Rajasthan Regulator to Issue Notices to Companies for Non-Compliance of RPO

In one of the toughest moves to enforce the renewable purchase obligation (RPO) order, the Rajasthan Electricity Regulatory Commission (RERC) has said that nine companies will be issued notices for the non-compliance of RPO order.

After reviewing a petition by the Rajasthan Renewable Energy Corporation Limited (RRECL), the commission has directed the issue of notices to the managing directors of all the respondent companies (excluding Binani Cement Limited (BCL) and Uttam Strips Limited) to show cause for the non-compliance of the commission’s order.

The RRECL has been asked to provide the list of names of the managing directors and directors of the respondent companies so that notices can be served to them.

Background:



In March 2017, Rajasthan Renewable Energy Corporation Limited (RRECL) filed a petition for the non-compliance of RERC’s order on renewable purchase obligations (RPO).  RRECL is the nodal agency appointed by the RERC for ensuring RPO compliance.

The petition was filed against Binani Cement Limited, Mangalam Cement Ltd, J.K. Tyres & Industries Ltd, Ruchi Soya Industries Ltd, Suzuki Spinners (Unit-II), Suzuki Spinners, Jodhpur Alloys Pvt. Ltd, Shristi Alloys Pvt. Limited, Suzuki Suitings, Uttam Strips Pvt Ltd, and Yantra Steels India Pvt. Ltd.

The case was heard in January 2019, and during the proceedings, it submitted the names of the 11 respondents who had made the compliance and requested the commission to drop the action against them.

On January 4, 2019, the commission allowed the request of the petitioner and dropped the proceeding against the proposed respondents.

In the meantime, two respondents—Binani Cement and Uttam Strips—represented their cases before the commission, stating that they were unable to repay their debts. The two companies said that their board of directors had been suspended as per the provisions of the Insolvency and Bankruptcy Code.

Meanwhile, Ultratech Cement Limited and Jyoti Strips Private Limited became the resolution applicants approved by the National Company Law Tribunal (NCLT) for Binani Cement Limited and Uttam Strips Limited.

Given this, the RERC believes that, now, Binani Cement and Uttam Strips cannot be held responsible for compliance with the commission’s order. However, all the other respondents did not represent their case, which will result in an action initiated against them.

Stating this, the commission has ordered that notices must be issued against the rest of the companies for their non-compliance.

Only last week, Delhi Electricity Regulatory Commission (DERC) imposed penalties of ₹17.2 million (~$240,000) on Tata Power Delhi Distribution Limited (TPDDL) and ₹28.8 million (~$410,000) each on BSES Yamuna Power Ltd. (BYPL) and BSES Rajdhani Power Ltd. (BRPL), for defaulting on renewable energy purchase obligations for three financial years.

In March 2019, Mercom had reported that the Rajasthan Electricity Regulatory Commission (RERC) issued new amendments to its regulations on renewable energy certificate and renewable purchase obligation compliance framework that was initially passed in 2010.