Maharashtra Electricity Regulatory Commission (MERC) has approved the change in the effective power purchase agreement (PPA) date between ACME Sikar Solar (ASSPL) and the power procurer Maharashtra State Electricity Distribution Company Limited (MSEDCL) to May 6, 2022, from April 4.

The PPA pertains to a 300 MW solar project.

ACME Solar Holdings subsidiary ASSPL petitioned the Commission for the date change on grounds that the PPA was executed and delivered by MSEDCL to ASSPL on May 6, 2022.

The Commission also said that the delay would require MSEDCL to bear the incremental cost (highest variable cost – ₹2.42 ($0.029)/kWh) of power procurement for the period of 32 days prior to the actual commissioning of the project.

The amount cannot be passed on to the consumers.

Background

MSEDCL on May 6, 2021, floated a tender to procure power from solar PV projects through competitive bidding.

ACME Solar Holdings won the bid and was issued the letter of award for a capacity of 300 MW out of the total 500 MW capacity on December 14, 2021.

On January 10, 2022, ASSPL was incorporated for the development of the power project in Rajasthan.

Thereafter, the commission adopted the tariff of ₹2.42 ($0.029)/kWh for the project on March 11, 2022.

According to the tender provisions, ASSPL submitted a performance bank guarantee amounting to ₹240 million ($2.8 million) on March 22, 2022.

On April 4, 2022, ASSPL signed the PPA but MSEDCL shared the original copy of the PPA after a delay of over one month.

Commission’s Analysis 

Further, the Commission noted that the PPA’s effective date implies the date of its execution by both parties.

The PPA mentions all obligations that are to be fulfilled by ASSPL including attaining financial closure, scheduled commissioning date, and acquiring possession of 100% land for the project are to be computed from the date of execution of the PPA by both parties, the Commission said.

From the copy of the PPA, the Commission noted that the date of execution of the PPA by both parties was April 4, 2022.

Further, the Commission said MSEDCL delayed delivering the signed copy of the PPA which impacted ASSPL’s ability to commence the performance of its obligations.

It directed that the effective date of the PPA be considered as May 6, 2022, the date of handing it over by MSEDCL to ASSPL. The due dates for meeting various obligations under the PPA will stand revised accordingly.

Recently, the MERC approved the procurement of 234 MW of solar power by Brihanmumbai Electric Supply and Transport Undertaking from Solar Energy Corporation of India at a tariff of ₹2.71 (~$0.033)/kWh.

In the same month, the Central Electricity Regulatory Commission directed the Madhya Pradesh Power Management Company and Delhi Metro Rail Corporation to settle the balance GST claims along with the payment of the late payment surcharge.