment nor paid its surcharge on delayed payments. It sought to recover the principal amount and the corresponding LPS as per the terms of the power purchase agreement (PPA) through the petition.


The wind generator sought for ₹22.1 million (~$299,761) in LPS along with the principal amount of ₹18.8 million (~$255,001) due, as of May 15, 2020.

In its response, the JdVVNL stated that it had paid its energy dues for the period between November 2019 and January 2020 to the tune of ₹7.7 million (~$104,442) and that the principal dues for February 2020 to July 2020 stood at ₹26.3 million (~$356,730).

Additionally, it said it released payments on March 30, 2017, for its dues of ₹36.4 million (~$493,725) from May 2016 to December 2016 and the LPS amount of ₹3.2 million (~$43,404) for the period between June 2015 and December 2016. The DISCOM added that the wind generator had claimed 100% interest for these periods.

It said that a letter issued by the RUVNL to the firm showed that the invoice for the third installment of the dues was received after a delay of eight years, barring the generator’s claims for dues under the provisions of the Limitation Act.

Upon analysis, the Commission said that there was a noticeable delay in making the principal payments as well as LPS dues to the wind generator. It cited previous petitions on similar issues where it held that in the case of delayed payments beyond the timelines mentioned in the PPA, the generator is entitled to LPS as per the Renewable Energy Tariff Regulations.

It further added that it was not appropriate for DISCOMs to compel generators to file petitions to claim dues each time, especially when it has given “clear directions” in past cases to pay interest against delayed payments as per the terms of the PPAs.

The Commission said that DISCOMs must “follow the said directions scrupulously in all similar cases so that multiplicity of litigations can be avoided.” It added that DISCOMs who have signed the agreement was bound by them, and if they failed to comply, their credibility would be affected.

In its final order, the Commission directed JdVVNL to verify each of the wind generator’s claims to ensure compliance with the terms of the PPA and to pay its LPS dues up to March 2020 before March 31, 2021.

The Commission further directed the DISCOM to ensure that future payments to solar and wind generators are made on a first-come, first-serve basis regardless of whether they have filed petitions or not.

Previously, the state regulator asked a textile company to pay the transmission charges, and the state load despatch center charges amounting to ~₹14 million (~$187,357) to Rajasthan Vidyut Prasaran Nigam.

In March this year, RERC came out with a suo-moto order regarding the directives issued by the state government for the banking of power, transmission and wheeling charges, power projects with storage systems, and rooftop solar projects.