Regulator Directs Captive Solar Power Generator to Pay Transmission Charges

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The Odisha Electricity Regulatory Commission (OERC) recently directed the Odisha Power Transmission Corporation (OPTCL) and Bharat Electronics (BEL) to finalize the contracted capacity for the transmission of power utilizing the transmission network of OPTCL for long-term access.

It directed the parties to amend the transmission capacity access agreement (TCAA) between them.

The state regulator added that BEL could not be exempted from paying under injection charges to GRIDCO if the power injected from its captive power project was less than what was scheduled.

Further, the Commission rejected BEL’s request to grant a net metering mechanism for its 7.5 MW solar captive power project.

The Commission noted that as per the existing net metering and bi-directional metering and their connectivity order, the upper limit of the installed capacity of the solar power project should be 500 kW to avail the benefit of net metering.

In contrast, the installed capacity of BEL’s captive power project was 7.5 MW. Hence the net metering facility was not available for the captive power project.

OPTCL and BEL had filed two separate petitions with the state Commission. OPTCL had sought directions to BEL for the payment of open access charges. BEL had requested the Commission to adjudicate the dispute on the ‘arbitrary, illegal levy and collection’ of various open access charges under the Open Access Regulations 2020.

Background

BEL has a solar captive power project of 7.5 MW capacity at the Ordnance factory, Badmala, in the Bolangir district of Odisha. BEL entered into a  transmission capacity access agreement with OPTCL on August 7, 2018, per OERC Open Access Regulations 2005, to avail open access for its solar power to the ordnance factory for 25 years through the transmission network of OPTCL on payment of long-term open access charges.

OPTCL noted that the agreement nowhere provided that in the case the Open Access Regulations 2005 were repealed, BEL would be governed by the new regulations.

As per the Open Access Regulations 2020, OPTCL had to raise transmission bills to BEL based on its contracted capacity from November 2020.

In the absence of any declared contracted capacity by the captive power generator, OPTCL raised the transmission charge bills to BEL from November 2020, considering the contracted capacity as 7.35 MW for FY 2021, which was the maximum scheduled injection observed during FY 2020.

However, BEL protested this new billing method and suggested OPTCL to raise the transmission charges based on the scheduled generation or the actual wheeled units for the month and continue to pay the transmission charges based on the scheduled injection energy.

BEL submitted that the Commission enforced new Open Access Regulations 2020 by repealing the earlier Open Access Regulations 2005. Regulation 44 of the Open Access Regulations 2020 has a provision for non-applicability of the said regulations on existing open access customers to the intrastate transmission and distribution system where there is an existing agreement.

In light of the above, the levy of revised transmission charges by OPTCL is illegal and has no basis in law.

BEL added that owing to the lack of a banking facility, approximately 3 to 4 MU per annum was being injected by them into the state grid free of cost with undue enrichment of GRIDCO, which caused a loss of revenue.

GRIDCO initially agreed to buy the surplus solar power at ₹4.50 (~$0.055)/kWh for 25 years after the captive consumption by the ordnance factory but refused to purchase the excess solar power.

Further, the captive power generator stated that GRIDCO was levying Deviation Settlement Mechanism (DSM) charges on BEL, which was illegal since the Commission had not formulated any regulations for levying DSM charges.

Commission’s analysis

The Commission observed that the agreement states that the open access transaction between BEL and OPTCL should be governed per the provisions of Open Access Regulations, 2005.

However, per the Open Access Regulations 2020, the transmission charges should be payable based on the contracted capacity for long-term and medium-term open access customers.

Since the term ‘contracted capacity’ had neither been defined in the regulations nor the TCAA, OPTCL had claimed transmission charges based on the contracted capacity of 7.35 MW for FY 2021 and 5 MW for FY 2022 based on the maximum scheduled injection for the previous year and 1.814 MW for the FY 2023. BEL intimated OPTCL to consider a contracted capacity of 1.814 MW for FY 2023.

The Commission noted that it would be prudent to compute the transmission charges for open access transactions by BEL considering the 1.814 MW for FY 2021 and FY 2022. It directed both parties to finalize the contracted power transmission capacity utilizing the transmission network of OPTCL for long-term access and accordingly make amendments to their agreement.

OERC noted that even if it was found that GRIDCO adopted the rates of CERC’s DSM Regulations to impose penalty in case of lesser or higher injection into the grid, in the absence of separate DSM Regulations, the same could not be termed illegal.

BEL could convince GRIDCO to purchase surplus solar power from its captive power project through an agreement at a mutually agreed rate, the Commission said.

It further advised GRIDCO to explore the possibility of entering into PPA with BEL to purchase surplus power from its solar captive power project at a negotiated price, as it may require such power to meet its renewable purchase obligation in the future.

Earlier, OERC had issued the revised draft ‘Deviation, Settlement Mechanism, and Related Matters Regulations, 2022’ to ensure that users of the grid adhere to their schedule of drawal and injection of electricity for the security and stability of the grid.

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